Other Form of Name
Chase, Harvey S. (Harvey Stuart), 1861-1946
Document Type
Article
Publication Date
1910
Abstract
My experience among cities both large and small and in various parts of the United States during the last fifteen years has led me to certain conclusions from which I find myself unable to escape, and one of these conclusions bears very closely upon this matter of "Capital" and "Revenue" in municipal accounts. In fact, it appears to me that we do have, and must necessarily have, in city affairs the same distinctions in classes of accounts which are represented by these titles "Capital" and "Revenue" in commercial affairs. It will be found impractical to install sound accounting methods in municipalities, in my opinion, unless these distinctions are recognized, whatever be the titles given to these different classes of accounts. The word "Capital" is not a satisfactory term to apply to municipal accounts. For this reason I have coined and used the word "Non-revenue." The term "Revenue," however, and "Revenue Account," used in very much the same sense as a "Profit and Loss" account is used in commercial affairs, is one of the most essential features of a proper installation of sound methods of accounting in cities. Of this I am fully convinced, and for this reason: While, as the authority I have quoted says, "The question of 'Gain' or 'Profit' finds no proper place in municipal accounts," the question of Surplus or Deficiency of revenue is an exceedingly important item in such accounts. This question, whether or not the revenue pertaining to a fiscal period is in excess of the expenditure which that revenue is supposed to meet, is one of the fundamental questions which a proper system of accounts in a municipality should exhibit, and should exhibit so clearly as to be without question. The corollary of this statement is evident. If the current revenue has not provided for the current running expenses of the city, then borrowed money must be used to supply this deficiency, and such borrowed money can be liquidated only out of future revenues. Thereby such deficiencies of the present become unwarrantable burdens upon the tax-payers of the future.
Relational Format
article
Recommended Citation
Chase, Harvey S., "Budgets and balance sheets: The practical application of sound accounting principles and methods to municipal book-keeping" (1910). Individual and Corporate Publications. 112.
https://egrove.olemiss.edu/acct_corp/112
Comments
Address before the National Municipal League at the Buffalo Meeting, November 14-17, 1910