States and federal government’s should all use cash accounting. Governments are so different when it comes to the private sector. They tax the public and use the money to fund public services. They are not trying to make money or impress investors. Cash accounting would show the public the financial state of the government in a way that everyone can understand.
I do not believe the United States should switch from accrual accounting to cash accounting. The US has used the accrual method since the 1910s and it is typically used for governments and large corporations. I believe this method is far more fitting than cash accounting because of the complexity.
I do not think that the United States' states and federal governments should switch from accrual accounting to cash accounting. I think that they should remain with accrual accounting since it is more beneficial for their efficiency and goals. I also think that switching to cash accounting can be troublesome.
To clarify which method is appropriate, we must firstly define what these method are serving for.
Accrual accounting and cash accounting are both serve to establish the financial statement. The financial statement itself serve a lot of concerned parties, such as: managers, authorities, investors. Therefore, the financial statement must report exactly, adequately, punctually every transaction and related financial processes.
Accrual accounting method does not reflect apparently the real amount of cash that a company has transferred or received. However, it record accurately the nature of a transaction in term of time: past, present, future.
Despite the fact that cash accounting method show how the cash move in a company's financial system, it can record the true nature of a transaction.
Accordingly, in a financial statement, both methods are used to supply an adequate and accurate information for involved parties: balance sheet is always go with cash flow statement
I don't know how this would even be done.Cash counting isn't something that is going to be even possible in this case. The man power alone would crush any benefit of this,unless you could automate it and have a very accurate success rate. I think the system is fine the way it is.