| Course | ACC 405 Advanced Accounting |
|---|---|
| Module | Module 8 |
| Paper type | undergraduate governmental and not-for-profit accounting assignment |
| Length | About 1,010 words, 6 pages |
| Format | APA 7 student paper |
| School | Southern New Hampshire University |
| Program | BS Accounting |
| Updated | October 2026 |
Free sample paper for ACC 405 Module 8
Taxes, a Fire Truck and a Research Grant: Governmental Funds and Not-for-Profit Net Assets in Maple Country
[Student Name]
Southern New Hampshire University
ACC 405: Advanced Accounting
Module Eight Assignment
[Instructor Name]
[Date]
The organization, setting and figures below are a composite written as a model document. No real employer, client, colleague or patient is described.
Taxes, a Fire Truck and a Research Grant: Governmental Funds and Not-for-Profit Net Assets in Maple Country
Introduction
Governments and not-for-profit organizations do not report profit, because their purpose is not to earn it. A town is accountable to taxpayers for how it raised and spent public money, and a nonprofit to donors for whether it honored their restrictions. These purposes produce reporting models unlike the business accounting of earlier modules. This assignment applies the governmental model to a composite New Hampshire town of about 9,000 people and the not-for-profit model to a regional maple producers' association, recording typical transactions and explaining how each differs from business practice (Granof et al., 2019).
The Town: Property Taxes Under Modified Accrual
The town levied $6,200,000 of property taxes for the fiscal year and expects 2 percent to be uncollectible. Governmental funds use the modified accrual basis, which recognizes revenue only when it is measurable and available, which in practice means cash in hand by year end or arriving within about two months, in time to pay this year's bills. At year end, $180,000 of collectible taxes are expected to arrive later than 60 days.
Table 1. Property Tax Recognition in the General Fund
| Item | Amount |
|---|---|
| Levy | $6,200,000 |
| Estimated uncollectible (2%) | (124,000) |
| Collectible taxes | 6,076,000 |
| Not available (collected after 60 days), deferred inflow | (180,000) |
| Property tax revenue recognized in the general fund | $5,896,000 |
In the government-wide statements, which use the full accrual basis, the town recognizes the entire $6,076,000 of collectible taxes as revenue in the year for which they were levied, so the $180,000 deferral is a reconciling item.
The Fire Truck and the Bonds
The town bought a $480,000 fire truck, paying $80,000 from current revenue and $400,000 from a five-year general obligation bond. In the general fund, the truck is a capital outlay expenditure of $480,000, and the bond proceeds are an other financing source of $400,000; neither the truck nor the debt appears on the fund balance sheet, because the fund reports only current financial resources (Governmental Accounting Standards Board, 1999).
In the government-wide statements, the same transaction is reported as a business would, which is why the town's capital asset records must be kept outside the general fund's ledger: the truck is a capital asset depreciated over its 15-year life, $32,000 a year, and the bond is a long-term liability. The difference explains much of the gap between the general fund's change in fund balance and the government-wide change in net position. A reader who looked only at the general fund would see a town that spent $480,000 and borrowed $400,000 in one year; a reader of the government-wide statements would see a town that acquired a long-lived asset and took on debt to be repaid over five years, with a modest annual depreciation charge. Both views are accurate, and the reconciliation below connects them.
The Maple Festival Special Revenue Fund
The town's annual maple festival charges vendor fees and admission, which a town meeting vote restricted to festival costs. Those revenues, $64,000 this year, and the related expenditures, $58,000, are reported in a special revenue fund rather than the general fund, so that taxpayers can see that festival revenue was spent on the festival. The fund ends the year with a restricted fund balance of $6,000.
Reconciling Fund Balance to Net Position
Table 2. Reconciliation Items, Governmental Funds to Government-Wide
| Item | Effect on government-wide change in net position |
|---|---|
| Capital outlay reported as expenditure, now capitalized | +$480,000 |
| Depreciation on the new truck | (32,000) |
| Bond proceeds reported as other financing source, now a liability | (400,000) |
| Property taxes deferred in the fund, recognized government-wide | +180,000 |
The Producers' Association
The maple producers' association is a private not-for-profit organization reporting under the FASB's not-for-profit standards. It classifies net assets as with donor restrictions or without donor restrictions (Financial Accounting Standards Board, 2016).
Table 3. Association Transactions
| Transaction | Classification | Amount |
|---|---|---|
| Member dues | Revenue without donor restrictions | $220,000 |
| Three-year grant from a foundation restricted to sap quality research | Revenue with donor restrictions | 150,000 |
| Research costs paid from the grant this year | Release from restriction; expense without donor restrictions | 50,000 |
| Donated services of a sugarmaking expert who teaches workshops | Revenue and expense without donor restrictions | 12,000 |
The grant is recognized in full when the unconditional promise is received, in net assets with donor restrictions, not as it is spent. When $50,000 is spent on the research, a reclassification moves it to net assets without donor restrictions, where the expense is reported. The expert's donated time is recognized because the workshops require specialized skills, the expert has them and the association would otherwise pay for them; general volunteer help at the association's booth would not be recognized.
Why the Models Differ
The rules that seem odd to a business accountant follow from what each reader needs. A town's budget is adopted on a current-resources basis, and taxpayers and the state want to know whether this year's taxes paid for this year's services. The general fund answers that question, which is why a fire truck counts as spending in the year it is bought. But a town that only reported funds would hide its aging equipment and its debt, so GASB Statement No. 34 added government-wide statements on the full accrual basis to show what the town owns and owes over the long term. For a nonprofit, donors want to know whether gifts were used as they directed, so the statements separate what was given with restrictions from what was not, and record a restricted gift as revenue when promised rather than when spent. In both cases the reporting model is shaped by accountability rather than by profit.
Conclusion
The town recognizes $5,896,000 of property tax revenue in its general fund under modified accrual, reports its fire truck and bonds as an expenditure and a financing source in the fund but as an asset and liability government-wide, and keeps festival revenue in a special revenue fund. The association records its $150,000 grant as restricted revenue, releases $50,000 as it is spent and recognizes $12,000 of specialized donated services. Each model fits its users: taxpayers asking how current resources were used and donors asking whether their restrictions were honored.
References
Financial Accounting Standards Board. (2016). Not-for-profit entities (Topic 958): Presentation of financial statements of not-for-profit entities (Accounting Standards Update No. 2016-14). Author.
Governmental Accounting Standards Board. (1999). Basic financial statements and management's discussion and analysis for state and local governments (Statement No. 34). Author.
Granof, M. H., Khumawala, S. B., Calabrese, T. D., & Smith, D. L. (2019). Government and not-for-profit accounting: Concepts and practices (8th ed.). Wiley.
What the ACC 405 Module 8 instructions ask for
The final ACC 405 assignment usually introduces governmental and not-for-profit accounting. Expect to record transactions in a government's general fund and other governmental funds using the modified accrual basis, then show how the same transactions appear in government-wide statements on the accrual basis, and to record a not-for-profit organization's contributions, grants and expenses in net assets with and without donor restrictions. Many versions ask for a reconciliation between fund and government-wide statements or a statement of activities for the nonprofit. Explain the measurement focus and basis of accounting for each, since most errors come from applying business accounting habits to entities with different reporting purposes.
How this ACC 405 Module 8 governmental and not-for-profit assignment example is built
The sample records four town transactions. A $6,200,000 property tax levy, with 2 percent expected uncollectible and $180,000 collected more than 60 days after year end, produces $5,896,000 of general fund revenue. A $480,000 fire truck is an expenditure in the general fund but a capital asset in the government-wide statements, and the $400,000 of bonds that financed it is an other financing source in the fund but a liability government-wide. The festival's ticket and vendor fees run through a special revenue fund. For the association, a three-year $150,000 research grant is revenue with donor restrictions, $50,000 is released when spent, and a sugarmaking expert's donated services worth $12,000 are recognized because they require specialized skills.
Where the ACC 405 Module 8 rubric puts the points
Rubrics for the ACC 405 governmental and not-for-profit assignment typically score fund journal entries, the application of modified accrual, the government-wide treatment and reconciliation, the not-for-profit entries and net asset classification, and the explanation. Top papers recognize property tax revenue only when measurable and available, record capital outlay and bond proceeds correctly in the fund and convert them in the government-wide statements, classify contributions by donor restriction and recognize releases when restrictions are met. Graders reward clear reconciliation items and an explanation of why each one exists, since the reconciliation is where understanding of the two bases shows. Common deductions include recording capital assets in the general fund, mixing fund balance categories, treating bond proceeds as revenue and recognizing restricted grants as unrestricted revenue.
ACC 405 Module 8 help: the mistakes that cost points
Students tend to struggle with this assignment because business accounting habits mislead them: capitalizing a fire truck in the general fund, recording bond proceeds as a liability there, or recognizing a restricted grant only when spent. The fund statements answer whether current resources covered current spending; the government-wide statements answer what the town owns and owes, so the same truck appears differently in each. If your problem includes enterprise funds, pension obligations or a nonprofit's endowment, the same distinctions apply and we can work through them with your figures. Label every entry with its fund or net asset class before writing the amounts, and the conversion to government-wide figures becomes a list rather than a puzzle.
Get ACC 405 Module 8 written to your instructions
Send the ACC 405 Module 8 transactions and instructions. The paper will record each in the right fund or net asset class, apply modified accrual or the not-for-profit rules, prepare the reconciliation or statements required and explain the differences from business accounting. Delivery is usually two days out, with no fee on your first request. The paper above is an original model document written by our desk, not a submitted student paper and not an official Southern New Hampshire University document.
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ACC 405 Module 8 questions, answered
Where can I find a free ACC 405 Module 8 governmental and not-for-profit sample?
This page includes a full ACC 405 Module 8 assignment with a town's general fund under modified accrual and a nonprofit's restricted grant.
What is the modified accrual basis?
The basis used by governmental funds, recognizing revenue when measurable and available to pay current obligations and expenditures generally when the related liability is incurred.
How is a capital asset purchase recorded in a governmental fund?
As an expenditure in the fund. The asset itself is reported only in the government-wide statements, where it is capitalized and depreciated.
Are bond proceeds revenue in a governmental fund?
No. They are an other financing source in the fund and a long-term liability in the government-wide statements.
When are donated services recognized by a not-for-profit?
When they create or enhance nonfinancial assets, or require specialized skills, are provided by people with those skills and would otherwise have to be purchased.