Post on 03-Jun-2018
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CHAPTER 8
FINANCIAL ACCOUNTINGTECHNIQUES
MAJOR TECHNIQUES IN PUBLICSECTOR ORGANIZATIONS
1 All five techniques canbe implemente alt!"ethe# in!ne !#"ani$ati!n %n!tmutuall& e'clusive(
)*+,-+-),
MAJOR TECHNIQUES IN PUBLICSECTOR ORGANIZATIONS
1 .u"eta#& Acc!untin"
2 Cash Acc!untin"3 Acc#ual Acc!untin"4 C!mmitment Acc!untin"5 Fun Acc!untin"
BUDGETARY ACCOUNTING
Purpose
1 Use t! #ec!# the bu"eta#& infl!/san !utfl!/s estimate !# auth!#i$e in theannual bu"et
Accounts
1 Estimate 0evenues1 Estimate Othe#Financin" S!u#ces
2 App#!p#iati!ns1 Estimate Othe# Financin" Uses3 Encumb#ances
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E
Budget Approved on 1-1-2008
Estimate 0evenues
Estimated Revenues Ledger
Ta'es
Licenses an 2e#mits
Inte#"!ve#nmental 0evenues
Cha#"es f!# Se#vices
Fines an F!#feits
3iscellane!us 0evenues
AppropriationsLedger:
Gene#al G!ve#nment
2ublic Safet&
*452ublic 6!#7s
Cultu#e an 0ec#eati!ns
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E'amples !f .u"eta#& C!nt#!l8C!mmitment Acc!untin"
2#inte# is #eceive !n ,4,54-))91incluin" shippin" cha#"es !f :,58
Entry in GF General Journal8
D
r.
r
.
0ese#ve f!# Encumb#ances;-))9
5
)
)
E'penitu#es;-))9
5,5
Encumb#ances;-))9
5
)
)
5
,
5
*4=
BUDGETARY ACCOUNTING
1 2e#masalahan alam
a7untansi an""a#an8
1 a""#e"ati!n
2
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)*+,-+-),*
BUDGETARY ACCOUNTING
1 .u"et functi!n8
1 Deter!ine t"e revenuesource and allocation o# eac"revenue account.
%e>"8 Ta' 0evenue1
Inte#"!ve#nmental t#ansfe#(>
2 $o di##er so!e pu%licservices. %e>"8H!/ much bu"et/e all!cate t! health epa#tment1c!mpa#e t! the eucati!n ep ? h!/much bu"et /e all!cate t! sala#&1c!mpa#e t! t!!ls1 etc(
BUDGETARY ACCOUNTING
1 A""#e"ati!n8
1 The fallac& 8 N!t all numbe#s sh!/in financial statement sh!/ the t#uemeanin"
2 The numbe#s c!me up f#!m al!t !f /!#7 ivisi!n1 s!me !f /!#7ivisi!n ma& be p#!fitable1 buts!me /!#7 ivisi!n l!ss
3 If /e a#e ma7in" @ust !ne sin"le
bu"et1 /ith !ne sin"le numbe#1 thea""#e"ati!n /ill be a p#!blem
CASH ACCOUNTING
1 Acc!untin" s&stem that!nl& #ec!"ni$e cash infl!/ ancash !utfl!/
1 Cash infl!/ 0evenue2 Cash !utfl!/ E'pense
2 Ientificati!n8
1 Cash fl!/2 T! measu#e an #ec!#1 /e use !nl&
a sin"le cash b!!7 !# t#easu#& b!!7
3 N! balance sheet
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CASH ACCOUNTING
1Avanta"e !f Cash Acc!untin"8
1 Simple2 L!/e# aminist#ati!n c!st
3 Hi"he# #eliabilit&
ACCRUAL ACCOUNTING
1Befiniti!n8
1 &'ecogni(e revenue )"en earned* e+penscost as incurred,
Foundations of Accrual Accounting
Revenue Recognition recognize revenues when
(1)Earned
(2)Realized or RealizableExpense Matching match with corresponding revenues -Product costs
-Period costs
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)*+,-+-),*
CASH ACCOUNTING
1 Bisavanta"e !f cashacc!untin"8
1 Cash fl!/cant be use t!ete#mine
p#esent+pastpe#f!#mance
2 Eas& t! be manipulate
Accruals--Th C!r"rs#!"
Net=
Operating +Accrual
sIncome Cash lo!
Accruals and ash Flows --- M!ths
M!th" #ince compan! value depends on future cashflows$
onl! current cash flows are relevant for valuation%
1" M!th" All cash flows are value relevant%
2" M!th" All accruals accounting ad&ustments arevalue irrelevant%
3" M!th" ash flows cannot be manipulated%4" M!th" All income is manipulated%
5" M!th" 't is impossible to consistentl! manageincome upwards in long run%
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---AccrualsandashFlows (ruths
$ (ruth" Accrual accounting(income)is more
relevant than cash flow%$ (ruth" ash flows are more reliable thanaccruals%$ (ruth" Accrual accounting numbers are sub&ectto
accounting distortions%$ (ruth" ompan! value can be determined b!
usingaccrual accounting numbers%
)*+,-+-),
ase 'llustration -- Facts
1" Establish hospital and invest )*++ e,uit!
2" Purchase infus for ) each$ Fixed costs for tabung o.sigen of )/++
$ 0ariable costs for laboratorium of )+%* perpasien
$ ure 1 patient at )/+ each for cash
$ ure 1 patient at )/+ each on credit
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CashAcc!u"#%"&ase'llustration
#tatement of ashFlows
Receipts
PenerimaanPengobatan
Payments
Pembelian 'nfus
Pembelian 2.sigen
3ia!a laboratorium
(otal pa!ments
4et cash outflow
AccrualAcc!u"#%"&
ase'llustration
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i t y ,
D
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'UND ACCOUNTING
'u"( ) 'u"( * 'u"( +
A , - . ED A , - . ED
A , - .
ED
'u"( / 'u"( 0 'u"( 1
A , - . ED A , - . ED
A , - .
ED
'UND ACCOUNTING
Fun Acc!untin" Equati!n8
ASSET = LIABILITIES + FUND EQUITY
as" AccountingJournal Accrual Accounting
Journal
B#> Cash B#> CashC#> 0evenue C#> 0evenue
B#> E'pense B#> Sala#ies E'pC#> Cash C#> Cash
B#> E'pense B#> T#uc7C#> Cash C#> Cash
B#> Cash B#> Cash
C#> 0evenueC#> 2a&able %A+21 N+21Bebt(
B#> 0ent E'pense B#> 2#epai 0entC#> cash C#> Cash
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)*+,-+-),*
'UND ACCOUNTING
1 %!"pendable #und(
2 %$one"pendable #und(
JOURNAL ENTRIES
CASH 2S ACCRUAL
ACCOUNTING
1 C!llect ta'pa&ment f#!m ta' pa&e#am!unte : =5>)))
2 2a& a publicse#vant sala#& f!# :5>)))
3 2u#chase a t#uc7 f!# : *5>)))
4 .!##!/ m!ne& f#!m I3F : ,->5))
5 2a& builin" #ent f!#- &ea#s am!unte : -)>)))
ED F /AP$E' 8
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