Concept explainers
Governmental budgeting and budgetary control are deemed so important by the GASB that it devotes an entire principle to the subject. Why?
Explain the reason why the governmental budgeting and budgetary control are deemed so important by the Governmental Accounting Standards Board (GASB).
Explanation of Solution
Explain the reason why the governmental budgeting and budgetary control are deemed so important by the Governmental Accounting Standards Board (GASB) as follows:
Naturally, a government must attempt to provide as many goods and services when it faces the unlimited demand rather than stable or fixed revenue. Hence, the government should set priorities and plan carefully in order to allocate their scarce resources and control their application of scarce resource. Government should evaluate the result of their operations from both of legality and efficiency and effectiveness. The budgetary process is a principle by which the governmental activities are planned, controlled and evaluated.
Want to see more full solutions like this?
Chapter 3 Solutions
Governmental and Nonprofit Accounting (11th Edition)
Additional Business Textbook Solutions
Fundamentals of Cost Accounting
Financial Accounting (11th Edition)
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
Financial Accounting: Information for Decisions
Fundamentals of Financial Accounting
Horngren's Accounting (11th Edition)
- It is proper budgeting procedure to begin with estimated revenues, but why might some nonprofit entities begin planning their expenditures instead of their revenues?arrow_forwardWhich of the financial budgets is the most important? Why?arrow_forward5) Why may flexible budgets be more important to a government's business type activities than to its governmental activities/arrow_forward
- 8. All of the following are requirements unique to a government entity. Which is not? Group of answer choices Accrual basis of accounting Fund cluster accounting Incorporating budgetary controls in the financial reporting system Presenting budget information in the financial statementsarrow_forwardOn what do the government-wide financial statements report? Multiple Choice Operational accountability. Fiscal accountability. The cost of government services. Budgetary compliance.arrow_forwardExplain the budgetary process providing practical examples. This is in terms of Government Accounting.arrow_forward
- The cornerstone of external financial reporting for governmental units and not-for-profit organizations is: a. to show the flow of financial resources b. to determine profit or loss c. to compare budgeted to actual resources d. accountabilityarrow_forwardWhat are your thoughts on the misappropriation of funds? Government budgets prevent public officials from spending outside their budgetary authority, and the increased importance of budgets is reflected in government financial reports by a required report comparing budgeted and actual amounts.arrow_forwardExplain to a nonfinancial audience explaining how increasing scrutiny and demand for accountability by the public has influenced reporting for governmental entities. Explain why governments use fund accounting. Analyze the importance of budget and control of government resources. Explain how the GASB revenue and expense recognition model may improve the usefulness of the information governments report to the public. Format references according to APA guidelines.arrow_forward
- What is the difference between forecasting and budgeting? Provide examples. Who funds law enforcement agencies? What are some possible new sources of funding for a police department, a municipal court, and a state prison?arrow_forward125) Which of the following is an internal financial control? A) Budgeting b) Goal setting c) An audit conducted by KPMG d) A and B e) A and B and Carrow_forwardTRUE OR FALSE. Please provide an explanation if false. 1. Technically, only the Journals and Ledgers are considered accounting records; the Registries are budget records. 2. Separate accounting records and budget registries are maintained for each fund cluster. 3. Government entities and business entities use term "obligation" or the phrase "incurrence of obligation" similarly. 4. The various registries maintained by government entities primarily serve as internal control for controlling and monitoring the conformance of actual results with the approved budget. 5. A check disbursement is normally recorded as a credit to the "Cash-Modified Disbursement System (MDS), Regular" account. 6. Both the ORS and RAOD are updated each time an obligation is incurred, a payable is recorded for the obligation incurred, and disbursements are made to settle the recorded payable 7. At the end of each year, an adjustment is made to revert…arrow_forward
- Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax CollegePrinciples of Cost AccountingAccountingISBN:9781305087408Author:Edward J. Vanderbeck, Maria R. MitchellPublisher:Cengage Learning