| Accounting is the art of analyzing and interpreting | | | | unit of government at any level, may it be |
| data. It may not be apparent to some but every | | | | federal, state, or local. Governmental accounting is |
| business and every individual uses accounting in | | | | very similar to conventional accounting methods. |
| some form. An individual may knowingly or | | | | Both the governmental and conventional |
| unknowingly use accounting when he evaluates his | | | | accounting methods use the double-entry system |
| financial information and relays the results to | | | | of accounting and journals and ledgers. The object |
| others. Accounting is an indispensable tool in any | | | | of government accounting units is to give service |
| business, may it be small or multi-national. | | | | rather than make profits. Since profit motive |
| The term "accounting" covers many different | | | | cannot be used as a measure of efficiency in |
| types of accounting on the basis of the group or | | | | government units, other control measures must |
| groups served. The following are the types of | | | | be developed. To enhance control, special funds |
| accounting. | | | | accounting is used. Governmental units can use |
| 1. Private or Industrial Accounting: This type of | | | | the services of both private and public accountant |
| accounting refers to accounting activity that is | | | | just as any business entity. |
| limited only to a single firm. A private accountant | | | | 4. Fiduciary Accounting: Fiduciary accounting lies in |
| provides his skills and services to a single | | | | the notion of trust. This type of accounting is |
| employer and receives salary on an | | | | done by a trustee, administrator, executor, or |
| employer-employee basis. The term private is | | | | anyone in a position of trust. His work is to keep |
| applied to the accountant and the accounting | | | | the records and prepares the reports. This may |
| service he renders. The term is used when an | | | | be authorized by or under the jurisdiction of a |
| employer-employee type of relationship exists | | | | court of law. The fiduciary accountant should seek |
| even though the employer is some case is a | | | | out and control all property subject to the estate |
| public corporation. | | | | or trust. The concept of proprietorship that is |
| 2. Public Accounting: Public accounting refers to the | | | | common in the usual types of accounting is |
| accounting service offered by a public accountant | | | | non-existent or greatly modified in fiduciary |
| to the general public. When a practitioner-client | | | | accounting. |
| relationship exists, the accountant is referred to | | | | 5. National Income Accounting: National income |
| as a public accountant. Public accounting is | | | | accounting uses the economic or social concept in |
| considered to be more professional than private | | | | establishing accounting rather than the usual |
| accounting. Both certified and non certified public | | | | business entity concept. The national income |
| accountants can provide public accounting | | | | accounting is responsible in providing the public an |
| services. Certified accountants can be single | | | | estimate of the nation's annual purchasing power. |
| practitioners or by partnership ranging in size from | | | | The GNP or the gross national product is a related |
| two to hundreds of members. The scope of | | | | term, which refers to the total market value of all |
| these accounting firms can include local, national | | | | the goods and services produced by a country |
| and international clientele. | | | | within a given period of time, usually a calendar |
| 3. Governmental Accounting: Governmental | | | | year. |
| accounting refers to accounting for a branch or | | | | |