Notes to Financial Statements PRUDENTIAL GOVERNMENT INCOME FUND, INC.
Prudential Government Income Fund, (the 'Fund') is registered under the Investment Company Act of 1940 as a
diversified, open-end management investment company. Investment operations commenced on April 22, 1985.
The Fund's investment objective is to seek a high current return. The Fund will seek to achieve this objective by
investing primarily in U.S. Government Securities, including U.S. Treasury Bills, Notes, Bonds and other debt
securities issued by the U.S. Treasury, and obligations issued or guaranteed by U.S. Government agencies or
instrumentalities, and by engaging in various derivative transactions such as the purchase and sale of put and call
options. Note 1. Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its
Security Valuation: The Fund values portfolio securities (including commitments to purchase such securities on a
'when-issued' basis) on the basis of current market quotations provided by dealers or by a pricing service
approved by the Board of Directors, which uses information such as quotations from dealers, market transactions
in comparable securities, various relationships between securities and calculations on yield to maturity in
determining values. Options and financial futures contracts listed on exchanges are valued at their closing price on
the applicable exchange. When market quotations are not readily available, a security is valued at fair value as
determined in good faith by or under the direction of the Board of Directors.
Short-term securities which mature in more than 60 days are valued at current market quotations. Short-term
securities which mature in 60 days or less are valued at amortized cost.
Repurchase Agreements: In connection with repurchase agreements with U.S. financial institutions, it is the Fund's
policy that its custodian, or designated subcustodians as the case may be under t