Accounting for the Government

Running Head: Accounting for the Government
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Accounting for the Government

Accounting for the Government 2
Overview
The term accounting is one of the most important elements in determining the financial position
for the entities of the government. Every entity is required to record the daily transactions either
manually or in the software. This in fact requires the accounting treatment which must be
followed by the corporates. In this report the accounting for the governmental and nonprofit
entities have been presented in detail along with the consideration of various other terms as well.
Further different types of the fiduciary funds are also analyzed in detail to get an insight of how
it operates while the accounting of the governmental organization is taking place.
Accounting for the Governmental Organizations
Accounting for the governmental and the nonprofit entities refers to the recording of the
transactions of the government entity and the major difference in comparison to the other entities
lies in the framework of the environment in which the accounting is being undertaken. Few of
the examples if the governmental organizations are those agencies which have been established
with the help of the legislative committee. The goals are being differentiated and there exists the
huge responsibility of the fiscal accountability which is the showcase of the consent in the usage
of all the resources with respect to the context of the budgetary needs. The transactions of the
governmental entities are recorded as per the guidelines prescribed by the US GAAP. The
authority of the Government is derived by the citizenry and the government is divided into many
layers (Ruppel., 2015).
The government prepares the budget for the general and the main operating fund, which provides
an expression of the public policy as well as the control mechanism. This way the revenue is also
decided which is kept aside for the welfare of the public, Also these funds are utilized for the
maintenance of the government. Sometimes governments are lawfully required to set up isolated
assets for specific arrangements of exchanges, while different occasion’s governments set up
assets for their own control and money related announcing purposes. Notwithstanding the reason,
announcing data by reserve is presently exceptional to the administrative condition. At times the
readers are may be acquainted with not-revenue driven bookkeeping may review that not for-
benefit associations were earlier required to show subsidize data in their budget summary.

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Therefore financial reporting of the governmental organizations was changed several years ago
(Ruppel., 2015).
There are several types of the capital resources of a governmental body that are typically
incorporating its structures, hardware, vehicles, etc. For example building of the school or any
building in the favor of the welfare of the society or streets, spans, parks, Governments don't buy
or develop capital resources since they anticipate a direct financial return on their venture.
Building another school building will not legitimately create income from its utilization.
Revamping Central Avenue won't produce income from its utilization except if, obviously, it is a
toll street. Business ventures contribute in a large number of their capital resources since they
create a rate of return, for example, another processing plant or another retail location (Lisic,
Silveri, Song & Wang, 2015).
Accounting for the Nonprofit Organization
Usually there are the many entities whose aim is to earn profit and the majorly focus on
increasing g the same however, there also exists the Nonprofit organization whose major motive
is not to earn the profit and are built for the welfare of the society and the promotion of the
different forms of the art and the culture. These institutions are usually set up with the mindset to
provide the qualitative services. The trustees are the key people who are associated with this
organization. The major source of the raising of the funds is from the members as well as the
general public. Since these institutions are not made for the production of the goods and the
services therefore they are not required to prepare the trading, profit and loss account. The funds
are being credited to the general or the capital fund. Though they are not required to prepare the
accounts, however they are advised to the record for the better presentation and the accessible
donations. These institutions are also required to follow the law and keep aside certain funds to
be able to ready to deal with the expenses (Bruno & Lapsley, 2018).
There are certain terms that are constantly being used by while treating the accounting
transactions of the governmental bodies and therefore these are also explained in detail.
Proprietary funds
A proprietary fund is the fund that is used in the process of the governmental accounting to
vouch for those activities that involve business like interactions either within the boundary of the