What do you view as the biggest differences between governmental accounting and for-profit financial accounting? Explain your rationale.© BrainMass Inc. brainmass.com October 2, 2020, 2:22 am ad1c9bdddf
What do you view as the biggest differences between governmental accounting and for-profit financial accounting? Explain your rationale.
First, who are the readers of the financial reporting? Governmental reporting is for general public use for the purpose of disclosure. A reader may determine whether a governmental unit is doing its job in terms of providing services and living within a prescribed budget. The readers are not stakeholders in terms of have a direct vested (financial) interest. Of course, there is interest in an indirect manner because, for example, taxes may increase if government doesn't perform as planned.
For profit stakeholders do have a direct vested interest in a personal ...
The 436 word cited solutions explains the three major differences in the accounting for governmental entities compared to for-profit companies. the use of examples provides for better understanding of concepts.