Meaning of Government Accounting Every state or country has its own government. Accounting system that is applied and followed by the government offices is known government accounting. It records the financial transactions of the government offices. It is related to keep record of government revenue, expenditure, penalties, subsidies, grants, loans, etc.
It is the process of recording, classifying, summarizing and interpreting the financial transaction of the government. The accounting system used in government offices to record and report their financial transactions is known as government accounting. is concerned with systematic and scientific recording of government revenue and expenditure.
It is the systematic process of collecting, recording, classifying, summarizing, and interpreting the financial transactions related to the revenue and expenditure of government offices. It reveals how public funds have been generated and utilized for the welfare of the general public. Dear Students, The government of state or the central government runs on the tax of the public.
Government charge different types of taxes to the public or business person. Government collect all the revenue from the public or business person as a tax and government also expenses this tax amount to the public so collecting amount from the tax or VAT or GST and expenditure this amount to the public is the Part of Government Accounting Objectives of Government Accounting The main objectives of Government Accounting are given below. Recording Financial Transactions It is the first objective. In Government Accounting, financial transactions are recorded. These transactions are related to revenue and expenditure of government organizations.
Avoiding the excess expenditures Government offices cannot make more expenditure beyond the limit of budget expenditures. Annual budget expenditures are approved by the government. Budget head Government offices make expenditure according to budget head.
They follow appropriate act, rules, and legal provision of the government. Providing Financial Data Government offices provide reliable financial data and information. These data are about the operation of public funds. Banking Transactions All government transactions are performed through banks. All operating level offices use District Treasury Controller Office for banking transactions.
It helps to prevent misappropriation of cash. Information Related data users can use different types of information provided by government offices. Ministry of Finance provides historical financial data of government revenue and expenditure. Features of Government Accounting The main features of government accounting are given below. 1. Government Regulation Government accounting is maintained according to government rules and regulations.
The financial policies, rules and regulations determine the systems of government accounting. Double Entry System Government accounting is based on the principle of double entry system of bookkeeping. Every government financial transactions are recorded showing their double effect. One aspect is debit and other is credit.
It means in every financial transaction there are two transactions. One is debit, other is credit. Budget Head All the expenses of government offices are classified into different budget heads. Expenditures are made only on approved budget heads.
Budgetary Control Government accounting facilitates budgetary control. Government offices cannot make expenditure more than allowed budget amount. Banking Transactions All government transactions are performed through bank.
All operating-level offices use District Treasury Comptroller Office for banking transactions. Auditing The concerned department of the government must audit the book of accounts. They audit financial books to provide misuse and misappropriation of public funds.
No profit and loss. The main work of government office to provide government service to the public. Government office says do not sell business goods.
Therefore, the government accounting does not reveal profit and loss. Differences between Government and Commercial Accounting Commercial accounting is mostly used in different business organizations. Government accounting is used in different government offices. Major differences are as follows. Government Accounting, Commercial Accounting Use Government accounting is used to record transactions that take place in government offices.
Commercial accounting is used to record transactions in commercial organizations. Cash or Accrual It is normally maintained in cash basis. It is maintained in accrual basis.
Here accrual means outstanding and prepaid are shown in financial transaction and cash basis means outstanding and prepaid is not shown in financial transactions or statement. Profit and loss. There is no way is related to show profit or loss in government accounting. In commercial accounting, it is related with profit or loss.
Control Government accounting is based on budgeting principle. Thus, it is controlled by budget. Commercial accounting is not rigidly guided and controlled by budget. Government rule It is strictly maintained government rule and acts.
Commercial accounting is maintained without following specific rule expect some government rules and regulation towards the taxes.