Question
A governments Public Accounts includes both budget and actual amounts in some of its financial statements. Which of the following is the best explanation for
A governments Public Accounts includes both budget and actual amounts in some of its financial statements. Which of the following is the best explanation for this?
It allows financial statement users to hold the government accountable for how its proposed spending compared with how it actually spent its approved budget. | ||
It is a holdover from when governments followed modified cash accounting. | ||
Since actuals and budgets are accounted for on different bases, it provides a means for the financial statement user to reconcile between accrual and modified cash accounting where necessary. | ||
It allows bond rating agencies and potential investors to assess the governments decisions affecting its financial health and economic stability. |
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