(Use of funds in governmental accounting) On Election Day, the citizens of a small village voted affirmatively on the following proposition: “To authorize the sale of $ 3,000,000 in bonds for the purpose of constructing a new firehouse.” The village manager then told the finance commissioner: “Put the entire proceeds from the bond sale into the General Fund. That way, we can hire more firefighters with any proceeds from the bond sale that were not used to build the firehouse.” Comment on the village manager’s instructions to the finance commissioner.
Answer to relevant QuestionsDefine fund as the term is used in governmental accounting. How has governmental budgeting influenced the measurement focus and basis of accounting used in the governmental funds category?A large city has been financing all of its services through property taxes and sales taxes. As the cost of services has been increasing, the city has found it necessary to raise its tax rates. A special com-mission appointed ...What is a budget? What purposes does it serve? A city is preparing its cash forecast for the month of July. Based on the following information, com-pute the estimated cash disbursements for July. Items vouchered in July................... $ 650,000 Estimated payments in ...
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