Compare and Contrast the Main Features of 'Fund Accounting' and of 'Accrual

question 10

Essay

Compare and contrast the main features of 'fund accounting' and of 'accrual accounting' as they apply to the government (or public)sector of the economy.

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Definitions:

Fixed Costs

Expenses that do not change with the level of production or sales in the short term, such as rent, salaries, and insurance.

Variable Costs

Costs that vary directly with the level of production or sales, such as materials and labor.

Corporate Tax Rate

The percentage of a corporation's profits that is paid to the government as tax.

Recession

A significant decline in economic activity spread across the economy, lasting more than a few months, typically visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.