Governmental Accounting

Introduction

Accounting is process of communication of financial information of the business entity to users such as shareholders and managers. Communication is usually in form of financial statements showing in monetary terms economic resources controlled by management, art is in selecting information that is relevant to user and is reliable.

History of governmental accounting

Early accounts served mainly to help memory of businessman and public account was owner or manager of register alone. Crudest forms of accounting were inadequate to problems created by the business entity that involve multiple investors, so double-entry bookkeeping first appeared in northern Italy in 14th century, which began commercial enterprises require more capital than one person was able to invest. Development corporations created for the wider audience for accounts, as investors no firsthand knowledge of its operations are based on accounts to provide necessary information. This development led to the division accounting systems of residence (i.e., management accounting) and external (ie, financial accounting), effects, and also later in accounting and disclosure regulations and growing need for independent certification of accounts by external auditors (Baker et al, 801-815).

Governmental accounting's importance

Accounting is the branch of mathematical science is useful in discovering causes of success and failure in business. Accounting principles applicable to business entities in three divisions of practical art, bookkeeping accounting called and audit. Accounting is defined by American Institute of CPAs (AICPA) as “art of recording, classifying and summarizing in the significant way and in money, transactions and events that are at least partly financial, and interpretation of results of it. "Accounting is thousands of years before accounting notes, which date back over 7,000 years, were found in Middle East. people of that time was based on primitive accounting methods to track growth of crops and herds. Accounting evolved, improving and advancing years and advanced to businesses (Baker et al, 801-815).

Commercial and Governmental Accounting

Today, accounting is called “language of business" because it is vehicle for presentation of financial information on the business entity to many different groups of people. Accounting focuses on informing people in business entity is called management accounting and is used to provide information to employees, managers, owners, managers and auditors. Management accounting is primarily to provide the basis for making management decisions or performance. Accounting provides information to people outside business entity is called financial accounting and provides information to current and potential shareholders, creditors such as banks or suppliers, financial analysts, economists and government agencies. Because these users have different needs, presentation of financial accounts is highly structured and subject to many rules over management accounting. Body of rules governing financial accounting is called generally accepted accounting principles, or GAAP (www.gasb.org).

Word "counter" is derived from French word Compter, which originated in Latin word Computare. Word was written before in English as "Accountant", but over time word, which has always ruled by dropping "p", gradually became so changed in pronunciation and spelling in present form.

First accounting records have been found among ruins of ancient Babylon, Assyria and Sumer, dating back over 7,000 ...