NCJ Number
80568
Journal
Journal of Accountancy Volume: 35 Issue: 2 Dated: (February 1923) Pages: 81-94
Date Published
1923
Length
14 pages
Annotation
The purposes of municipal accounting are discussed, so as to develop a method of approach to the solution of municipal accounting problems.
Abstract
Municipal accounting should be an instrument of municipal administration to provide information on cash receipts and disbursements, information for planning and controlling revenues and expenditures, information for judging the efficiency of employees, and information to show profit and loss on certain activities. The effectiveness of accounting in serving municipal administration depends on its being given the proper place in an effective municipal organization. Organization, accounting, and the budget should be coordinated toward the end that the budget will be a statement of future accounts reflecting organization responsibility. The use of accounting in judging efficiency of municipal operations and municipal employees is dependent on correlating accounting and statistical data. Accounting records alone, however, do not usually provide a standard for this purpose because of the absence of the profit-and-loss test in municipal operations. Effective municipal administration and public policy require the preparation and use of comprehensive reports covering municipal operations. These reports should be designed prior to the designing of the accounting system, so that the latter may be constructed with respect to the demands of the former. Further, municipal reports should be designed to answer the questions derived from the administration of the operations upon which they focus. In order to accomplish the foregoing, it is necessary to centralize the city's accounting, statistical, and operating procedures in one executive, usually called the comptroller. (Author summary modified)