05 Audit for FY01-02 - Laserfiche WebLink

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City of Paris, Texas Notes to Financial Statements (Continued) September 30, 2002 I. Summary of Significant Accounting Policies (Continued) B. Measurement Focus, Basis of Accounting and Basis of Presentation (Continued) Governmental Funds (Continued) Governmental Funds include the following fund types: The General Fund is the primary operating fund of the City. It accounts for all financial resources of the general government except those required to be accounted for in another fund. The Special Revenue Funds account for revenue sources that are legally restricted to expenditures for specific purposes (not including expendable trusts or major capital projects). The Capital Projects Funds account for the acquisition or construction of major capital projects, other than those financed by proprietary or non- expendable trust funds. The Debt Service Funds account for the servicing of general long-term debt not being financed by proprietary or non-expendable trust funds. Proprietary Funds are accounted for on the flow of economic resources measurement focus and use the accrual basis of accounting. Under this method, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. The City applies all applicable Financial Accounting Standards Board pronouncements issued after November 30, 1989, in accounting and reporting for its proprietary operations. Proprietary funds include the following: The Enterprise Funds are used to account for operations that are financed and operated in a manner similar to private business enterprises, where the governing body has decided that the determination of revenues earned, costs incurred, and/or net income is necessary for management accountability. The Internal Service Fund accounts for operations that provide services to other departments or agencies of the City on a cost-reimbursement basis. The City expects to make needed adjustments within a reasonable amount of time to eliminate the current deficit. Deficit retained earnings historically have been offset by contributed capital. Fiduciary Funds account for assets held by the City in a trustee capacity or as an agent on behalf of others. Fiduciary funds include the following: The Expendable Trust Fund is accounted for in essentially the same manner as the governmental fund types, using the same measurement focus and basis of accounting. Expendable trust funds account for assets where both the principal and interest may be spent. 16