| Course | ACC-5070 Government and Not-for-Profit Organization Accounting |
|---|---|
| Module | Module 5 |
| Paper type | Written Assignment 5: government-wide financial statements |
| Length | About 731 words, 5 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 5
From $4.2 Million to $25.5 Million: Converting Lenape Hills Township's Funds to Government-Wide Statements
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
From $4.2 Million to $25.5 Million: Converting Lenape Hills Township's Funds to Government-Wide Statements
Introduction
The fund statements show what the township can spend this year; the government-wide statements show its full economic position. Converting from one to the other requires adding what modified accrual leaves out, capital assets and long-term liabilities, and adjusting revenues and expenses to the accrual basis. Reck et al. (2020) present the conversion as a worksheet process that most governments perform at year end rather than keeping a second set of books.
The Reconciliation
Each item has a reason rooted in the difference between the two measurement focuses. The $130,000 of deferred property taxes includes the $90,000 from Module 3, which was earned in 2026 but will not be collected within 60 days. Accrued interest of $95,000 reflects interest on all general obligation bonds since their last payment dates, including the library bonds. The pension line combines a $5,300,000 net pension liability with $1,100,000 of deferred outflows and $400,000 of deferred inflows of resources.
| Reconciling item | Effect | Amount |
|---|---|---|
| Total governmental fund balances | Starting point | $4,200,000 |
| Capital assets, net of accumulated depreciation | Not financial resources, so not in the funds | 38,600,000 |
| Property taxes deferred as unavailable in the funds | Earned, so revenue on the accrual basis | 130,000 |
| Internal service fund for the central garage | Serves governmental departments, so included in governmental activities | 260,000 |
| General obligation bonds payable | Not due from current resources | (12,400,000) |
| Interest accrued on bonds since the last payment | Not due until the next payment date | (95,000) |
| Compensated absences owed to employees | Paid from future resources | (610,000) |
| Net pension liability, with related deferred outflows and inflows | Long-term obligation | (4,600,000) |
| Net position of governmental activities | Result | $25,485,000 |
The Components of Net Position
Unrestricted net position is negative because the pension liability and compensated absences exceed the resources not tied up in capital assets or restricted. That does not mean the township cannot pay its bills; its General Fund balance is positive. It means that obligations already earned by employees exceed the resources set aside to pay them, a common situation for local governments since pension liabilities began appearing on the government-wide statements. Readers should understand that net investment in capital assets, though large, cannot be spent: it represents roads, buildings and equipment.
| Component | Calculation | Amount |
|---|---|---|
| Net investment in capital assets | $38,600,000 of capital assets less $12,400,000 of related debt | $26,200,000 |
| Restricted | Debt service, road aid and the cemetery permanent fund | 1,150,000 |
| Unrestricted | The remainder | (1,865,000) |
| Total net position | | $25,485,000 |
The Statement of Activities
In the activities statement, each function's own fees and grants are netted against its expenses.
General revenues of $8,860,000, mostly property taxes, cover the net expense of $8,450,000, increasing net position by $410,000. The format answers a question the fund statements cannot: how much each service costs taxpayers after its own fees and grants. Public safety, at $4.15 million net, absorbs nearly half of the general revenue the township raises.
Program revenues, such as charges for services and grants restricted to a function, are subtracted within each function, so the net expense column shows how much of each service general taxpayers fund.
| Function | Expenses | Charges for services | Operating grants | Capital grants | Net expense |
|---|---|---|---|---|---|
| General government | $2,100,000 | $300,000 | None | None | ($1,800,000) |
| Public safety | 4,800,000 | 250,000 | $400,000 | None | (4,150,000) |
| Public works | 2,600,000 | 120,000 | None | $700,000 | (1,780,000) |
| Recreation | 600,000 | 260,000 | None | None | (340,000) |
| Interest on long-term debt | 380,000 | None | None | None | (380,000) |
| Total governmental activities | $10,480,000 | $930,000 | $400,000 | $700,000 | ($8,450,000) |
Why the Conversion Matters
A reader who sees only the fund statements might conclude the township is comfortably funded, with $4.2 million of fund balance. The government-wide statements add the long-term picture: a large investment in infrastructure, substantial bonded debt and pension obligations that leave unrestricted net position negative. Research supports the value of this fuller picture. Baber and Gore (2008) found that standardized GAAP reporting was associated with lower municipal borrowing costs, which suggests investors use exactly the long-term information the conversion produces.
The government-wide statements, a layer added to state and local reporting by Statement No. 34 (Governmental Accounting Standards Board, 1999), also allow comparison across governments, because every government reports there on the same accrual basis, while fund statements depend on each government's fund structure. Rating agencies draw on the net pension liability and unrestricted net position when assessing a township's credit, which affects the interest rate it pays on new bonds.
References
Baber, W. R., & Gore, A. K. (2008). Consequences of GAAP disclosure regulation: Evidence from municipal debt issues. The Accounting Review, 83(3), 565-592. https://doi.org/10.2308/accr.2008.83.3.565
Governmental Accounting Standards Board. (1999). Basic financial statements, and management's discussion and analysis, for state and local governments (Statement No. 34). GASB.
Reck, J. L., Lowensohn, S. L., & Wilson, E. R. (2020). Accounting for governmental and nonprofit entities (19th ed.). McGraw-Hill Education.
Reading the ACC 5070 Module 5 assignment instructions
Module 5 joins the fund layer to the whole-government layer, and its written assignment is the fifth of the six graded sets in ACC-5070. Prompts in this module usually provide fund-level information and ask you to prepare the reconciliation of governmental fund balances to net position, compute the components of net position, prepare or interpret the statement of activities in its net cost format and explain the conversion adjustments. Some ask for a short explanation of why unrestricted net position can be negative. This sample continues the invented township from earlier assignments so its figures tie together; your prompt will give its own data and length guidance.
Inside the ACC 5070 Module 5 example
The introduction explains why conversion is needed and how governments perform it. The reconciliation table carries fund balance to net position with a reason for each item, and the paragraph after it ties several items back to earlier assignments. A second table divides net position into its three components, followed by an explanation of negative unrestricted net position and the limits of net investment in capital assets. The statement of activities appears in net cost format with a short interpretation of which functions consume general revenue. The closing section contrasts the conclusions a reader would draw from each layer and cites research on the value of standardized reporting.
Where the marks sit in the ACC 5070 Module 5 rubric
Conversion work like this is scored from 0 to 100, part of the 42 percent that written assignments carry. On a government-wide assignment, mentors check that each reconciling item has the correct sign and reason, that internal service funds and deferred revenue are handled correctly, that net position components are computed accurately and that the statement of activities follows the net cost format with program revenues properly classified. Interpretation, such as explaining a negative unrestricted balance, demonstrates understanding. Tables with labeled items make the work easy to verify and help secure partial credit when a single figure is off. A reconciliation that starts from total fund balance and ends exactly at net position, with each line explained, earns the strongest marks.
Common ACC 5070 Module 5 mistakes, and how to avoid them
Students often add long-term debt instead of subtracting it, or forget that deferred property tax revenue in the funds becomes revenue on the accrual basis. Go item by item and ask whether modified accrual left something out or counted something early. Include internal service funds that mainly serve governmental departments. When computing net investment in capital assets, subtract only capital-related debt. In the statement of activities, place grants as program revenues of the function they support. Keep a running total as you add each reconciling item, so an error shows up at the line where it occurs rather than at the end. A free first sample of your own ACC-5070 Module 5 assignment is available on request.
Write yours, or have the desk draft it
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ACC 5070 Module 5 questions, answered
Where can I find a free ACC 5070 Module 5 sample paper?
The township's fund-to-government-wide conversion is shown above: a reconciliation with a reason for each item, net position by component and a net cost statement of activities.
How do you reconcile fund balance to net position?
Add capital assets and earned-but-unavailable revenue, include internal service funds, and subtract long-term liabilities such as bonds, accrued interest, compensated absences and pensions.
What are the components of net position?
Three: what is sunk in capital assets net of their debt, what outsiders have restricted and whatever is left, which can fall below zero.
Why can unrestricted net position be negative?
Long-term obligations such as pensions and compensated absences can exceed resources not tied up in capital assets or restricted.
What is the net cost format of the statement of activities?
Each function's expenses less its program revenues, charges, operating grants and capital grants, showing the net cost covered by general revenues.