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Using the information below, what amount should be accounted for in a special revenue fund or funds?

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Final answer:

To calculate the amount for a special revenue fund, subtract explicit costs from total revenues. In the given scenario, an accounting profit of $115,000 is derived, which may represent the amount for the special revenue fund after designated expenditures.

Step-by-step explanation:

To determine the amount that should be accounted for in a special revenue fund, it is essential first to understand the revenues and explicit costs. A special revenue fund is used to account for proceeds from specific revenue sources that are legally restricted to expenditure for specific purposes. The question provides a scenario with various revenue and cost figures.

First, you calculate the explicit costs, which includes office rental and a law clerk's salary totaling $85,000. Then you compare these costs with the revenues. In the given example, total revenues are stated as $200,000. To find the amount for the special revenue fund, you subtract the explicit costs from the total revenues to derive the accounting profit, which in this case would be $115,000 ($200,000 - $85,000). If this figure represents a surplus after all restrictions and designated expenditures are met, it could potentially be the amount recorded in a special revenue fund. This calculation aligns with the basic concepts of governmental accounting, where revenues minus expenditures reflects the net changes in fund balances.

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