Question

What topic in this class on Governmental and Non-Profit accounting was the most relevant to you?

What is your impression of governmental and NFP accounting?

Answer 1

The topic of Budgets & encumbrances in the class on Governmental and Non-Profit accounting was the most relevant to me, wherein a set of objectives for a particular financial year were decided upon and then accordingly revenues as well as expenses were estimated as a result of which, budgeted income and position statement were formed. At the end of the said year the actual as well as budgeted income and position statement were compared and the deviations were studied. The negative variations were analysed and reasons for excessive spending were found out and accordingly suggestions for curbing the excessive expenditure for the successive accounting period were framed. It is relevant to me because it not only focuses on a particular period, but is an important step in implementing long term growth in the organisation.

- My Impression of governmental and NFP accounting:

In my opinion, the governmental and NFP accounting is a great practice wherein books of governmental and NFP organisations are maintained, in order to increase transparency to the donors as well as stakeholders of the ultimate usage of funds contributed by them and at the same time for keeping a track of inflow and outflow of money from the organisation. In the said system, fund based accounting is done wherein the inflows of funds created for predefined purposes are used for meeting the expenses regarding the same purpose. Also, budgets and encumbrances are created wherein negative variations were analysed and reasons for excessive spending are found out and accordingly suggestions for curbing the same are framed. Also, since there is no profit, there is no hassle of tax-related reporting. However, one major concern related to such accounting is that since there is public money involved, one must maintain a careful check of whether the same is not being misappropriated.