Commitment Accounting – NBC Institute

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 2016 – L2 – Q2b – Public Sector Fiscal Planning and Budgeting

Identify procedures in commitment accounting and explain reasons for writing off advances in the public sector.

Question

i) Commitment accounting begins with the commitment process.

Required:
Identify THREE procedures involved in the commitment process. (3 marks)

ii) Heads of departments have administering authority for advances, recoveries, and proper record keeping in addition to administering losses incurred in advances issued to staff of their department (FAR 121).

Required:
Explain TWO reasons why a head of a government entity may decide to write off advances owed by public officials. (2 marks)

Answer

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Tags: Advances, Commitment Accounting, Financial management, Public Sector Accounting, Public Sector Policies, Write-Offs
Level: Level 2

Topic: Public sector fiscal planning and budgeting
Series: MAY 2016

PSAF – May 2016 – L2 – Q2a – Public sector fiscal planning and budgeting

Explain the conditions required for government agencies to receive financial support and discuss various public financial management topics.

Question

Government agencies and subvented organisations receive financial support from the government for their operations.

Required:
Explain THREE conditions which these entities must fulfill to enable them to receive financial support from the government. (3 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Budgeting, Commitment Accounting, Financial Conditions, Government Support, Public Institutions
Level: Level 2

Topic: Public sector fiscal planning and budgeting
Series: MAY 2016

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 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 2016 – L2 – Q2b – Public Sector Fiscal Planning and Budgeting

Identify procedures in commitment accounting and explain reasons for writing off advances in the public sector.

Question

i) Commitment accounting begins with the commitment process.

Required:
Identify THREE procedures involved in the commitment process. (3 marks)

Required:
Explain TWO reasons why a head of a government entity may decide to write off advances owed by public officials. (2 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Advances, Commitment Accounting, Financial management, Public Sector Accounting, Public Sector Policies, Write-Offs
Level: Level 2

Topic: Public sector fiscal planning and budgeting
Series: MAY 2016

PSAF – May 2016 – L2 – Q2a – Public sector fiscal planning and budgeting

Explain the conditions required for government agencies to receive financial support and discuss various public financial management topics.

Question

Government agencies and subvented organisations receive financial support from the government for their operations.

Required:
Explain THREE conditions which these entities must fulfill to enable them to receive financial support from the government. (3 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Budgeting, Commitment Accounting, Financial Conditions, Government Support, Public Institutions
Level: Level 2

Topic: Public sector fiscal planning and budgeting
Series: MAY 2016

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

Question Tag: Commitment Accounting

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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 2016 – L2 – Q2b – Public Sector Fiscal Planning and Budgeting

Identify procedures in commitment accounting and explain reasons for writing off advances in the public sector.

PSAF – May 2016 – L2 – Q2a – Public sector fiscal planning and budgeting

Explain the conditions required for government agencies to receive financial support and discuss various public financial management topics.

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 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 2016 – L2 – Q2b – Public Sector Fiscal Planning and Budgeting

Identify procedures in commitment accounting and explain reasons for writing off advances in the public sector.

PSAF – May 2016 – L2 – Q2a – Public sector fiscal planning and budgeting

Explain the conditions required for government agencies to receive financial support and discuss various public financial management topics.

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.

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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 2016 – L2 – Q2b – Public Sector Fiscal Planning and Budgeting

Identify procedures in commitment accounting and explain reasons for writing off advances in the public sector.

You're reporting an error for "PSAF – May 2016 – L2 – Q2b – Public Sector Fiscal Planning and Budgeting"

PSAF – May 2016 – L2 – Q2a – Public sector fiscal planning and budgeting

Explain the conditions required for government agencies to receive financial support and discuss various public financial management topics.

You're reporting an error for "PSAF – May 2016 – L2 – Q2a – Public sector fiscal planning and budgeting"

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 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 2016 – L2 – Q2b – Public Sector Fiscal Planning and Budgeting

Identify procedures in commitment accounting and explain reasons for writing off advances in the public sector.

You're reporting an error for "PSAF – May 2016 – L2 – Q2b – Public Sector Fiscal Planning and Budgeting"

PSAF – May 2016 – L2 – Q2a – Public sector fiscal planning and budgeting

Explain the conditions required for government agencies to receive financial support and discuss various public financial management topics.

You're reporting an error for "PSAF – May 2016 – L2 – Q2a – Public sector fiscal planning and budgeting"

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"

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