Accountancy, asked by Limon6757, 11 days ago

Point of differtinate government and business

Answers

Answered by yogitasharma65
0

Businesses only generate cash flow if they sell something, either tangible or a service. Generally a profit is built into the asking price. If they sell a lot of goods or services (and are able to collect their fees), they make a lot of money. Governments on the other hand are regulated in the amount of money they can collect for taxes by the electorate. (Sometimes, they also have trouble collecting their fees.) The government is still expected to provide services, but they are usually working with a budget that hamstrings them.

This is particularly true for city governments. If you are wondering why it takes so long for the city to come and fix your problem it's usually because they are understaffed or don't have money in the budget for that area of town yet. Public works projects are usually done in a rolling basis depending on need.

Governments don't EVER generate a profit, they may have a surplus from time to time, but when times get hard that surplus gets used up quickly and then they have to rely on borrowing to have enough money to do what is expected of them. Even in good times governments usually have to sell bonds (debt) for big infrastructure projects. Most of the time governments are just trying to keep their heads above water.

HOPE IT WILL HELP YOU

PLEASE MARK ME AS A BRAINLIST

Similar questions