Three Major Concepts in Governmental Accounting Theory.

Abstract A study of the development and progress of governmental accounting theory in the U.S. indicates that there are three important concepts upon which it is based. These concepts are fund accounting, accrual accounting and budgetary accounting. Almost without exception, when individuals or organizations consider governmental accounting theory, their consideration centers around one or more of these concepts. In as much as these three concepts have such an important position in governmental accounting, it would seem to be worth while to look at them more carefully. As additional control becomes desirable, accounting theory must be considering constantly the ways and means by which accounting practice can be changed in order to provide better control. Before intelligent changes can be proposed, the present technique used in governmental accounting must be thoroughly understood. The purposes of this study are to present some ideas about the theory of governmental accounting and to provoke additional discussion out of which understanding may be advanced.