Intercompany Transactions and Governmental Fund Accounting

Wilma Bates is executive vice president of Mavis Industries Inc., a publicly held industrial corporation. She has just been elected to the city council of Gotham City. Before assuming office, she asks you to explain the major differences that exist in accounting and financial reporting for a large city when compared to accounting and reporting for a large industrial corporation.

Problems:

1. Describe the major differences in the purpose of accounting, of financial reporting, and in the type of financial reports of a large city when compared to a large industrial corporation.
2. Why are inventories often ignored in accounting for local governmental units? Explain.

Address Problems 1 and 2 above, based on information provided in the case study. If you wish to present calculations to help make your responses more complete, show those calculations in a table in your paper. The paper must be a Word document two-to three-pages in length in APA 6th format.