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CAMERAL ACCOUNTING- A NEW PATH OF ACCOUNING

ITRODUCTION-Ijiri (1967) focuses on two other dimensions of the double-entry bookkeeping methodthan the dual result presentation (via the payment and activity sides): the essence of double-entry is that every increment is causally related to a decrement, and the significantcontribution of double-entry over single-entry is that the present financial status of a firmis fully accounted for by past events. At a given date, the assets and liabilities describe the present position of an enterprise, and the capital accounts, including income(performance result), can be seen as a summary of past events. If past events have been properly accounted for, then the cumulative past should equal the present. In single-entry bookkeeping the present status is represented by a list of assets and liabilities, but double-entry compels an accounting of the present by an appropriate set of capital accounts thatcaptures the past events that led to the present position. Thus, according to Kamaccountability is the essence of double-entry.

Historical development of cameral accounting

Walb points out that the development of cameral accounting can be divided into four different phases, and in general terms he argues that the development of cameralaccounting parallels that of commercial accounting, namely the development of a controlinstrument, the preparation of accounting information for statistical purposes and the preparation of an income statement, showing the performance result.

The first phase

referred to as

simple cameral bookkeeping

, consists of showing balance sheet changes for money and moveable property and possibly also an overviewof fixed property, as well as a grouping of the revenues and expenditures according totheir sources . According to Wysocki (1965) one has presumably been satisfied withshowing the money revenues and money expenditures in a daybook, where the revenuesand expenditures were reported chronologically, without taking into account their different characters. According to Johns (1951) it was possible gradually to extend thischronological bookkeeping in the daybook to a systematic bookkeeping in the ledger,although systematic use of the accounts were lacking. Attempts to introduce themerchant's double-entry bookkeeping method (commercial accounting) in thegovernmental sector, however, failed.

In the second phase

introduction of current due accounting

, a strong link between bookkeeping of the cash transactions in the chronologically kept daybook and thesystematic bookkeeping in the ledger was introduced. Moreover, within the systematic bookkeeping, one developed any typical form of the cameral ledger accounts, which later came to determine the cameral bookkeeping method (Wysocki, 1965). The point of departure for the considerations in this phase was the attempt not only to include alreadyrealized revenues and expenditures (cash or «actuals» accounting), but also the future

revenues and expenditures . The ledger prepared in this way already contained important parts for the preparation of a balance sheet containing claims and obligations as well asan income statement (profit and loss statement), showing a performance result (Wysocki,1965). When it is a matter of the application areas of cameral accounting, Wysocki points out that it may be maintained that the cameralist's single-entry bookkeepingmethod is far better than the merchant's double-entry bookkeeping method with regard toadjusting to changes, because the latter method is based upon a very strict procedure for bookkeeping the transactions and for closing the accounts. It is therefore understandablethat the shaping of cameral accounts is manifold compared to the commercial accounts(Wysocki, 1965, p. 1 Enterprise cameralistics has developed the systematic single-entry bookkeeping method of commercial accounting. As pointed out earlier in the article, thelatter method allows for the preparation of the performance result via the payment side(balance sheet), and therefore forms the basis of modified financial accounts with anelement of a performance result. When using the former method, however, which I refer to as the

systematic single-entry bookkeeping method of enterprise cameralistics,

the performance result is not only reported via the payment side (balance sheet). It alsoappears via the activity side (the profit and loss account), like it does when using themerchant's double entry-bookkeeping method. Therefore, the systematic single-entry bookkeeping method of enterprise cameralistics forms the basis of

modified financial accounts/performance accounts

Administrative and enterprise cameralistics

Today there exist two main groups of cameral accounting, which both use the cameralaccount . Historically (first phase from ca. 1500), cameral accounting was developed for the governmental core administration (

administrative cameralistics

), and the mainobjective of this form is to contribute to the control of public (tax) revenues within thefinancial limits of a politically adopted budget (budgetary control). Moreover, controllingthat no money is received or paid without a previous payment instruction is also animportant objective of administrative cameralistics (payment control). Later, from about1910 (fourth phase), administrative cameralistics was developed to

enterprisecameralistics

for use in governmental enterprises. The purpose of the latter form is to provide precisely the same type of information as the one prepared by using themerchant's double-entry bookkeeping method and the merchant's double-sided accounts(debit and credit sides), namely the preparation of performance accounts in the form anincome statement (profit and loss account) and an integrated comprehensive balancesheet (balance account).Administrative cameralistics has developed the single-entry bookkeeping method of commercial accounting. While the latter method forms the basis of financial accounts(see Figure 1), showing immediate cash inflows and outflows, the former method, whichI refer to as the

single-entry bookkeeping method of administrative cameralistics

, formsthe basis of

financial accounts

(see Figure 2), showing total revenues and expenditures(i.e., immediate cash inflows and outflows and later cash inflows (accounts receivable)and later cash outflows (liabilities)).Using cameral accounting in governmental organizations, if one wants primarily to focuson the financial effect of the revenues and expenditures. This is due to the fact that thecameralist's bookkeeping methods use the principle of single-entry bookkeeping, which isa principle forming the basis of financial accounts. On the other hand, if it turns out thatthe primary focus in governmental organizations should be the performance effect of therevenues and expenditures, one should consider using commercial accounting in thegovernmental sector. The reason for this argument is the fact that commercial accounting,using the merchant's double-entry bookkeeping method, forms the basis of performanceaccounts.ReferencesLee, T.A. (1986),

Towards a Theory and Practice of Cash Flow Accounting.

New York and London: Garland Publishing, Inc.Monsen, N. and Wallace, W.A. (1995), "Evolving Financial Reporting Practices: AComparative Study of the Nordic Countries' Harmonization Efforts",

Contemporary Accounting Research

, 11 (2), pp. 973-997.Chan, J.L. (2003), "Government Accounting: An Assessment of Theory, Purposes andStandards",

Public Money and Management

.Johns, R. (1951),

Kameralistik. Grundlagen einer erwerbswirtschaftlichen Rechnung im Kameralstil.

Wiesbaden: Betriebswirtschaftlicher Verlag Dr. Th. Gabeler.