| Course | ACC-5070 Government and Not-for-Profit Organization Accounting |
|---|---|
| Module | Module 1 |
| Paper type | Written Assignment 1: introduction to accounting for governmental and not-for-profit organizations |
| Length | About 864 words, 6 pages |
| Format | APA 7 student paper |
| School | Thomas Edison State University |
| Program | Master of Science in Accounting |
| Updated | October 2026 |
Free sample paper for ACC 5070 Module 1
Eleven Activities, Nine Funds: Classifying the Accounts of Lenape Hills Township
Student Name
Master of Science in Accounting, Thomas Edison State University
ACC-5070: Government and Not-for-Profit Organization Accounting
Mentor Name
Month Day, Year
Eleven Activities, Nine Funds: Classifying the Accounts of Lenape Hills Township
Question 1: Why does governmental and not-for-profit accounting differ from business accounting?
A business keeps accounts mainly to measure profit for owners and lenders. A township has no owners expecting a return, and a museum's donors expect their gifts to be used as promised, not to generate dividends. Reck et al. (2020) explain that reporting in these sectors is built around accountability: showing that resources were raised and spent legally, as budgeted and for the purposes intended, and showing whether the organization can keep providing services. Three features follow. Budgets in governments are legally adopted and limit what may be spent, so the accounts track spending against appropriations. Resources often come with restrictions from laws, grantors or donors, so they must be tracked separately. And taxpayers and donors cannot easily withdraw their support in the way a shareholder can sell stock, so they rely on reports to hold managers to account.
Question 2: Who sets the standards?
A public university or a county-owned hospital follows the GASB because it is a government, while a private university or a nonprofit hospital follows the FASB. Ownership, not the type of service, decides which board's rules apply.
| Entity | Standard setter | Basic framework |
|---|---|---|
| States, counties, cities, townships, school districts, public authorities | Governmental Accounting Standards Board | Fund accounting with government-wide and fund statements |
| Private not-for-profit organizations, such as museums, hospitals and universities | Financial Accounting Standards Board | Net assets with and without donor restrictions |
| The federal government and its agencies | Federal Accounting Standards Advisory Board | Federal financial reporting standards |
Question 3: Which families of funds does a government keep?
Governmental funds account for the activities financed mainly by taxes and intergovernmental revenue: the General Fund, special revenue funds for legally restricted or committed revenue sources, capital projects funds for major construction, debt service funds for paying principal and interest on general long-term debt, and permanent funds whose earnings, but not principal, support the government's programs. These funds use the current financial resources measurement focus and the modified accrual basis (Governmental Accounting Standards Board [GASB], 1999).
Proprietary funds account for business-type activities that charge fees: enterprise funds serve the public, as a water utility does, and internal service funds serve other departments of the same government on a cost-reimbursement basis. They use the economic resources focus and full accrual, like businesses.
The fiduciary family covers money the township merely holds for somebody else, which it may never spend on its own services; it has four kinds, from pension and employee benefit trusts through investment trusts and private-purpose trusts to custodial funds.
Question 4: Classifying Lenape Hills Township's activities
Lenape Hills Township, a composite community of about 14,000 residents in Hunterdon County, carries out the following activities.
The last item shows that charging a fee does not automatically put an activity in an enterprise fund. An enterprise fund is required when the activity is financed by debt secured only by its fees, when laws require fees to cover costs or when pricing policies set fees to recover costs including capital costs. Partly subsidized recreation programs meet none of those tests.
| Activity | Fund | Reason |
|---|---|---|
| Police patrol, municipal court and administration paid from property taxes | General Fund | Ordinary operations not required to be accounted for elsewhere |
| State highway aid that may be spent only on local road repairs | Special revenue fund | A restricted revenue source dedicated to a specific purpose |
| Building a new branch library with general obligation bond proceeds | Capital projects fund | Acquisition of a major capital facility |
| Setting aside taxes each year to pay the library bonds | Debt service fund | Accumulating resources for general long-term debt principal and interest |
| Water system that bills residents for usage | Enterprise fund | Fees charged to the public cover the cost of the service |
| Central garage that maintains all township vehicles and bills departments | Internal service fund | Services provided to other departments on a cost-reimbursement basis |
| A bequest whose interest pays for upkeep of the public cemetery, principal kept intact | Permanent fund | Earnings, not principal, support a government program |
| Retirement plan for township employees held in trust | Pension trust fund | Resources held for employees' benefits |
| Property taxes collected for the county and school district and passed on | Custodial fund | Resources held temporarily for other governments |
| Scholarship trust from a former mayor benefiting individual students | Private-purpose trust fund | Benefits specific individuals, not the public generally |
| Recreation programs funded by fees that cover only part of their cost and are subsidized by taxes | General Fund | Fees do not cover costs, so enterprise fund reporting is not required |
Question 5: Why does the fund structure matter to users?
Funds let readers see whether restricted money was used for its purpose. A resident can check that state road aid went to roads and that the water utility's fees cover its costs rather than drawing on property taxes. Bond analysts look at the General Fund's balance as a cushion against revenue shortfalls; Marlowe (2011) found that higher General Fund balances relative to spending were associated with better credit ratings, up to a point beyond which additional reserves added little. Fund reporting therefore serves both accountability and the government's cost of borrowing.
References
Governmental Accounting Standards Board. (1999). Basic financial statements and management's discussion and analysis for state and local governments (Statement No. 34).
Marlowe, J. (2011). Beyond 5 percent: Optimal municipal slack resources and credit ratings. Public Budgeting & Finance, 31(4), 93-108. https://doi.org/10.1111/j.1540-5850.2011.00994.x
Reck, J. L., Lowensohn, S. L., & Wilson, E. R. (2020). Accounting for governmental and nonprofit entities (19th ed.). McGraw-Hill Education.
ACC 5070 Module 1 instructions, in plain terms
The first of ACC-5070's six written assignments, which together count 42 percent of the grade, introduces the sector. The syllabus explains that some assignments call for relatively short answers and others for brief papers of two to five pages, that each assignment states its own length guidance and that every part must be addressed in organized, well-written form. This one is the short-answer kind. Expect questions on how government and nonprofit accounting differ from business accounting, which standard setter applies to which entities, the categories and types of funds and how to classify specific activities. This sample answers five such questions for an invented township; your mentor's questions come from the course site.
How the ACC 5070 Module 1 example is put together
Each answer appears under the question it addresses, so the mentor can match them quickly. The first explains accountability as the purpose of reporting and draws three practical consequences. A table assigns standard setters by type of entity and makes the point that ownership decides. The fund categories are explained by family with their measurement focus and basis. The classification answer uses a table with a reason for every activity and then explains the deliberate trap, a fee-supported program that still belongs in the General Fund. The final answer connects fund reporting to users, citing research on fund balance and credit ratings, which shows why the classifications matter.
Where the marks sit in the ACC 5070 Module 1 rubric
Mentors mark this fund-sorting set on a hundred-point scale, and it sits among the six assignments that decide 42 percent of ACC-5070. For this introductory set, mentors look for accurate distinctions between the sectors, the correct standard setter for each kind of entity, fund types identified with their measurement focus and basis, and classifications that cite the criteria in the standards. Explaining borderline cases, such as fee-supported activities that do not qualify as enterprise funds, shows understanding beyond memorization. Answers should be complete, organized under the question numbers and written with proper grammar, as the syllabus specifies. Citing the textbook supports each explanation. Naming the governing body that sets standards for each entity type is a quick but frequently missed point.
ACC 5070 Module 1 help: mistakes that cost marks
Answers slip when they sort activities by what the service looks like instead of by the GASB tests, so that anything charging a fee lands in an enterprise fund, or when they put money held for outsiders beside restricted tax money in a governmental fund. Ask whose resources they are: the government's own restricted resources belong in governmental funds, while resources held for others belong in fiduciary funds. Remember that ownership decides the standard setter, so a public university follows the GASB. Use a table for classification questions. A one-line reason beside each classification, naming the resource flow that decided it, is what lets a mentor follow your thinking. A free first sample of your own ACC-5070 Module 1 assignment is available on request.
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ACC 5070 Module 1 questions, answered
Where can I find a free ACC 5070 Module 1 sample paper?
The township fund assignment is printed in full above: five short answers on sector differences, standard setters, fund categories and eleven activities classified with reasons.
Who sets accounting standards for state and local governments?
The Governmental Accounting Standards Board; private nonprofits follow the FASB and the federal government follows the FASAB.
What are the three categories of government funds?
Governmental funds, proprietary funds and fiduciary funds, each with several fund types.
When must a government use an enterprise fund?
When an activity is financed with debt secured solely by its fees, when laws require fees to cover costs or when pricing policies set fees to recover costs.
What is a permanent fund?
A governmental fund in which only the earnings, not the principal, may be used to support the government's programs, such as a cemetery perpetual care fund.