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- 8 Marks
PSAF – Nov 2024 – L2 – Q1a – Financial Statements Preparation
Prepare the Statement of Financial Performance for Paja Teaching Hospital following IPSAS guidelines.
Question
Below is a Trial Balance of Paja Teaching Hospital (PTH) under the Ministry of Health for the year ended 31 December 2023.
| Debit (GH¢000) | Credit (GH¢000) |
|---|---|
| Cash and Bank – GoG | 3,400 |
| Cash and Bank – IGF | 72,200 |
| Cash and Bank – Donor Funds | 210,400 |
| Undeposited Cash – IGF | 4,000 |
| Petty Cash | 100 |
| Investments | 2,000 |
| Debtors | 661,400 |
| Other Receivables | 17,700 |
| Withholding Tax | |
| Trust Funds | |
| Trade Payables | |
| GoG Subsidy – Employee Compensation | |
| GoG Subsidy – Goods & Services | |
| Development Partners Programmes Receipt | |
| Other Non-Operating Income | |
| Medicines & Pharmaceuticals | 433,900 |
| Surgical | 50,800 |
| Medical | 111,400 |
| Investigation | 140,900 |
| OPD | 238,400 |
| Obstetrics and Gynaecology | 135,300 |
| Dental | 8,300 |
| Pediatrics | 40,300 |
| Ear, Nose & Throat | 5,300 |
| Eye Care | 7,300 |
| Mortuary | 30,000 |
| Ambulance Fees | 300 |
| Ophthalmology | 3,000 |
| Physiotherapy | 3,300 |
| Examination Fees | 200 |
| Dialysis | 400 |
| Feeding | 30,400 |
| Employee Compensation – GoG | 3,912,500 |
| Goods & Services – GoG | 20,800 |
| Employee Compensation – IGF | 148,000 |
| Goods & Services – IGF | 978,500 |
| Capital Expenditure – IGF | 27,500 |
| Goods & Services – Partners Fund | 472,400 |
| Accumulated Fund | |
| Total | 6,530,900 |
Additional Information:
- The hospital previously used modified accrual accounting but switched to IPSAS accrual basis in 2023.
- The hospital revalued legacy assets as follows:
- Motor Vehicles: GH¢50,250,000
- Buildings: GH¢120,540,000
- Medical Equipment & Other Equipment: GH¢31,500,000
- Land: GH¢15,000,000
- Gavi supported the hospital with GH¢200,000,000 in 2023, but 20% was allocated for Q1 of 2024. The Global Fund committed GH¢250,000,000, but only GH¢200,000,000 was received.
- NHIA rejected 10% of the hospital’s total claims of GH¢100,300,000.
- Parliament approved a write-off of GH¢20,225,000 for unpaid hospital services.
- The capital expenditure consists of:
- Medical Equipment: GH¢19,236,000
- Furniture & Fittings: GH¢8,264,000
- Depreciation Policy (Straight-Line Basis):
- Building: 5%
- Motor Vehicle: 20%
- Medical Equipment: 10%
- Furniture & Fitting: 25%
- Year-end inventory values:
| Inventory Type | Cost (GH¢000) | Replacement Cost (GH¢000) | Net Realisable Value (GH¢000) |
|---|---|---|---|
| Medicines (for resale) | 146,800 | 176,100 | 132,100 |
| Medical Consumables (For use on clients) | 29,400 | 33,800 | 30,800 |
| Office Consumables | 19,600 | 29,400 | 18,600 |
Required:
In compliance with IPSAS, the PFM Act, and the Government of Ghana Chart of Accounts, prepare:
a) A Statement of Financial Performance for Paja Teaching Hospital for the year ended 31 December 2023.
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- 6 Marks
PSAF – Nov 2016 – L2 – Q2b – International Public Sector Accounting Standards (IPSAS)
This question discusses the benefits of adopting IPSAS in public sector accounting, focusing on transparency, accountability, and credibility improvements.
Find Related Questions by Tags, levels, etc.
- Tags: Accrual Accounting, Financial Reporting, IPSAS, Public Sector Reforms
- Level: Level 2
- Topic: International public sector accounting standards
- Series: NOV 2016
- 12 Marks
PSAF – Nov 2016 – L2 – Q2a – International Public Sector Accounting Standards (IPSAS)
This question outlines the benefits of migrating from IPSAS-CASH to IPSAS-ACCRUAL basis for public sector accounting.
Question
In an effort to promote accountability and transparency in governance, the
administration has adopted and implemented the International Public Sector
Accounting Standards (IPSAS) from January 2014. The governments (Federal, State,
Local) and other public institutions adopted IPSAS in the reporting and presentation
of financial statements to improve the quality and comparability of financial
information, and to be in conformity with other advanced nations of the world. IPSASCASH is already adopted in the budgeting, accounting and presentation of financial
statements, while IPSAS-ACCRUAL takes effect from January 2016.
You are required to:
Identify any SIX benefits of migration from IPSAS-CASH basis to IPSAS ACCRUAL basis.
Find Related Questions by Tags, levels, etc.
- Tags: Accrual Accounting, Cash Basis, Financial Reporting, IPSAS, Public Sector Reforms
- Level: Level 2
- Topic: International public sector accounting standards
- Series: NOV 2016
- 8 Marks
FA – Nov 2015 – L1 – SB – Q6c – Bases of Accounting: Accrual vs. Cash
Prepare the Rental Income Account to recognize rent in the profit or loss.
Question
D’favour owns several properties in Lagos that are let out to tenants. The summary of transactions at December 31, 2014, is given below:
| Item | N’000 |
|---|---|
| Accrued rent at December 31, 2013 | 440 |
| Prepaid rent at December 31, 2013 | 250 |
| Rent received during 2014 | 2,550 |
| Accrued rent at December 31, 2014 | 350 |
| Prepaid rent at December 31, 2014 | 480 |
| Uncollectable rent to be written-off | 35 |
| Agreement fee received | 50 |
Required:
Prepare the Rental Income Account to determine the amount of rent to be recognized in the Statement of Profit or Loss. (8 Marks)
Find Related Questions by Tags, levels, etc.
- Tags: Accrual Accounting, Prepaid Rent, Rental Income, Write-off
- Level: Level 1
- Topic: Bases of Accounting: Accrual vs. Cash
- Series: NOV 2015
- 4 Marks
FA – Nov 2015 – L1 – SB – Q6b – Bases of Accounting: Accrual vs. Cash
Calculate rent recognized for profit or loss and financial position as of March 31, 2014.
Question
Oluyemi Ventures prepares its financial statements to March 31 each year. The business pays rent quarterly in advance on January 1, April 1, July 1, and October 1 each year. The annual rent is N600,000. On June 30, 2013, the rent was increased to N900,000 per annum.
Required:
i. Calculate the amount of rent that will be recognized in the Statement of Profit or Loss for the year ended March 31, 2014. (3 Marks)
ii. Calculate the amount to be recognized in the Statement of Financial Position as at March 31, 2014. (1 Mark)
Find Related Questions by Tags, levels, etc.
- Tags: Accrual Accounting, Rent Expense, Statement of Profit or Loss
- Level: Level 1
- Topic: Bases of Accounting: Accrual vs. Cash
- Series: NOV 2015
- 1 Marks
FA – Nov 2014 – L1 – SA – Q18 – Accounting Concepts
Identifying the accounting concept that governs recognizing transactions in the period they occur.
Question
Accounting for the effects of transactions and other events and circumstances on a reporting entity’s economic resources and claims in the period in which those effects occur, even if the resulting cash receipts and payments occur in a different period, is governed by which of the following accounting concepts?
A. Cash basis
B. Accrual
C. Matching
D. Consistency
E. Going concern
Find Related Questions by Tags, levels, etc.
- Tags: Accounting Concepts, Accrual Accounting, Financial Reporting
- Level: Level 1
- Topic: Accounting Concepts
- Series: NOV 2014
- 1 Marks
FA – May 2017 – L1 – SA – Q10 – Accounting Treatment for Accruals and Prepayments
Concerns the treatment of rent received for 12 months over two financial periods.
Question
On June 1, 2015, Nkiwe Enterprises received a rent of N240,000 for 12 months to May 31, 2016. The reporting date of Nkiwe is December 31. What are the entries in the statement of profit or loss for the year ended, and statement of financial position as at, December 31, 2015?
Profit or loss Statement of financial position
N N
A. 100,000 income 140,000 liability
B. 100,000 expenses 140,000 asset
C. 140,000 income 100,000 liability
D. 140,000 expenses 100,000 asset
E. 240,000 income no entry
Find Related Questions by Tags, levels, etc.
- Tags: Accrual Accounting, Financial Statements, Prepayments, Rent Treatment
- Level: Level 1
- Topic: Accruals and Prepayments
- Series: MAY 2017
- 1 Marks
FA – May 2024 – L1 – SA – Q1 – Accounting Concepts
Identifies the accounting concept related to prepaid and accrued expenses adjustments.
Question
In the process of drawing up financial statements, adjustments are made for prepaid expenses and accrued expenses in order to comply with which fundamental accounting concept?
A. Matching
B. Prudency
C. Aggregation
D. Accrual
E. Consistency
Find Related Questions by Tags, levels, etc.
- Tags: Accounting principles, Accrual Accounting, Matching Concept
- Level: Level 1
- Topic: Accounting Concepts
- Series: MAY 2024
- 4 Marks
CR – May 2018 – L3 – Q4a – IAS 7: Statement of cash flows
Explain four arguments against the view that historical cash flow is more useful than historical profit in appraising a company.
Question
It is often argued that historical cash flow is more useful in appraising a company than historical profit, particularly because cash flows are factual and do not involve the exercise of judgment.
Required:
Explain FOUR arguments against this view. (4 marks)
Find Related Questions by Tags, levels, etc.
- Tags: Accrual Accounting, Cash Flow, Company appraisal, Financial Analysis, Profit
- Level: Level 3
- Topic: IAS 7: Statement of cash flows
- Series: MAY 2018
- 8 Marks
PSAF – Nov 2024 – L2 – Q1a – Financial Statements Preparation
Prepare the Statement of Financial Performance for Paja Teaching Hospital following IPSAS guidelines.
Question
Below is a Trial Balance of Paja Teaching Hospital (PTH) under the Ministry of Health for the year ended 31 December 2023.
| Debit (GH¢000) | Credit (GH¢000) |
|---|---|
| Cash and Bank – GoG | 3,400 |
| Cash and Bank – IGF | 72,200 |
| Cash and Bank – Donor Funds | 210,400 |
| Undeposited Cash – IGF | 4,000 |
| Petty Cash | 100 |
| Investments | 2,000 |
| Debtors | 661,400 |
| Other Receivables | 17,700 |
| Withholding Tax | |
| Trust Funds | |
| Trade Payables | |
| GoG Subsidy – Employee Compensation | |
| GoG Subsidy – Goods & Services | |
| Development Partners Programmes Receipt | |
| Other Non-Operating Income | |
| Medicines & Pharmaceuticals | 433,900 |
| Surgical | 50,800 |
| Medical | 111,400 |
| Investigation | 140,900 |
| OPD | 238,400 |
| Obstetrics and Gynaecology | 135,300 |
| Dental | 8,300 |
| Pediatrics | 40,300 |
| Ear, Nose & Throat | 5,300 |
| Eye Care | 7,300 |
| Mortuary | 30,000 |
| Ambulance Fees | 300 |
| Ophthalmology | 3,000 |
| Physiotherapy | 3,300 |
| Examination Fees | 200 |
| Dialysis | 400 |
| Feeding | 30,400 |
| Employee Compensation – GoG | 3,912,500 |
| Goods & Services – GoG | 20,800 |
| Employee Compensation – IGF | 148,000 |
| Goods & Services – IGF | 978,500 |
| Capital Expenditure – IGF | 27,500 |
| Goods & Services – Partners Fund | 472,400 |
| Accumulated Fund | |
| Total | 6,530,900 |
Additional Information:
- The hospital previously used modified accrual accounting but switched to IPSAS accrual basis in 2023.
- The hospital revalued legacy assets as follows:
- Motor Vehicles: GH¢50,250,000
- Buildings: GH¢120,540,000
- Medical Equipment & Other Equipment: GH¢31,500,000
- Land: GH¢15,000,000
- Gavi supported the hospital with GH¢200,000,000 in 2023, but 20% was allocated for Q1 of 2024. The Global Fund committed GH¢250,000,000, but only GH¢200,000,000 was received.
- NHIA rejected 10% of the hospital’s total claims of GH¢100,300,000.
- Parliament approved a write-off of GH¢20,225,000 for unpaid hospital services.
- The capital expenditure consists of:
- Medical Equipment: GH¢19,236,000
- Furniture & Fittings: GH¢8,264,000
- Depreciation Policy (Straight-Line Basis):
- Building: 5%
- Motor Vehicle: 20%
- Medical Equipment: 10%
- Furniture & Fitting: 25%
- Year-end inventory values:
| Inventory Type | Cost (GH¢000) | Replacement Cost (GH¢000) | Net Realisable Value (GH¢000) |
|---|---|---|---|
| Medicines (for resale) | 146,800 | 176,100 | 132,100 |
| Medical Consumables (For use on clients) | 29,400 | 33,800 | 30,800 |
| Office Consumables | 19,600 | 29,400 | 18,600 |
Required:
In compliance with IPSAS, the PFM Act, and the Government of Ghana Chart of Accounts, prepare:
a) A Statement of Financial Performance for Paja Teaching Hospital for the year ended 31 December 2023.
Find Related Questions by Tags, levels, etc.
- 6 Marks
PSAF – Nov 2016 – L2 – Q2b – International Public Sector Accounting Standards (IPSAS)
This question discusses the benefits of adopting IPSAS in public sector accounting, focusing on transparency, accountability, and credibility improvements.
Find Related Questions by Tags, levels, etc.
- Tags: Accrual Accounting, Financial Reporting, IPSAS, Public Sector Reforms
- Level: Level 2
- Topic: International public sector accounting standards
- Series: NOV 2016
- 12 Marks
PSAF – Nov 2016 – L2 – Q2a – International Public Sector Accounting Standards (IPSAS)
This question outlines the benefits of migrating from IPSAS-CASH to IPSAS-ACCRUAL basis for public sector accounting.
Question
In an effort to promote accountability and transparency in governance, the
administration has adopted and implemented the International Public Sector
Accounting Standards (IPSAS) from January 2014. The governments (Federal, State,
Local) and other public institutions adopted IPSAS in the reporting and presentation
of financial statements to improve the quality and comparability of financial
information, and to be in conformity with other advanced nations of the world. IPSASCASH is already adopted in the budgeting, accounting and presentation of financial
statements, while IPSAS-ACCRUAL takes effect from January 2016.
You are required to:
Identify any SIX benefits of migration from IPSAS-CASH basis to IPSAS ACCRUAL basis.
Find Related Questions by Tags, levels, etc.
- Tags: Accrual Accounting, Cash Basis, Financial Reporting, IPSAS, Public Sector Reforms
- Level: Level 2
- Topic: International public sector accounting standards
- Series: NOV 2016
- 8 Marks
FA – Nov 2015 – L1 – SB – Q6c – Bases of Accounting: Accrual vs. Cash
Prepare the Rental Income Account to recognize rent in the profit or loss.
Question
D’favour owns several properties in Lagos that are let out to tenants. The summary of transactions at December 31, 2014, is given below:
| Item | N’000 |
|---|---|
| Accrued rent at December 31, 2013 | 440 |
| Prepaid rent at December 31, 2013 | 250 |
| Rent received during 2014 | 2,550 |
| Accrued rent at December 31, 2014 | 350 |
| Prepaid rent at December 31, 2014 | 480 |
| Uncollectable rent to be written-off | 35 |
| Agreement fee received | 50 |
Required:
Prepare the Rental Income Account to determine the amount of rent to be recognized in the Statement of Profit or Loss. (8 Marks)
Find Related Questions by Tags, levels, etc.
- Tags: Accrual Accounting, Prepaid Rent, Rental Income, Write-off
- Level: Level 1
- Topic: Bases of Accounting: Accrual vs. Cash
- Series: NOV 2015
- 4 Marks
FA – Nov 2015 – L1 – SB – Q6b – Bases of Accounting: Accrual vs. Cash
Calculate rent recognized for profit or loss and financial position as of March 31, 2014.
Question
Oluyemi Ventures prepares its financial statements to March 31 each year. The business pays rent quarterly in advance on January 1, April 1, July 1, and October 1 each year. The annual rent is N600,000. On June 30, 2013, the rent was increased to N900,000 per annum.
Required:
i. Calculate the amount of rent that will be recognized in the Statement of Profit or Loss for the year ended March 31, 2014. (3 Marks)
ii. Calculate the amount to be recognized in the Statement of Financial Position as at March 31, 2014. (1 Mark)
Find Related Questions by Tags, levels, etc.
- Tags: Accrual Accounting, Rent Expense, Statement of Profit or Loss
- Level: Level 1
- Topic: Bases of Accounting: Accrual vs. Cash
- Series: NOV 2015
- 1 Marks
FA – Nov 2014 – L1 – SA – Q18 – Accounting Concepts
Identifying the accounting concept that governs recognizing transactions in the period they occur.
Question
Accounting for the effects of transactions and other events and circumstances on a reporting entity’s economic resources and claims in the period in which those effects occur, even if the resulting cash receipts and payments occur in a different period, is governed by which of the following accounting concepts?
A. Cash basis
B. Accrual
C. Matching
D. Consistency
E. Going concern
Find Related Questions by Tags, levels, etc.
- Tags: Accounting Concepts, Accrual Accounting, Financial Reporting
- Level: Level 1
- Topic: Accounting Concepts
- Series: NOV 2014
- 1 Marks
FA – May 2017 – L1 – SA – Q10 – Accounting Treatment for Accruals and Prepayments
Concerns the treatment of rent received for 12 months over two financial periods.
Question
On June 1, 2015, Nkiwe Enterprises received a rent of N240,000 for 12 months to May 31, 2016. The reporting date of Nkiwe is December 31. What are the entries in the statement of profit or loss for the year ended, and statement of financial position as at, December 31, 2015?
Profit or loss Statement of financial position
N N
A. 100,000 income 140,000 liability
B. 100,000 expenses 140,000 asset
C. 140,000 income 100,000 liability
D. 140,000 expenses 100,000 asset
E. 240,000 income no entry
Find Related Questions by Tags, levels, etc.
- Tags: Accrual Accounting, Financial Statements, Prepayments, Rent Treatment
- Level: Level 1
- Topic: Accruals and Prepayments
- Series: MAY 2017
- 1 Marks
FA – May 2024 – L1 – SA – Q1 – Accounting Concepts
Identifies the accounting concept related to prepaid and accrued expenses adjustments.
Question
In the process of drawing up financial statements, adjustments are made for prepaid expenses and accrued expenses in order to comply with which fundamental accounting concept?
A. Matching
B. Prudency
C. Aggregation
D. Accrual
E. Consistency
Find Related Questions by Tags, levels, etc.
- Tags: Accounting principles, Accrual Accounting, Matching Concept
- Level: Level 1
- Topic: Accounting Concepts
- Series: MAY 2024
- 4 Marks
CR – May 2018 – L3 – Q4a – IAS 7: Statement of cash flows
Explain four arguments against the view that historical cash flow is more useful than historical profit in appraising a company.
Question
It is often argued that historical cash flow is more useful in appraising a company than historical profit, particularly because cash flows are factual and do not involve the exercise of judgment.
Required:
Explain FOUR arguments against this view. (4 marks)
Find Related Questions by Tags, levels, etc.
- Tags: Accrual Accounting, Cash Flow, Company appraisal, Financial Analysis, Profit
- Level: Level 3
- Topic: IAS 7: Statement of cash flows
- Series: MAY 2018