What is the distinction between expenditure and expenditure as the terms are used in government accounting?
Expenses relate to government funds, while expenses relate to equity. Expenses are decreases in net financial resources and expenses are decreases in net economic resources. When an asset is acquired, it is generally accepted as an expense. When an asset is consumed, it is generally accepted as an expense.
A government expects to pay its electricity bill for its current fiscal year in the following year. A government official asks if the prepayment should be charged as an expense in the current year or the following year. How would you respond?
The government is expected to record its electric bill as a liability for the following year. When the charge is posted, the budgeted amount for expenses is reduced, while a portion of the unreserved fund balance is reserved for the charge.
Although many governments prepare budgets for both capital projects and debt service funds and incorporate them into their accounts, budgetary control of these funds is not as essential as it is for debt service funds. Other government funds. Do you agree? Explain. If budgets are prepared for capital project funds, how can they differ from those prepared for other funds?
I disagree that budgetary control of capital projects and debt service funds is not as essential as it is for it to be. Other government funds. While budget entries for projects and service funds are designed as an internal control mechanism and do not affect year-end financial statements, it remains important to maintain budget control to prevent expenditures do not exceed the authorities. The budgets prepared for these project funds are very different from those prepared for other funds in that investment project funds are stationary in nature and can often be held for a number of years. years much higher.
How should governments report their capital projects and debt service activities in their whole-of-government returns?
Governments should report their capital projects and debt service activities in their whole-of-government returns as long-term bonds in the form of combined funds that include all other government funds in the government activities column.