Fund accounting involves breaking the income of the entity into categories to match the expenses of those projects or departments. The general purpose of this is to restrict the allocation of funds and to hold each fund responsible for staying on budget. This purpose is thwarted, however, if the financial statements do not include the performance of the individual funds. The reconciliation of the individual funds to the general fund is an aspect of government and not-for-profit accounting that does not exist in the private sector and is central to the mission of fund accounting.
             According to Note D on pages 58 to 60, each fund is accounted for as a separate entity, all using an accrual basis. The activities of the funds are then merged into one statement in a process similar to consolidating the financial statements of a large corporation. Activity between funds is not included in the government-wide funds because the net result would be zero. Note R, section 5 on page 70 summarizes the most critical activities between funds.
             Funds can be separated into several categories. The two most important are business-like funds, which have both incoming revenue and expenses, and governmental funds which primarily have expenses. Governmental funds are more common, as can be seen by the breakdown between them starting on page 39.
             A subset of business-type funds are enterprise funds.
             Enterprise Funds are used to account for operations (a) that are financed and operated in a manner similar to
             private business enterprises where the intent of the governing body is that the costs (expenses, including
             depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered
             primarily through user charges; or (b) where the governing body has decided that periodic determination of
             revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public poli...