How does accounting for governmental entities differ from accounting for the private sector?

In addition to previous comments, main differences are: 1.
(Full) Accrual based accounting in Private Sector and Cash based accounting in Government Sector 2.
Private Sector is profit driven whereas Government sector is Budget driven

All organizations, both in the public and private sector, have to report their periodic activities to their respective stakeholders.
Basic principles of accounting apply in both government and private accounting.
However, these two classifications of accounting differ and have various distinguishing features.
The government is engaged in providing essential services to its citizens and consequently the focus of government accounting is basically the receipts, transfer and deposition of public funds.
On the other hand, the private sector endeavors to maximize profits and hence its accounting focuses entirely on operating results and the financial position of the business.
Government sources funds mainly from various taxes to be able to meet the cost of providing basic services.
If the revenues obtained exceed expenditure, government does not report this as net profit.
Thus, a government financial report is a tool that ensures accountability and transparency in its operations.
Conversely, in private accounting, a return on invested capital is computed by comparing income with expenses.
This is reported as net profit or net income in the statements.
As the government furnishes services to the public, it is involved in various dissimilar operations.
This necessitates the creation of an isolated fund for each distinct operation.
Government accounting maintains a number of independent sets of accounts for each of these funds.
A fund is an independent accounting entity with a self-balancing set of accounts .In contrast, private firms maintain a single set of accounts for all their transactions since they are engaged in interrelated operations.
Government expenditure is usually authorized by a legislative body, e.g., Congress.
The governmental unit must maintain budgetary accounts to reflect the authorization for expenditures and if the monies were spent for the intended purposes.
Any cost will be classified as direct allowable, direct unallowable, indirect allowable, or indirect unallowable.
However, private firms report their operations by preparing an income statement to show the operating income and a balance sheet to reflect the financial position.

The difference between the governmental accounting and financial accounting 1 - Goal - Financial accounting: bother statement result of the profit and loss and determine the financial position at the end of the financial period - Governmental Accounting: aims to impose financial and legal control on state revenues and expenditures 2 - accounting unit - Financial Accounting: accounting unit here is an independent legal personality of the company - Governmental Accounting: Accounting unit of government units is financial dependence 3 - The difference between or resource expenses and capital expenditure - Financial Accounting: differentiate between expenses or resource and capital expenditure where the processing method differs Each has special handling - Governmental Accounting: do not differentiate between expenses or resource and capital expenditure where they all closed in the final account 4 - Depreciation Financial Accounting: calculates depreciation of fixed assets GAO: Do not follow the principle of depreciation of fixed assets because it does not differentiate mainly between or resource expenditure and capital expenditure 5 - Inventory and inventory adjustments - Financial Accounting : focus on inventory and inventory adjustments to know the truth about the entity's financial position at a given moment - Governmental Accounting: Not for inventory and inventory adjustments on the calculator government and its meaning becomes an administrative and regulatory framework to verify the integrity of the assets 6 - Result accounts Financial Accounting: The trading account and the profit and loss account GAO: There is one result of account is the final account

Macro Accounting: Macro accounting deals with national statistics and economic indicators such as a nation's gross domestic product, external debt and so on.
These figures are released on a periodic basis, usually monthly or quarterly by government bodies.
They are closely watched by financial market participants to assess a nation's economic performance.
Micro Accounting As conventional accounting is more like micro accounting than macro accounting (which is closer to economics), most accounting professionals are employed in micro accounting.
As a result, the number of accounting positions at the individual enterprise level also vastly outnumbers those at the macro level.
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