What would be the measurement focus and basis of accounting of governmental funds? What is the...

What would be the measurement focus and basis of accounting of governmental funds? What is the traditional rationale for basis of accounting (used in governmental fund statements) as opposed to, for example, either a full-accrual basis or a budgetary basis?

Include a link to an article or current event to support your position.

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Expert Solution

GASB : Statement Number 11

It provides measurement focus and basis of accounting standards for governmental and expendable trust fund financial statements.

Measurement Focus refers to the expression about the the presentation and preparation of the financial statements and specifically WHAT is to be included in them. The measurement focus for governmental statements is the measurement of flow of financial resources.

A particular measurement focus is achieved by evaluating WHICH resources are measured and WHEN the effects of transactions and events involving those resources are recorded. WHEN effects are recorded is referred to as the BASIS OF ACCOUNTING.

Generally Accrual System is the traditional basis of Accounting i.e., Transactions and events are recorded as and when they happen rather than when the Cash is received or paid.

Reference Link: https://www.gasb.org/st/summary/gstsm11.html

ekkarill92 answered 2 years ago

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