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Bac 410: Public Sector Accounting Question Paper

Bac 410: Public Sector Accounting

Course:Bachelor Of Commerce

Institution: Kenyatta University question papers

Exam Year:2011

KENYATTA UNIVERSITY
UNIVERSITY EXAMINATIONS 2010/2011
INSTITUTE OF OPEN LEARNING
EXAMINATION FOR THE DEGREE OF BACHELOR OF BUSINESS ADMINISTRATION
BAC 410: PUBLIC SECTOR ACCOUNTING

DATE: Friday 4th February, 2011

TIME: 4.30 p.m. – 6.30 p.m.
__________________________________________________________________________________
INSTRUCTIONS
1.
Attempt all questions.
2.
Time allowed is TWO hours.
3.
Marks allocated to each question are shown at the end.
4.
Be precise and state any assumptions made.
QUESTION ONE
The following balances were extracted from the books of the government of Kenya for the year ended
30th June 2009.
Government of Kenya
Trial balance as at 30 June 2009

‘000’ Kshs
‘000’ Kshs
General Accounts

Cash
86,814
Accounts receivable
71,968

Allowable for uncollectible Accounts

13,492
Unbilled Accounts receivable
21,000
Accrued interest receivable
200
Due from State Public Works Department
7,000
Inventory of Materials and suppliers
30,000
Prepaid insurance
600
Land
50,000
Buildings
100,000
Accumulated depreciation – Buildings

15,000
Improvements other than building
777,000
Accumulated depreciation

Page 1 of 5

Improvements other than buildings
85,000
Machinery and equipment
200,500

Accumulated Depreciation – Machinery and equipment

56,000
Vouchers payable

49,500
Due to internal Service Fund

12,800
Accrued interest payable

2,000
Accrued Salaries and Wages payables

6,000
Accrued Taxes Payable

7,500
Bonds payables

650,000
Unamortized Premium on Bonds

1,700
Contribution from municipality

400,000
Contribution from subdivides

30,000
Retained earnings
22,510

Operating revenues

321,000
Operating expenses
194,400

Depreciation expenses
36,000

Taxes expenses
18,000

Non operating revenue-Equipment

Rental

7,000
Interest Revenue

1,850
Interest expense
42,850
_______
Subtotal
1,658,842
1,658.842

Restricted or secondary accounts:

Customers’ deposits – cash
978

Customers’ deposits – Investments
10,000
Customers’ deposits – Accrued Interest receivables
200
Customers deposits – Interest Payable

10,973
Customers deposits – Interest Payable

145
Reserve for earnings on Customer’s deposits
_____
60
Subtotal
11,178
11,178
Debt Service Cash
15,000

Debt Service – Accrued Interest payable

6,000
Reserve for Bond Debt service
_____
9,000
Subtotal
15000
15,000
Page 2 of 5

Principal and interest Reserves - Cash
1,300
Principal and interest Reserve – Investments
9,000

Principal and interest Reserve - Accrued

Interest receivable
150

Reserve from bond principle and interest

Payments Guarantee
_____
10,450
Subtotal
10,450
10,450
Contingencies - cash
10,000

Contingencies – Voucher payable

7,000
Reserve from contingencies
_____
3,000
Subtotal
10,000
10,000
Total
1,705,470
1,705,470

Required:
You are required to prepare
a)
i)
Statement of financial position as at 30th June, 2009.

[10 marks]

ii)
Statement of financial performance in compliance with accruals based IPSAS.

[10 marks]
QUESTION TWO
a)
Briefly explain the following accounting systems generally used in public sector organizations:

i)
Commitment accounting

[3 marks]

ii)
Fund accounting

[3 marks]

iii)
Encumbrances

[3 marks]
b)
The approved estimates and actual expenditure details for VoteF50 of Ministry XYZ for the
financial year 2007/2008 were as follows:

Approved Estimates Actual Estimates

Shs 000
Shs 000
Personal emoluments
246,560
195,040
House allowances
39,100
28,520
Passages and leave expenses
8,280
1,334
Transport operating expenses
32,200
27,186
Traveling and accommodation expenses
2,668
3,312
Postal and telegram expenses
9,200
6,624
Miscellaneous other charges
34,960
33,764
Training expenses
11,960
13,476
Purchase of motor vehicles
42,000
79,600
Appropriations in Aid
10,000
12,500

Page 3 of 5

The ministry made four equal withdrawals from the Exchequer in July 2007, October 2007,
January 2008 and May 2008. In total the ministry had withdrawn Shs.500 million by the end of
the year 2007/2008 financial year.
Supplementary estimates authorized during the year 2007/2008 financial year were as follows:

Shs 000
Personal emoluments
(24,560)
Training expenses
3,040
House allowances
(4100)
Appropriation in Aid
1,000
Required:
a)
General Account on Vote for the year ended 30th June 2008

[2 marks]
b)
Exchequer Account for the year ended 30th June 2008

[2 marks]
c)
Paymaster General (PMG) account for the year ended 30th June 2008
[2 marks]
d)
Statement of assets and liabilities as at 30th June 2008

[5 marks]

QUESTION THREE
a)
Briefly explain any four characteristics that distinguish governmental organizations from
business organizations.

[5 marks]
b)
With reference to public sector accounting, briefly explain the following terms.

i.
General fund

[2 marks]

ii.
Annual estimates

[2 marks]

iii.
Excess vote

[2 marks]

iv.
Encumbrance

[2 marks]

v.
Exchequer over issues

[2 marks]

QUESTION FOUR
a)
Briefly explain the following terms in relation to government accounting:

i)
Exchequer over issues

ii)
Paymaster General

iii)
Vote on account

iv)
Commitment accounting

[6 marks]

Page 4 of 5

b)
The following are details relating to approved estimates and actual expenditure for a certain
government for the financial year ended 30 June 2009.

Approved estimates
Actual expenditure
Shs
Shs
Personal emoluments
6,355,929
5,643,878
Other allowances
8,379,888
7,007,487
Transport and operating expenses
5,000,000
4,594,730
Travel and subsistence
3,300,000
2,630,500
Telephone and postage expenses
1,250,000
833,838
Electricity expenses
1,800,000
1,800,000
Purchase of stationery
2,000,000
1,800,000
Purchase of equipment
13,200,000
12,355,555
Training expenses
2,500,000
2,398,200
Appropriations-In-Aid
8,500,000
7,900,000

The exchequer issues were duly released in four equal installments of shs.8,750,000 each.

Required:
i)
Paymaster general account

[2 marks]
ii)
Exchequer account

[2 marks]
iii)
General account of vote

[2 marks]
iv)
Statement of assets and liabilities as at 30 June 2009

[3 marks]
……………………………
Page 5 of 5

Bac 410: Public Sector Accounting Question Paper

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