Loro, Irish Mae U.
Activity 1.
BSA 3A
How does government accounting differ from the accounting for business entity?
There are numerous distinctions between government accounting and business accounting.
To begin, the primary goal of government accounting is to determine the state of the public
funds. For example, in one project, accounting is used to determine whether the budget has a
surplus or a shortage. On the other hand, business accounting use by an entity to determine the
position of the business and to monitor the profit or loss. On the other hand, business accounting
use by an entity to determine the position of the business and to monitor the profit or loss.
Second, government accounting is strictly enforced by adhering to the government’s financial
rules and provisions while commercial accounting is maintained by adhering to the ‘Generally
Accepted Accounting Principles’. Moreover, government accounting informs the government
about the expenditure and the how they use the funds. In contrast, commercial accounting
informs interested parties such investors creditors, and etc about the company’s operating
results and financial position. Furthermore, in government accounting, the cash basis of
accounting is typically used because a government must first decide on its range of activities
before determining its various sources. The accrual basis of accounting is used in business
accounting to determine the result of an operation by preparing a statement of performance and
to determine the financial position at the end of the year by preparing a Balance Sheet.