The governmental accounting differs from the financial commercial

accounting in many aspects. We will mention some of these differences.

1-The governmental accounting has no final account. They do not aim at
either loss or profit. They are revenues lists either automatic or
continuous from the finance ministry. They are balanced according to
commercial sections, groups and kinds. Moreover, there are no asset
accounts as in the commercial accounts. The asset accounts of the
governmental bodies are recorded in the statistic books and not the
books whose values are in book groups. Despite the fact that the
situation differs from the theory of units (Seif s Original
Budget), the cash accounts are accumulated to all the assets of the
governmental accounting unit. It is posted from a year to another.
Moreover, it displays all the assets of the governmental accounting
unit. It is the account that makes these assets as it is previously
shown.
Further, the governmental accounts do not include personal accounts.
Dealings are always paid in cash and not verbal accounts like the
accounts of sales and purchased goods. They are not unreal accounts
like the reputation of a shop or any asset accounts.
1Unlike the financial accounting, in the governmental accounting,
the consumptions are not calculated as part of the facility assets.
The accounts of the governmental accounting do not discriminate
between the capital expanses and the current revenue expenditures. To
safeguard the governmental accounting assets, an annual inventory
should be made by a committee formed by a management decision for this
purpose. Its task is to make an inventory for all the assets of the
government for protecting them from loss and to be sure that they are
registered in records.
Despite being assured of the result through this process, it is not
enough. This is due to the fact that there are many numbers checked by
these committees affirming the correctness of this inventory and the
data available for unbalancing between the actually present assets and
what should exist of these assets.
2The governmental accounting does not distinguish between the
revenue expenditure and the capital one because the expanses of the
governmental accounting are annual and are not related from one year
to another. On the contrary, in the financial accounting, expanses are
related from one year to anther. Likewise, the balance between
revenues and expanses in the governmental accounting does not aim at
calculating the results of the governmental activity. However, the
goal is to achieve a comprehensive balance between revenues and
expanses for a period of a fiscal year. The expanse goal has no
relation with revenues. However, in the theory of units, the situation
is different as there is a kind of close association between expanses
and revenues. In fact, the expanse is a deduction from revenues at the
same quantity and value. The unit deducted from revenues makes
expanses. That is to say, the connection between them is very strong
and close between revenues and expanses in the governmental
accounting. The connection is a comprehensive and not a partial one.
Here is a kind of contradiction; if the connection is a comprehensive
one, there should be a kind of a partial relation. How this can be
achieved if it is based on a partial relation before being a total
one.
3In the governmental accounting, there is no capital as in the
financial accounting. Likewise, there is no protection for the money.
It is a financial control on revenues and expanses of the state. It

does not aim at preserving the entity and the ability of capital.
Moreover, there are no governmental accounting depreciations. This is
due to the fact that it has a non-profit and an intangible goal for
citizens. Purchasing the fixed assets can be considered an expanse.
Therefore, they could not be regarded as depreciations. Consumption
aims at protecting the real value for the institution capital. There
is no capital in the governmental accounting. Accordingly, there are
no depreciations.
In case of the desire to purchase the fixed asset instead of the old
ones, another equal sum should be added to replace it. Unlike the
governmental accounting, the cost accounts in the governmental
accounting are of immense importance in assessing performance. This is
as they are interested in depreciation accounts for defining the costs
for the accurately intangible units.
4Unlike the financial accounting, the governmental accounts do not
depend on the maturity principle. Maturity here may due to either
expanses or revenues. It may be for both of them. It may be for
expanses and revenues. The year-end accounts are closed regardless of
the due expanses or revenues to add them on revenues and expanses.
This is followed in England and the Arab Republic of Egypt.
5The calculation is developed in the financial accounting from
historical cost to the market one. Moreover, it is moved from the
current cost and the use of the standard numbers for the rise of
assets to make a profit in balance sheet. Accordingly, this leads to
the protection of the capital. Likewise, the depreciations are based
on the standard principle for keeping capital and the ability to buy
substitutes for assets in case of depreciation According to many years
of experience estimated for the asset.
The governmental accounting uses the historical cost as it does not
regard preserving capital or achieving the most profit. However, its
goal is to fulfill the services for citizens. Therefore, the principle
is often the use of the historical cost.
6It is agreed that the term in the governmental and the financial
accounting is usually a fiscal year. In the financial accounting, by
the end of the fiscal year, the goal is to make revenues or expanses
as a result of activity. Further, assets or the budget can not be
posted from one year to another. All that is posted from the
governmental accounts are the cash balances (a bank or a fund) in the
state using the cash system, consignment and trust balances in the
state that used the maturity basis in expanses. The term concept in
the governmental accounting is different from that of the financial
accounting. This is despite the fact that both of them agreed that the
term is a fiscal year.
7The governmental accounting system is governed by rules, laws and
principles different from those of systems followed in the financial
accounting. The financial one requires a body corporate independent
from that of owners. However, in the governmental accounts, the
governmental unit is not a body corporate or financial receivables
independent from the state. The revenues and expanses are obtained
from the state. In other words, it does not have an independent body
corporate.
Similarly, the concept of revenues and expanses is different in the
financial accounting from the governmental accounting. In the
governmental accounting, there is no connection between revenues and
expanses. On the other hand, in the financial accounting, the revenue
is balanced with the cost of obtaining this revenue. The reminder is

the profit of the facility. In the governmental accounting, revenue

has no relation with expanse. It is not acceptable to make a clearing
between them. Every one of them is tackled in a separate way. The goal
in the governmental accounting system is to impose a financial and
legal control on the way of analyzing the revenues. The legal
procedures are practiced according to instructions.
The financial, procedural and legal control on expanses should conform
to the regulations and the laws prevailing in the governmental
administrative unit. Furthermore, it is to impose taxes for increasing
the inputs so that they can assess the services to citizens. On the
contrary of the commercial units spent according to resources.
Moreover, they cannot be increased by the issued decisions. They only
can increase the collected cash and not revenues by borrowing a loan
from banks that may have major disadvantages on the corporation
activity.
8The administrative units in the state are divided into units whose
goal is to collect revenues. Moreover, they are divided into other
units combining between collecting revenues and rendering services to
citizens. These phenomena do not exist in the commercial accounting
aiming at achieving the proceeds as much as possible.
Aspects of Similarity and Disparity between the Governmental
Accounting and the Profit-generated Corporations
There are some aspects of similarity between the governmental
accounting and the profit-generated corporations. They are shown as
follows:
1-Both of them use the concept of the double-entry system (this
concept does not exist in Seif s Original Budget)
2Both of them are recorded in journal and posted to the ledger and
the subsidiary ledger. The scientific accounting style in forming
accounting structure does not differ from the governmental accounting
about the commercial accounting. Recording is done in documents of the
general journal and it is posted to ledgers or the subsidiary ledgers.
In addition, results are extracted in budget and the final accounts.
3-

They prepare the balances of the daily and monthly audit.

4They have the same classification operations for accounts either in

revenues or expanses in the private sector accounting manual or the
typical manual or the unified accounting system in the governmental
bodies divided into sections, groups, items and kinds as it is in
Kuwait and Egypt.
5Both of them share the same accounting names as expanses for
furniture, cars and lands. All the accounting terms in the
governmental or the commercial accounting like revenues, expanses and
cash accounts.
6The accounting unit in the governmental body similar to that of the
accounting unit in the commercial accounting. Both of them are parts
of the economic entity. They use money in exchange and revenues. The
financial systems are similar in both of them. Likewise, both of them
use a cost system similar to the purpose of getting unit cost or the
rendered service.
7-

Both of them agree on the concept of the one-year periodical unit

of calculating the business results. This period may differ in the

governmental accounting and the commercial accounting in accordance
with the circumstances of each sector and the state itself. However,
both of them agree that the period aspect is often a year.
8Both of them use money as a calculating unit used in both the
governmental accounting and the commercial accounting. In both of
them, the calculating unit is cash as a means either in the items of
the double-entry books or in the final results. This is despite the
reservation in using the theory of units (Seif s Original
Budget). This is due to the fact that the measuring unit is unit and
not the value. In addition, the measuring tool is the classified unit
and not the cash.