Features of Government Accounting

Features of Government Accounting

Government Accounting is a unique application area which has certain characteristics of its own. Some of the 
main features of Government Accounting are discussed as under:

1. Specific system of accounting: It is a specific accounting system which is followed by government in its 
departments, offices and institutions.
2. Reporting of utilisation of public funds: The government and its institutions are public institution whose 
main objective is to provide services to the society and also to maintain law and order in the country. So, the 
accounting system used by such institutions has to reveal how public funds and properties have been used 
for that purpose. It is to be noted that government accounting is not done for revealing any profit and loss.
3. Government Regulations: Government accounting is maintained according to government rules and
regulations. The financial policies, rules and regulations as determined from time to time provide the system
of government accounting.
4. Double Entry System: Government accounting is based on the principles and assumptions of double entry
system of book keeping system. Accordingly, every financial transactionentered into by a government/
government office/ institution are recorded showing their double effects. It implies that for each government
financial transaction one aspect of the transaction is debited and the other aspect is credited.
5. Budget Heads: All the expenses of government offices are classified into different budget heads and
expenditures are made only on approved budget heads.
6. Budgetary Regulation: Government expenditures are governed by budgetary regulations. In other words,
no government office can make expenditure more than the amount allocated in the budget. Thus, in effect,
government accounting gets regulated by the budget.
7. Mode of Transaction: All government transactions are supposed to be performed through banks.
8. Fund-based Accounting: Apeculiar characteristic of governmental accounting is the employment of
separate funds. The government is engaged in an ever-growing number of operations and activities which
are quite unrelated to each other. The particular sources of revenue or income often are dedicated to use for
a particular phase of the government’s operations. The accounts must segregate these specially dedicated
resources and isolate them from all other transactions in a separate “fund.”
9. Auditing: The audit the books of accounts maintained by government departments, offices or institutions
are to be audited by a recognised department of the government so as to ensure proper governance and also
to prevent misuse and misappropriation of public funds.

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