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ere cash basis and accrual basis. These two bases differ in many respet though there are some similarities... Required: Contrast the cash:basis and accrual basis of accounting in the public sector in terms of: a) Recognition of revenue.

ere cash basis and accrual basis. These two bases differ in many respet though there are some similarities... Required: Contrast the cash:basis and accrual basis of accounting in the public sector in terms of: a) Recognition of revenue.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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though there are some similarities.. Required: sector in terms of: a) Recognition of revenue b) Recognition of expenditure c) Disclosure of non-financial assets d) Notion of depreciation 2. The following information relates to the Ministry of Works and Housine: A. The Ministry expects to receive monthly capital grant from he government. The recent and forecasted capital grants are: GHC'000 August (actual) September (actual) October (forecast) November (forecast) December (forecast) January(forecast) February (forecast) March (forecast) April (forecast) 400,000 500,000 600,000 700,000 800,000 800,000 700,000 600,000 500,000 a. 1 is ui e y
Transcribed Image Text:though there are some similarities.. Required: sector in terms of: a) Recognition of revenue b) Recognition of expenditure c) Disclosure of non-financial assets d) Notion of depreciation 2. The following information relates to the Ministry of Works and Housine: A. The Ministry expects to receive monthly capital grant from he government. The recent and forecasted capital grants are: GHC'000 August (actual) September (actual) October (forecast) November (forecast) December (forecast) January(forecast) February (forecast) March (forecast) April (forecast) 400,000 500,000 600,000 700,000 800,000 800,000 700,000 600,000 500,000 a. 1 is ui e y
are paid by one month prior to the capital grant. the second month following the grant. Sons or same month as the capital grant. re December and January; and GHC 8.000,000 for February and March. F. Training and development expenses of GHC 10,000,000 each are expected to be paid in October and January. A capital expenditure oI GHC 100,000,000 will occur in October and the Ministry has a Mortgage payment of GHC 5.0000.000 due each of the six months. G. The cash balance at the end of September is GHC 125, 000,000 and the Ministry wants to maintain a minimum balance of GHC 60,000,000 at all times. The Ministry will borrow the amounts ts necessary to ensure that the minimum balance is achieved. If the cash balance is above the minimum and there is still a loan balance from the previous months, excess funds will be applied to the loan balance until it is eliminated. Required: Prepare a Cash Budget for the Ministry for Six Months period ending at 31 March. 11. 1. Explain Cash limit system and give three (3) reasons for which a government ministry may prepare a cash budget. I1. State any three (3) causes of cash flow probleins in public sector entities and suggest three (3) ways of inmproving them.
Transcribed Image Text:are paid by one month prior to the capital grant. the second month following the grant. Sons or same month as the capital grant. re December and January; and GHC 8.000,000 for February and March. F. Training and development expenses of GHC 10,000,000 each are expected to be paid in October and January. A capital expenditure oI GHC 100,000,000 will occur in October and the Ministry has a Mortgage payment of GHC 5.0000.000 due each of the six months. G. The cash balance at the end of September is GHC 125, 000,000 and the Ministry wants to maintain a minimum balance of GHC 60,000,000 at all times. The Ministry will borrow the amounts ts necessary to ensure that the minimum balance is achieved. If the cash balance is above the minimum and there is still a loan balance from the previous months, excess funds will be applied to the loan balance until it is eliminated. Required: Prepare a Cash Budget for the Ministry for Six Months period ending at 31 March. 11. 1. Explain Cash limit system and give three (3) reasons for which a government ministry may prepare a cash budget. I1. State any three (3) causes of cash flow probleins in public sector entities and suggest three (3) ways of inmproving them.
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