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Introduction to Governmental and Not-for-Profit Accounting by IVES,Johnson, Razek, Hosch
Finance & Accounting
Pages 6 (1506 words)
Name- Instructor’s name- Course - Date- A summary of Introduction to Government and Non profit’s accounting by IVES, Johnson, Razek, Hosch Government accounting is a field of accounting catering to the public sector or government. This avant-garde accounting field exists as the objectives and usage of the accounting reports in this sector differ significantly from that of the private (business) sector.
The main objective of a typical business is to earn a profit. Financial statements that zero in on net income are in sync with the target because net income is a measure of how well a business achieved its goals. Businesses also flex their financial muscles to promote the welfare of their employees, executives, shareholders and the community. However, business accounting and reporting are concerned almost exclusively with the goal of maximizing profits or cash flows. The financial reports of governments and not-for-profits also show inflows (revenues) and outflows (expenditures) of cash and resources. An excess of expenditures over revenues show financial distress and poor performance. However, an excess of revenues over expenditures is not necessarily the ultimate goal. To report properly on their outputs and outcomes, governments and not-for-profits must augment their financial statements with nonfinancial data relating to pertaining to their larger mission. E.g.: A school might include statistics on student test scores or graduation rates. A centre for the senile might present data on the number of people fed or adequately housed. ...
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