Abstract Sound budgeting, sound accounting and sound auditing are important for any governmental or institutional accounting. Governmental and institutional accounting deals with the principles and practices of accounting in connection with groups of people in society who are united in non-profit undertakings for the purpose of rendering services of particular kinds to their groups specifically and to society generally. The principal accounting problems of governments and institutions include accounting for revenues in accordance with restrictions placed thereon by legislative bodies, donors or governing boards, accounting for the appropriation, encumbrance and accrual of expenditure items in each of various funds. Many municipalities in the U.S., particularly the smaller ones, are finding it impractical to accrue revenue items and, hence, are accounting for revenues on a cash basis. Many problems relating to system installation, internal accounting control, external auditing, etc. have not been solved by governmental and institutional bodies in a manner acceptable to accountants generally.
Oscar Severine Nelson (Sun,) studied this question.