Public Sector Accounting Essay Example | Topics and Well Written Essays - 750 words

Public Sector Accounting - Essay Example The financial information is presents the comparative past informations and budgets expectation for future years in available form hence a foundation for budgeting. The ability to separately present the financial information of donor and those of the municipality enhances the decision making of those who provide funds to review the operations involved and how their funds were utilized thereby providing them with better information for decision making. Those charged with governance of Yorba Linda are not only responsible for the inflow and outflow of cash, but also the resources and obligations to which they are in charge of. In accrual accounting, the information obtained provides a better measure for evaluating performance as it enables those charged with governance to evaluate their performance of service against the full costs of providing such services. This improves accountability as compared to fund accounting in which those charge with governance are only accountable to those which the government requires. For example, assets administered by the municipal on behalf of the central government may not appear in the federal accounts. Yorba Linda municipality has significant assets and liabilities under which they manage and through accrual accounting which requires disclosure of material financial information which enhances fiscal transparency and accountability (JONES, 2011). Compared to fund accounting that segregates the funds into different categories, accrual accounting requires full financial statements that are interrelated to one another. This provides an integrated view of the municipality and provides better information for decision making. Accrual accounting will include information of non-cash transactions of the municipality such as creation and settlement of liabilities including payments due thus show the true