Cash Accounting – NBC Institute

FA – May 2024 – L1 – SA – Q18 – Accounts of Not-for-Profit Entities

Defines the nature of a receipt and payment account in accounting.

Question

What does a receipt and payment account represent in accounting?

A. A summary of cash receipts and payments, including both accruals and cash transactions
B. A summary of cash receipts and payments during the accounting period, without considering accruals
C. A record of all revenue transactions in the accounting period, irrespective of cash inflows or outflows
D. A record of all capital transactions, including cash receipts and payments, during the accounting period
E. A record of all non-cash transactions in the accounting period, excluding cash receipts and payments

Answer

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Tags: Cash Accounting, Non-Profit Accounting, Receipt and Payment Account
Level: Level 1

Topic: Accounts of Not-for-Profit Entities
Series: MAY 2024

PSAF – May 2017 – L2 – Q1b – Accounting policies for cash and accrual-based accounting systems

This question explains the differences between accrual and cash accounting, justifies the adoption of accrual accounting in the public sector, and describes the concept of commitment accounting.

Question

You have received an official email from your Director which reads:

“Hello Accountant,

Hope you are doing well. We have closed from a workshop organized by the Controller and Accountant General’s Department on public financial management not long ago and the discussion was all about the adoption of accrual accounting in the public sector. It was emphasized that migration from cash basis to accrual basis is necessary to improve financial reporting and transparency in the public sector. You know I have little knowledge in Accountancy so I was completely lost in the discussions and I wished you had attended the workshop with me.

Another issue discussed was commitment accounting. We were made to understand that commitment accounting strengthens public financial management and therefore departments must ensure that every expenditure is committed in accordance with the appropriation prior to spending.

Please could you help me with some information on these issues?

Thank you, Director.”

Required: i) Explain to the Director THREE differences between accrual accounting and cash accounting. (3 marks)

ii) Identify THREE justifications for adopting accrual accounting in the public sector. (3 marks)

iii) Explain the term commitment accounting and illustrate how it could strengthen public financial management. (4 marks)

Answer

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Tags: Accrual Accounting, Cash Accounting, Commitment Accounting, Public Financial Management
Level: Level 2

Topic: Accounting policies for cash and accrual-based accounting systems
Series: MAY 2017

PSAF – May 2019 – L2 – Q1a – Accounting policies for cash and accrual-based accounting systems

Explain the key characteristics of commitment, accrual, and cash accounting bases used in public sector accounting.

Question

a) Accounting Concepts and Bases are broad basic assumptions, which underlie the preparation of the periodic financial statements of entities in the public sector. Unless stated, it would be assumed that they have been adhered to when preparing financial statements.

Required:
Explain THREE (3) key characteristics of each of the following Accounting Bases used in Public Sector Accounting:
i) Commitment accounting
ii) Accrual accounting
iii) Cash accounting
(9 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Accrual Accounting, Cash Accounting, Commitment Accounting
Level: Level 2

Topic: Accounting policies for cash and accrual-based accounting systems
Series: MAY 2019

PSAF – May 2020 – L1 – Q1a – Accounting policies for cash and accrual-based accounting systems

Discusses the differences between cash accounting policies and accrual accounting policies concerning their recognition and treatment in financial statements for various accounting elements.

Question

Cash accounting policies and accrual accounting policies, when applied respectively to the same transaction or events of the same entity, will produce different pictures of the financial performance, position, and cash flow information of the entity. Thus, the choice of alternative policies needs to be given much consideration. The International Public Sector Accounting Standards Board (IPSASB) permits the use of cash accounting policies whilst encouraging the application of accrual accounting policies in the preparation of financial reports for the public sector.

Required:
Discuss the difference between cash accounting policies and accrual accounting policies in terms of recognition and/or treatment of the following in the Financial Statements: i) Revenue
ii) Capital asset
iii) Allowances and provisions
iv) Contingent liability

Answer

Find Related Questions by Tags, levels, etc.

Tags: Accrual Accounting, Cash Accounting, Financial Statements, IPSAS, Public Sector Accounting
Level: Level 2

Topic: Accounting policies for cash and accrual-based accounting systems
Series: MAY 2020

FA – May 2024 – L1 – SA – Q18 – Accounts of Not-for-Profit Entities

Defines the nature of a receipt and payment account in accounting.

Question

What does a receipt and payment account represent in accounting?

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cash Accounting, Non-Profit Accounting, Receipt and Payment Account
Level: Level 1

Topic: Accounts of Not-for-Profit Entities
Series: MAY 2024

PSAF – May 2017 – L2 – Q1b – Accounting policies for cash and accrual-based accounting systems

This question explains the differences between accrual and cash accounting, justifies the adoption of accrual accounting in the public sector, and describes the concept of commitment accounting.

Question

You have received an official email from your Director which reads:

“Hello Accountant,

Please could you help me with some information on these issues?

Thank you, Director.”

Required: i) Explain to the Director THREE differences between accrual accounting and cash accounting. (3 marks)

ii) Identify THREE justifications for adopting accrual accounting in the public sector. (3 marks)

iii) Explain the term commitment accounting and illustrate how it could strengthen public financial management. (4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Accrual Accounting, Cash Accounting, Commitment Accounting, Public Financial Management
Level: Level 2

Topic: Accounting policies for cash and accrual-based accounting systems
Series: MAY 2017

PSAF – May 2019 – L2 – Q1a – Accounting policies for cash and accrual-based accounting systems

Explain the key characteristics of commitment, accrual, and cash accounting bases used in public sector accounting.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Accrual Accounting, Cash Accounting, Commitment Accounting
Level: Level 2

Topic: Accounting policies for cash and accrual-based accounting systems
Series: MAY 2019

PSAF – May 2020 – L1 – Q1a – Accounting policies for cash and accrual-based accounting systems

Discusses the differences between cash accounting policies and accrual accounting policies concerning their recognition and treatment in financial statements for various accounting elements.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Accrual Accounting, Cash Accounting, Financial Statements, IPSAS, Public Sector Accounting
Level: Level 2

Topic: Accounting policies for cash and accrual-based accounting systems
Series: MAY 2020

Question Tag: Cash Accounting

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FA – May 2024 – L1 – SA – Q18 – Accounts of Not-for-Profit Entities

Defines the nature of a receipt and payment account in accounting.

PSAF – May 2017 – L2 – Q1b – Accounting policies for cash and accrual-based accounting systems

This question explains the differences between accrual and cash accounting, justifies the adoption of accrual accounting in the public sector, and describes the concept of commitment accounting.

PSAF – May 2019 – L2 – Q1a – Accounting policies for cash and accrual-based accounting systems

Explain the key characteristics of commitment, accrual, and cash accounting bases used in public sector accounting.

PSAF – May 2020 – L1 – Q1a – Accounting policies for cash and accrual-based accounting systems

Discusses the differences between cash accounting policies and accrual accounting policies concerning their recognition and treatment in financial statements for various accounting elements.

FA – May 2024 – L1 – SA – Q18 – Accounts of Not-for-Profit Entities

Defines the nature of a receipt and payment account in accounting.

PSAF – May 2017 – L2 – Q1b – Accounting policies for cash and accrual-based accounting systems

This question explains the differences between accrual and cash accounting, justifies the adoption of accrual accounting in the public sector, and describes the concept of commitment accounting.

PSAF – May 2019 – L2 – Q1a – Accounting policies for cash and accrual-based accounting systems

Explain the key characteristics of commitment, accrual, and cash accounting bases used in public sector accounting.

PSAF – May 2020 – L1 – Q1a – Accounting policies for cash and accrual-based accounting systems

Discusses the differences between cash accounting policies and accrual accounting policies concerning their recognition and treatment in financial statements for various accounting elements.

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Question Tag: Cash Accounting

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FA – May 2024 – L1 – SA – Q18 – Accounts of Not-for-Profit Entities

Defines the nature of a receipt and payment account in accounting.

You're reporting an error for "FA – May 2024 – L1 – SA – Q18 – Accounts of Not-for-Profit Entities"

PSAF – May 2017 – L2 – Q1b – Accounting policies for cash and accrual-based accounting systems

This question explains the differences between accrual and cash accounting, justifies the adoption of accrual accounting in the public sector, and describes the concept of commitment accounting.

You're reporting an error for "PSAF – May 2017 – L2 – Q1b – Accounting policies for cash and accrual-based accounting systems"

PSAF – May 2019 – L2 – Q1a – Accounting policies for cash and accrual-based accounting systems

Explain the key characteristics of commitment, accrual, and cash accounting bases used in public sector accounting.

You're reporting an error for "PSAF – May 2019 – L2 – Q1a – Accounting policies for cash and accrual-based accounting systems"

PSAF – May 2020 – L1 – Q1a – Accounting policies for cash and accrual-based accounting systems

Discusses the differences between cash accounting policies and accrual accounting policies concerning their recognition and treatment in financial statements for various accounting elements.

You're reporting an error for "PSAF – May 2020 – L1 – Q1a – Accounting policies for cash and accrual-based accounting systems"

FA – May 2024 – L1 – SA – Q18 – Accounts of Not-for-Profit Entities

Defines the nature of a receipt and payment account in accounting.

You're reporting an error for "FA – May 2024 – L1 – SA – Q18 – Accounts of Not-for-Profit Entities"

PSAF – May 2017 – L2 – Q1b – Accounting policies for cash and accrual-based accounting systems

This question explains the differences between accrual and cash accounting, justifies the adoption of accrual accounting in the public sector, and describes the concept of commitment accounting.

You're reporting an error for "PSAF – May 2017 – L2 – Q1b – Accounting policies for cash and accrual-based accounting systems"

PSAF – May 2019 – L2 – Q1a – Accounting policies for cash and accrual-based accounting systems

Explain the key characteristics of commitment, accrual, and cash accounting bases used in public sector accounting.

You're reporting an error for "PSAF – May 2019 – L2 – Q1a – Accounting policies for cash and accrual-based accounting systems"

PSAF – May 2020 – L1 – Q1a – Accounting policies for cash and accrual-based accounting systems

Discusses the differences between cash accounting policies and accrual accounting policies concerning their recognition and treatment in financial statements for various accounting elements.

You're reporting an error for "PSAF – May 2020 – L1 – Q1a – Accounting policies for cash and accrual-based accounting systems"

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