FR U3DB initial
FR U3DB Initial
FR U3DB Initial
In its simplest form, the term budgetary accounting can be defined as the method of accounting whereby the actual amounts spent and the amounts that were planned for are recorded so that the spending can always be compared to the prospects and determine how much of the deficit or surplus is realized (Wiley, 2017). Budgetary accounting is especially important in projects and marketing planning.
Purposes of Governmental Accounting System
Governmental accounting systems are the ones that are mostly used in nearly all the public-sector entities. There are some purposes that these systems serve. Among them include recording all the financial transactions of any incomes and expenses that are incurred in government organizations. They also serve the purpose of avoiding or other controlling expenditure so that the government organizations can only spend within the limits of the budget. Further, they aid in providing financial data and information that can be relied upon in decision making regarding the operations that are financed by the public funds (Wiley, 2017). As such, they facilitate the auditing of governmental books of accounts. Finally, the governmental accounting systems are important in annual budget estimation as they provide historical financial information for the government.
Why budget is recorded in the accounts of a governmental unit
The core reason as to why the budget is recorded in the accounts of a governmental unit is to ensure that records are available for use in the future (Lee, Johnson, & Joyce, 2013).
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These records provide historical data and at the same time help the auditors to successfully execute their mandates.
Purpose and Significance of Appropriations
Appropriation ‘s main purpose is to set aside funds that can be spent on the various business or governmental operations. It is significant as it helps the management or the responsible authorities to know in prior the available funds and hence limit their operations within the budget.
Budgets for Governmental Units
The governmental unit records their budgets at the beginning of each financial year. The budgets are recorded through the various organs and departments of the government (Dittenhofer, Smith & McSwain, 2013). Closing out of the budgetary accounts takes place at the end of each financial year.
Dittenhofer, M. A., Smith, G. R., & McSwain, D. N. (2013). Applying government accounting principles. [Place of publication not identified]: Matthew Bender & Company
Lee, R. D., Johnson, R. W., & Joyce, P. G. (2013). Public budgeting systems. Burlington, MA: Jones & Bartlett Learning.
Wiley (2017). Wiley cpaexcel exam review April 2017 study guide: Financial accounting and reporting. John Wiley & Sons Inc.
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