Why Is It Necessary to Reconcile Total Fund Balances Reported

question 45

Essay

Why is it necessary to reconcile total fund balances reported on the balance sheet-governmental funds to total net assets reported for governmental activities on the government-wide statement of net assets,and net changes in fund balances in fund balances-total governmental funds to the change in net assets reported for governmental activities on the government-wide statement of activities?

---

Definitions:

Special Journal

A specialized accounting journal designated for the recording of specific types of transactions, such as sales or purchases, to increase efficiency and organization.

General Journal

A primary accounting record used for recording all types of financial transactions, providing a chronological record of all business activities.

Personal Withdrawal

It refers to the money taken out of a business by its owner(s) for personal use, often considered as a draw against the owner's equity.

Post. Ref.

An abbreviation for "posting reference," used in accounting ledgers to indicate the connection or correlation between journal entries and the accounts they affect.