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    Governmental vs for profit accounting

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    What do you view as the biggest differences between governmental accounting and for-profit financial accounting? Explain your rationale.

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    https://brainmass.com/business/accounting/governmental-vs-for-profit-accounting-434136

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    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 ...

    Solution Summary

    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.

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