Configuring Fund Types

ACE.

Sure, I can explain in detail the concept of fund types and the three fund types that fall under the Governmental Funds fund class in Microsoft Dynamics 365 Finance.

In Microsoft Dynamics 365 Finance, fund types are used to classify accounting transactions based on their source and purpose. Fund accounting is used by public sector companies to track and report financial information for different types of funds, such as governmental funds, proprietary funds, and fiduciary funds.

The Governmental Funds fund class includes funds that are used for general government operations and other activities that are not proprietary or fiduciary in nature. The three fund types that fall under this category are:

1. General fund: This is the primary operating fund for most governmental entities. It is used to account for all financial resources that are not accounted for in another fund.

2. Capital project funds: This fund type is used to account for financial resources that are restricted, committed, or assigned to capital projects, including the acquisition or construction of major capital facilities.

3. Debt service funds: This fund type is used to account for the repayment of debt principal and interest. It is used by governmental entities that have issued debt to finance capital projects or other activities.

The other fund types mentioned in the answer choices are not part of the Governmental Funds fund class:

• Trust funds are used to account for assets held in a trustee capacity for the benefit of individuals, private organizations, or other governmental entities.
• Enterprise funds are used to account for activities that are primarily funded by user fees, such as utilities or transportation services.

I hope this explanation helps!