Every government in the world has to account for the use of the funds by the various sectors. The financial information has to be recorded, analyzed, and classified according to its need and urgency in the governmental operations. Measurement focus in government accounting is whereby a financial statement reports all inflow, balances, and outflows in the governmental funds in its net position. Measurement focus in accounting for the government's income and expenditure could target the holistic government economics. Management focus could be economic resources or current financial resources. Current financial resources deal with the near-term and current reports while the economic resources deal with the holistic government financial reports (Bragg, 2017).
Government funds can be accounted on different bases. The different bases of accounting are due to the different nature and purposes of the use and allocation of government funds. Some of the bases of accounting are accrual basis, modified accrual basis, and the cash basis. Accrual basis takes account of all the financial records that are consequential in their periods of recording an economic occurrence. Modified accrual basis is used together with the current financial resources to manipulate the accrual reports. For instance, the revenues are only filed after they have been realized. Cash basis is the record of the revenues that have been received in cash and the expenditures that have been given out as cash (Bragg, 2017).
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The traditional rationale of government used is the cash basis. The cash basis of accounting makes it easier for the monitoring of funds by the government. Cleary, the cash basis accounting provides a list of the sources of revenue and the exact money earned from them. It also includes a list of all the expenditures in a given period, stating the precise amount of money used for that. Traditionally, cash basis was the most accessible form of accounting governments would use. Modernism in accounting has brought about the budgetary formats and the accrual bases (Bragg, 2017).
References
Bragg, S. (2017, April 2). Governmental Accounting . Retrieved from https://www.accountingtools.com/articles/governmental-accounting.html
