Government Accounting

Overview of government accounting
Government accounting
Government accounting refers to the different accounting systems that the different entities in the public sector use. Government Accounting Standards Board (GASB) set the accounting standards to be used by the state and local government.
The role of the Governmental Accounting Standards Board (GASB) is to set up and improve the accounting standards of state and local government. It also ensures that financial reporting gives accurate and reliable information to the users. It also educates and guides the public, auditor 's users and issuers of the financial reports.
Comparison of governmental accounting with for-profit financial accounting
Governmental accounting and for-profit financial accounting apply the same basic principles, but there are some characteristics of governmental accounting that make it differ with for-profit financial accounting. These differences include:
The goals
The main goal of the public entity is to ensure that it provides the necessary to its citizens unlike the for-profit entities which have to make a profit to survive. For-profit businesses have to cover the cost of goods or services they provide to give a profit to the shareholders who are the providers of capital. The government gets its revenue from the taxpayers who do not expect profit on the taxes paid, but they expect to be provided with the essential services. When there is excess revenue it is not reported as net profit.
In governmental accounting usually some sources of revenue have no direct relationship with the expenditures. Capital invested by the citizens in terms of taxes is supposed to ensure the provision of public services. In addition, the term "net worth" has a different meaning in a government unit and in a profit making entity.
The usage of the accounting results
The use of the accounting report of the public entity is different from the use in the private sector where the main aim of the entity