Governmental accounting gives substantial recognition to budgets, with budgets being recorded in the accounts of the governmental unit. What is meant by "budgetary accounting"? What is the purpose of a governmental accounting system? Why is the budget recorded in the accounts of a governmental unit? Include in your discussion the purpose and significance of appropriations. Describe when and how a governmental unit (1) records its budget and (2) closes out the budgetary accounts.
Complete the discussion in Word Document. All references must be in APA format.
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According to Chevauchez, budgetary accounting verifies the execution of the Budget Law by monitoring government revenue operations and budget expenditure. This type of accounting only considers the expenditure and revenue and assets, liabilities, and others are not included in its concern. It is concerned only with revenue and expenditure that are budgetary or formally authorized by law. Other than those, it ignores other financing operations. It is a single entry accounting system with summary financial statements only catering to its purpose of showing how appropriations have been used and how revenues have been collected, an accounting system based on flow and without any stock accounting. Its objective is to verify compliance of the authorized budget granted by the government (Chevauchez, 2009).
Governmental accounting system plays a crucial role in public financial management. It is composed of the principles and procedures in accounting for government units. Encumbrances and budgets are recorded in the respective accounts and the assets of a government unit are designed for specific purposes. Accountability is the objective of ...
Budgetary accounting definition, purpose of governmental accounting system, significance of appropriations. References are in APA format.