This classification is based on the purpose for which an analyst computes these ratios. For easy understanding and to achieve the purpose of ratios effectively, ratios may be classified as:- 1. Profitability Ratios 2. Coverage Ratios 3. Turnover Ratios/Activity Ratio 4. Financial Ratios/Liquidity Ratio 5. Leverage Ratios/Long-Term Solvency Ratios. These are discussed one by one below: 1. Profitability Ratios: The [...]
In this article we will discuss about how the accounting for state and local governments is done. Introduction to the Accounting for State and Local Governments: In the United States, literally thousands of state and local government reporting entities touch the lives of the citizenry on a daily basis. In addition to the federal and 50 state governments, there are [...]
The unique aspects of the accounting process utilized within the governmental funds are the General Fund, Special Revenue Funds, Capital Projects Funds, Debt Service Funds, and Permanent Funds. It is in these funds where the distinct approach of governmental accounting can best be seen. Because of the dual nature of the reporting process, much of this accounting must be demonstrated [...]