A Government Accounts for Inventory on the Consumption Basis

Instructions: Answer the following two questions in 1-2 page document.

1. Why do some accountants believe that it should offset the year-end inventory balance with a fund balancenon-spendable when no comparable fund balance is required for cash, taxes receivable, or most other assets?

2. How should governments report their capital projects and debt service activities in their government-wide statements?

Requirements:

Submit your responses to the following questions in a 1-2 page document in MS Word. Label each question clearly. Please include computations in a table.

For written answers, please make sure your responses are grammatically correct and free from spelling errors.