Income Statement For Government Accounting

Single step income statement.

Income statement for government accounting. By calling the income statement the statement of activities the governmental accounting standards setters have sent a clear message. Government accounting manual gam for national government agencies volume i accounting policies guidelines and procedures and illustrative accounting entries table of contents annex no. This approach to accounting is used by all types of government entities including federal state county municipal and special purpose entities. It tracks the flow of revenue and resources in and out of each fund.

Expenses all costs that. The government financial statements usually include a statement of activities similar to an income statement in the private sector a balance sheet and often some type of reconciliation. As you can see this example income statement is a single step statement because it only lists expenses in one main category. The statement of revenues expenditures and changes in fund balance is the income statement for government funds.

Income statement is an important financial statement that summarizes the operating results of the business by matching the revenue earned and expenses incurred to earn that revenue during a particular period of time the revenue and expense figures used for the preparation of income statement are directly taken from the adjusted trial balance if revenue exceeds the total expenses the income. Fund accounting is typically not a topic enjoyed by people who are used to the concepts of for profit accounting. It lists the revenues and expenses in three categories. Government financial statements are annual financial statements or reports for the year.

Governments exist not to generate income but to produce. Financial reporting accounting for government grants by robert kirk example performance model on 1 january 2015 virginia ltd received 1 000 000 from the government as an incentive to establish and operate a manufacturing plant in a particular depressed industrial zone. Referred to as deferred income. A statement of financial position 327 a 1 statement of financial position detailed 328 b statement of financial performance 343.

The financial statements in contrast to budget present the revenue collected and amounts spent. Governmental accounting maintains tight control over resources while also compartmentalizing activities into different funds in order to clarify how resources are being directed at various programs. Here is an example of how to prepare an income statement from paul s adjusted trial balance in our earlier accounting cycle examples.