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Acct 423: Accounting For Government Agencies Question Paper
Acct 423: Accounting For Government Agencies
Course:Bachelor Of Commerce
Institution: Kabarak University question papers
Exam Year:2010
COURSE CODE: ACCT 423
COURSE TITLE: ACCOUNTING FOR
GOVERNMENT AGENCIES
STREAM: Y4S2
DAY: TUESDAY
TIME: 9:00 – 11:00 A.M.
DATE: 08/12/2009
Instructions
Answer Question one and any other Two Questions
QUESTION ONE
(a) Discuss the benefits of preparing public sector accounts. (5mks)
(b) Differentiate between government cashbook and other cash books for profit making
organizations. (3mks)
(c) Briefly explain five main provisions of State Corporations Act CAP 446 (5mks)
(d) Explain briefly the meaning of the terms listed below in relation to Government
accounting:
(i) The Exchequer account (1mk)
(ii) The General account of vote (1mk)
(iii)The Paymaster General (1mk)
(iv)Appropriations in Aid (1mk)
(e) Recently International Public Sector Accounting Standards have been introduced to
provide guidelines in accounting for the public sector.
Required: Discuss the framework of International Public Sector Accounting
Standards (IPSAS)
(f) ABC Retirement Benefit Scheme has provided you with the following extract of the
trial balance for the year ended 31 October 2002.
Sh. ‘000’ Sh. ‘000’
Accumulate fund as at 1 November 461,560
Accrued expenses 240
Administration expenses 2,840
Cash and demand deposits 23,460
Change value of investments 22,640
Lump sum retirement benefits 4,820
Contributions due in 30 days 4,940
Normal contributions by:
Employer 36,480
Employees 18,240
Transfer in from other schemes 3,150
Transfers out to other schemes 1,860
Investment income 47,400
Immovable property 132,320
Government securities (long-term) 263,605
Members’ voluntary contributions 4,560
Pension 7,640
Equity investments: Quoted 87,835
Unquoted 19,900
Unpaid benefits 320
571,950 571,950Page 3 of Page 4
Required:
(i) Statement of changes in net assets for the year ended 31 October 2002. (7mks)
(ii) Statement of net assets as at 31 October 2002. (6mks)
QUESTION TWO
(a) With specific reference to government sector accounting, briefly explain the
following concepts:
(i) Budgetary accounting (2mks)
(ii) Cash accounting (2mks)
(iii) Commitment accounting (2mks)
(iv) Fund accounting (2mks)
(v) Modified accrual accounting (2mks)
(vi) Lapsing encumbrance (1mk)
(vii)Non lapsing encumbrance (1mk)
(b) List three arguments for and against the accrual basis of accounting in the public
sector. (8mks)
(Total: 20 marks)
QUESTION THREE
(a) The estimates and expenditure details relating to the Ministry of Social Services as at
30 June 2002 were as follows:
Original Actual
estimates expenditure
Sh. ‘000’ Sh. ‘000’
000 – Personal emoluments 160,000 180,000
050 – House allowances 30,000 26,000
080 – Passages and leave 10,000 9,000
110 – Traveling expenses 44,000 46,000
140 – Electricity and water 12,000 13,000
220 – Purchase of plant and equipment 100,000 80,000
650 – Appropriation in Aid 30,000 24,000
Supplementary estimates authorized during the year were as follows:
000 – Personal emoluments (increase) Sh. 16,000,000
110 – Traveling expenses (reduced) Sh. 4,000,000Page 4 of Page 4
Required:
a) Appropriation account for the year ended 30 June 2002. Showing the net surplus to be
surrendered to the Exchequer.
b) Prepare government ledger accounts.
c) Statement of financial position.
(Total: 20 marks)
QUESTION FOUR
(a) Briefly explain the following terms in relation to government accounting:
(i) Exchequer over issues (2mks)
(ii) Paymaster General (3mks)
(iii) Proprietary funds (2mks)
(iv) Fiduciary funds (3mks)
(b) One of the key differences between non-profit making and commercial organizations
is that they have different reasons for their existence. Consequently, non-profit
making organizations follow some accounting principles which differ from those
followed by commercial organizations.
Required:
Briefly discuss the role of accountants in both types of organizations. (5mks)
(c) Explain the different types of employment benefits as provided for by international
Accounting Standard 19 (IAS 19). (5mks)
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