concept or principles of public sector account (2) (1)

What is Public Sector Accounting?

A process for recording, analyzing, summarizing, reporting, communicating, and interpreting financial information about government transactions involving receipts, transfers, and disbursements.

What are the three categories of Public Sector entities?

1. Federal Government Ministries and Departments, 2. State Government Ministries and Departments, 3. Local Government.

Who are the internal users of government accounting information?

Internal users include government executives, Federal Ministers, State Commissioners, general managers of parastatals, tax collectors, trade unions, and top administrators.

What are external users of government accounting information?

External users include legislative houses, the general public, researchers, media representatives, foreign investors, financial institutions, and governmental bodies.

What is the main purpose of Government Accounting?

To demonstrate the propriety of transactions and provide evidence of accountability for government resources.

List the advantages of Cash Basis Accounting.

1. Easy to compile financial reports, 2. Promotes accountability, 3. Simple comparison between budgeted and actual spending, 4. Strictly factual measurement.

What is Accrual Basis Accounting?

Accrual basis accounting recognizes revenue and expenses when they are incurred, regardless of cash flow.

What are the principles of Public Sector Accounting?

Consistency, materiality, periodicity, money measurement, double entry, going concern, and matching concept.

Define the Matching Concept in accounting.

The matching concept states that all relevant income should be matched with the relevant expenses incurred to earn that income.

What is the significance of accounting policies in Public Sector Accounting?

Accounting policies reflect the specific methods and principles chosen by management for preparing financial statements.

What is the role of the Accountant General in local government?

To manage the finances of the local government, provide financial advice, ensure proper accounting records, and maintain budgets.

What sources of revenue do Local Government Councils have?

1. Statutory allocations, 2. Permissive sources like licenses and fees, 3. Incidental sources like economic projects and loans.

What is Grant-In-Aids System?

A system designed to augment local councils' resources, address exceptional needs, and assist in central control over services.

Describe the characteristics of the Traditional Incremental Budgeting method.

It uses past budget figures and adds a percentage increase, making it common and fairly easy to implement, though often subjective.

What is Zero-Based Budgeting?

A budgeting method where all expenses must be justified for each new period, starting from a 'zero base'.

What challenges exist in the budgeting process in the public sector?

Human elements, inflation, political factors, external economic conditions, and lack of coordination.

What is the aim of Cost Benefit Analysis?

To compare the estimated costs of a project against its potential benefits to assess economic viability.

List some limitations of Cost Benefit Analysis.

1. Difficulty in valuing intangibles, 2. Predicting future costs and benefits, 3. High resource demands for implementation.

What do you understand by the term 'Public Debt'?

Loans owed by the state, which can be external (to foreign lenders) or internal (to local residents).

How does Public Sector Accounting ensure accountability?

By requiring financial information to comply with established rules and demonstrate proper use of public resources.