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Audits of State and Local Governments
book

Audits of State and Local Governments

by Jack F. Georger
April 2018
Intermediate to advanced content levelIntermediate to advanced
272 pages
7h 7m
English
Wiley
Content preview from Audits of State and Local Governments

Chapter 2 MEASUREMENT FOCUS AND BASIS OF ACCOUNTING

LEARNING OBJECTIVES

After completing this chapter, you should be able to do the following:

  • Differentiate the two measurement focuses used by governments.
  • Differentiate the two bases of accounting used by governments.
  • Recognize special terminology used to account for certain items and transactions.

JUST WHAT IS IT THAT YOU WANT TO MEASURE?

As it turns out this is an important question in governmental accounting. The same transaction can be reported differently by different funds. What and when a fund records certain transactions all depends on the fund's operating objective. It all comes down to what measurement focus and basis of accounting is being used.

Measurement Focus and Basis of Accounting

Governmental funds are used to account for the general activities of the government financed primarily by taxes and grants. Proprietary funds are used to account for the business-type activities financed primarily by a user fee. The activities and operating objectives of these two fund categories are different, and therefore their reporting objectives are different. The two types of fund categories use different measurement focuses and bases of accounting.

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Publisher Resources

ISBN: 9781119508090Purchase book