Why do some accountants believe that it should offset the year-end inventory balance with a fund balance—non-spendable when no comparable fund balance is required for cash, taxes receivable, or most other assets?

Option #1: A Government Accounts for Inventory on the Consumption Basis

1. Why do some accountants believe that it should offset the year-end inventory balance with a fund balance—non-spendable when no comparable fund balance is required for cash, taxes receivable, or most other assets?
2. How should governments report their capital projects and debt service activities in their government-wide statements?

In your analysis, include the following:

1. An introduction
2. Requirements 1 – 2
3. Conclusion

Paper Requirements:

• Submit your responses to the questions in a 1- to 2-page document in MSWord. Label each question clearly. For computations, please include them in a table.
• For written answers, please make sure your responses are well written.