The article explores the concepts of budget, expenses, and expenditures, compares them, and explains how math can be applied to politics. Moreover, the author states the difference between expenses and costs, pointing out that the latter one is also responsible for managing finances. Multiple governments create budgets based on funds accounts, which enables them to claim a balanced budget. In addition, the author viewed how Chicago and New York’s budgetary reports were delivered and emphasized that Chicago has a governmental debt. Besides, the GAAP program was the source of problems for both cities since it could not balance the budget and always resulted in financial losses.
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Illinois senators’ attempts resulted in the passage of the “Truth in Budgeting Act” to address the problem of governmental fund accounting, which resulted in the exclusion of full pensions aiming to balance the budget. The main issue is that financial reporting is a vital mechanism that helps residents keep their governmental accountability safe. Therefore, policymakers need to transfer from cash to accrual accounting, which may provide a perfectly balanced budget. This topic seems essential for accounting due to its importance in balancing the budget. Moreover, accrual-based accountability is a source for the funds’ stable functioning and helps to prevent governments from debts.
I found all the author’s notes topical and completely shared his views. Primarily, I agree that the models suggested need thorough elaboration because people need to secure funds. What is more, I support the author’s opinion that financial accounting must become accrual-based; otherwise, it may become corrupted. Finally, I agree with the author’s standpoint on the further creation of an accrual-based system in order to avoid enormous governmental debts.
Bergman, B., & Weinberg, S. (2018). A Valuable Opportunity to Improve Government Accounting—and Accountability. The CPA Journal, 26–27. Web.