Question
You are the auditor of Winter Valley. You have noticed that the town is recording all of their transactions in the General Fund. The town
You are the auditor of Winter Valley. You have noticed that the town is recording all of their transactions in the General Fund. The town has not established additional funds although they have the following transactions. They are constructing a new city hall They have a town operated skating rink for which they charge an entrance fee. They have $2,000,000 in an employee pension plan. They are paying interest and principal on Winter Haven Municipal Bond They have unclaimed funds of $1,000,000 They have established a $3,000,000 endowment fund to maintain the Library into perpetuity They have a centralized payroll department that provides payroll services to all departments of Winter Valley They collect sales taxes on behalf of Stars Hollow They invest idle funds on behalf of Stars Hollow They have passed a gasoline surcharge to fund the planting of Flower Beds on the sides of Central Highway. Required Prepare a one to two page memo explaining what additional funds should be established in order to assure proper accounting control for Winter Valley. In your memo discuss the importance of funds in Governmental accounting. Additionally, describe the three categories of governmental funds.
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