Question

1. Discuss the financial statements that are prepared in government accounting.

2. In what way are they different from those prepared in business accounting?

Answer 1

1) Financial statement prepare in goverment accounting are specifically different then normal financial statements of prepare in generally accepted accounting principles (GAAP). whereas goverment accounting follow govermennt accounting standards.

Basis of Financial Statement

• Cash/Cost Based Accounting System
• Accural Based Accounting
• Or Combination of above

Financial statement usually Prepared on basis revenue collected and amount spent or non profit orgganisation model rather then business model for profit

1. A balance sheet or statement of financial position, reports on a company's assets, liabilities, and owners equity at a given point in time or Date.
2. An income statement or statement of comprehensive income, statement of revenue & expense, P&L or profit and loss report, reports on a company's income, expenses, and profits over a period of time. A profit and loss statement provides information on the operation of the enterprise. These include sales and the various expenses incurred during the stated period.
3. A Statement of changes in equity or equity statement or statement of retained earnings, reports on the changes in equity of the company during the stated period.
4. A cash flow statement reports on a company's cash flow activities, particularly its operating, investing and financing activities.

2) Bases of Differences

1. Primary bases of difference of govermment account statement and Business accounting staement is to provide more complete data for fiscal planning by producing Financial Statement.
2. In Goverment Accounting statement are prepare to define how projection linked with fiscal budget are aligned with accounting. business accounting is specifically prepare to define business goals