Which accounting tracks the expenditure of Government funds?

Which accounting tracks the expenditure of Government funds?

• A. Financial
• B. Budgetary
• C. Managerial
• D. Cost

Answer: (B)

Budgetary accounting is the method that tracks how government funds are spent against the legally approved budget. It records appropriations, allotments, and actual outlays, and uses encumbrances to monitor spending before obligations are fulfilled. This focus on budget authority and adherence to the approved plan provides the explicit control and accountability needed for public funds. Financial accounting, in contrast, looks at the overall financial position and results for external reporting; managerial accounting and cost accounting emphasize internal decision-making and cost analysis rather than oversight of the budget.

Budgetary accounting is the method that tracks how government funds are spent against the legally approved budget. It records appropriations, allotments, and actual outlays, and uses encumbrances to monitor spending before obligations are fulfilled. This focus on budget authority and adherence to the approved plan provides the explicit control and accountability needed for public funds. Financial accounting, in contrast, looks at the overall financial position and results for external reporting; managerial accounting and cost accounting emphasize internal decision-making and cost analysis rather than oversight of the budget.