Five governmental funds are general funds, service revenue funds, debt service funds, capital projects funds and permanent funds. General funds accounts for all resources which are not accounted in any other funds. Special revenue funds accounts for revenues restricted for expenditures for specific purposes. Debt service finds accounts for revenues restricted for payment of long term debts. Capital projects funds accounts for revenues restricted on capital projects. Permanent funds accounts for revenues restricted to the extent of principal and not earnings. Governmental funds financial statement are accounted for using modified accrual basis of accounting and measurement focus is current financial resources rather than economic resources. Current financial resources measurement means that government focuses on only current financial resources available. Under modified accrual basis of accounting revenues are recognized when measurable and available for use and expenses are recognized when due, rather than accrued.
