in business practice we are accustomed to using expenses in governmental accounting you will be using expenditures and expenses describe the major distinction between the two and discuss the importance of using the right terminology properly
1. Expenses vs Expenditures
In business practice we are accustomed to using ‘expenses.’ In governmental accounting, you will be using expenditures and expenses. Describe the major distinction between the two and discuss the importance of using the right terminology properly.
Governmental funds
Describe how the accrual concept is applied in governments on one of the following expenses: compensated absences, pension and OPEB, claims and judgments, inventories, prepayments, capital assets, and principal and interest payment on debt; as opposed to business.
A government entity that is under pressure to balance their budget decided to delay the salaries and wages from the last day of the month to the first day of the following month. This resulted in one fewer pay period in the year of change. How would the change affect the reported expenditures of a governmental fund under GAAP?
2. Revenue Recognition
Explain the nature and types of government revenue sources and discuss how they are accounted for. Research your local CAFR and share here the most significant source of your local government’s revenues. When is modified accrual versus full accrual used? Why? Explain the importance of inter-period equity. Why is this important in the revenue recognition process? Why the “available†criterion on revenue recognition is deemed significant?
In responding to your peers, put yourself in the shoes of either a fiscal manager or a taxpayer and discuss how the concepts here affect your decision- making process.
3. Budgets
Let’s discuss the types and key purposes of budgets for governmental and nonprofit entities. Assuming you are the fiscal manager for this local government, what type of budget would you recommend and why? How do budgets enhance control?