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Government spending or expenditure includes all government consumption, investment, and transfer payments. [1] [2] In national income accounting, the acquisition by governments of goods and services for current use, to directly satisfy the individual or collective needs of the community, is classed as government final consumption expenditure.
The revenue accounts are divided into subaccounts, including the different types of taxes, social contributions, dividends from the public sector, and royalties from natural resources. Finally, the interest expense account is one of the necessary inputs to estimate the cost of servicing the debt.
Government revenue or national revenue is money received by a government from taxes and non-tax sources to enable it, assuming full resource employment, to undertake non-inflationary public expenditure. Government revenue as well as government spending are components of the government budget and important tools of the government's fiscal policy.
The table summarizes national income on the left (debit, revenue) side and national product on the right (credit, expense) side of a two-column accounting report. Thus the left side gives GDP by the income method, and the right side gives GDP by the expenditure method. The GDP is given on the bottom line of both sides of the report.
The government budget balance, also referred to as the general government balance, [1] public budget balance, or public fiscal balance, is the difference between government revenues and spending. For a government that uses accrual accounting (rather than cash accounting ) the budget balance is calculated using only spending on current ...
Accrual accounting in the public sector is a method to present financial information on government operations. [1]: 45 [2]: 3 Under accrual accounting, income and expenditure transactions are recognized when they occur, regardless of when the associated cash payments are made.
Government accounting refers to the process of recording and the management of all financial transactions incurred by the government which includes its income and expenditures. Various governmental accounting systems are used by various public sector entities.
Instead, accounting and banking practices pertaining to government funds are established in the Public Governance, Performance and Accountability Act 2013. The Act requires that the Commonwealth maintains a central bank account with the Reserve Bank of Australia [ 5 ] known as the Official Public Account (OPA). [ 6 ]