General fixed assets are excluded from governmental funds because

Question

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The measurement focus of governmental funds is on financial resources, which includes current assets (such as cash and receivables) and capital assets that are specifically used to provide services (such as highways, parks, and buildings). General fixed assets, such as land, buildings, and equipment, which are not used to generate revenues, are not included in governmental funds. Additionally, the basis of accounting for governmental funds is modified accrual, which only recognizes revenues and expenditures when they become available or due, respectively, and does not recognize capital assets such as land, buildings, and equipment.

General Fixed Assets Are Excluded from Governmental Funds Because