This series should be helpful for all sizes of government entities. Our reason for writing this series is to help government accountants and administrators understand the accounting environment and requirements for local governmental units. We are all required to pay income taxes, property taxes, sales taxes, etc., whether we want to or not. As a result governments have, and should have, a very high degree of accountability to its citizens for the proper use of these financial resources. Governments have not always been models of accountability to its citizens for the use of these involuntarily extracted monies.
Fund means a separate accounting entity.
Each fund, or accounting entity, is self-balancing and may include such accounts as cash, receivables, liabilities, and fund balance. Fund balance is also hard to understand in this context. It does not mean the balance of cash in the bank or on hand. A government, especially bigger ones, may and will have a number of funds. They are the general fund, special revenue fund, debt service fund, and the capital projects fund.