Public Sector Accounting | Jamb(UTME) Principles of Accounts

Comparison of Cash and Accrual Basis of Accounting

1. Cash basis records transactions when cash is received or paid.
2. Accrual basis records revenues when earned and expenses when incurred.
3. Cash basis does not recognize accounts receivable or payable.
4. Accrual basis includes accounts receivable and payable.
5. Cash basis is simpler and suitable for small entities.
6. Accrual basis provides a more accurate financial picture.
7. Cash basis focuses on actual cash flow.
8. Accrual basis focuses on economic events, not cash flow.
9. Cash basis does not comply with IFRS or GAAP standards.
10. Accrual basis aligns with international accounting standards.
11. Cash basis can misrepresent financial health if payments are delayed.
12. Accrual basis smoothens out earnings over time.
13. Cash basis is commonly used by non-profit organizations.
14. Accrual basis is mandatory for large companies.
15. Cash basis provides less useful information for long-term decision-making.
16. Accrual basis enables better matching of revenues and expenses.
17. Cash basis does not account for inventory changes.
18. Accrual basis requires more complex accounting systems.
19. Cash basis limits performance analysis to cash movements.
20. Accrual basis supports preparation of comprehensive financial statements.
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Sources of Government Revenue

21. Taxes on income and profits (e.g., personal income tax).
22. Taxes on goods and services (e.g., VAT).
23. Customs and excise duties.
24. Licenses and permits fees.
25. Property rates and land rents.
26. Royalties from natural resources.
27. Fines and penalties.
28. Grants from international bodies.
29. Earnings from government investments.
30. Dividends from state-owned enterprises.
31. Sales of government assets.
32. User charges (e.g., tolls, school fees).
33. Foreign aid and donations.
34. Stamp duties.
35. Motor vehicle licenses.
36. Broadcasting licenses.
37. Withholding taxes.
38. Airport and port charges.
39. Ecological levies.
40. Tourism levies.
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Capital and Recurrent Expenditure

41. Capital expenditure involves spending on long-term assets.
42. Recurrent expenditure covers routine operational costs.
43. Capital expenditure includes building infrastructure.
44. Recurrent expenditure includes salaries and wages.
45. Capital expenditure supports economic development.
46. Recurrent expenditure ensures daily functioning of government.
47. Capital expenditure leads to asset creation.
48. Recurrent expenditure maintains existing services.
49. Capital projects are typically one-time expenses.
50. Recurrent expenses are ongoing and periodic.
51. Capital expenditure boosts future income-generating capacity.
52. Recurrent expenditure covers interest payments.
53. Capital expenditure includes procurement of machinery.
54. Recurrent expenditure includes utility bills.
55. Capital expenditure often requires borrowing or saving.
56. Recurrent expenditure depends on regular revenue flow.
57. Capital expenditure is budgeted in development plans.
58. Recurrent expenditure is in annual operational budgets.
59. Capital expenditure can stimulate job creation.
60. Recurrent expenditure ensures continuity of services.
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Consolidated Revenue Fund (CRF)

61. CRF is the main government account for revenue and spending.
62. All government revenues are credited to the CRF.
63. Withdrawals from CRF must be authorized by legislation.
64. CRF ensures accountability in public finance.
65. CRF centralizes government financial resources.
66. CRF supports national budget implementation.
67. Auditor General audits the CRF.
68. CRF reduces risks of fund mismanagement.
69. CRF finances both capital and recurrent expenditures.
70. CRF requires appropriation bills for spending.
71. Taxes collected are first paid into CRF.
72. Loans raised by government are deposited into CRF.
73. Fines and penalties contribute to CRF.
74. CRF expenditure is reported in public accounts.
75. CRF enhances fiscal transparency.
76. CRF must follow strict accounting principles.
77. Ministers manage CRF disbursements.
78. CRF reflects consolidated government fiscal status.
79. CRF is part of the national budgetary framework.
80. Efficient CRF management supports economic stability.
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Statement of Assets and Liabilities

81. Statement of assets and liabilities shows financial position.
82. Assets include cash, receivables, and properties.
83. Liabilities include loans, payables, and obligations.
84. Statement balances assets against liabilities.
85. Net worth is calculated from assets minus liabilities.
86. Government uses the statement for fiscal health monitoring.
87. Assets are classified as current and non-current.
88. Liabilities are classified as short-term and long-term.
89. Statement supports budget preparation.
90. Transparency is enhanced with regular statements.
91. Auditor General reviews the statement.
92. Statement aids debt management.
93. Assets include infrastructural developments.
94. Liabilities include public debt.
95. Financial ratios can be derived from the statement.
96. Statement supports credit rating assessments.
97. Accurate valuation of assets ensures fair reporting.
98. Statement informs fiscal policy decisions.
99. Statement improves public sector accountability.
100. Statement reconciles with CRF balances.
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Responsibilities and Powers of Key Financial Officers

Accountant General

101. Oversees government accounting records.
102. Prepares public accounts.
103. Manages CRF operations.
104. Ensures compliance with financial regulations.
105. Prepares cash flow forecasts.
106. Supervises government treasury operations.
107. Maintains control over payment systems.
108. Supports financial reporting standards.
109. Advises government on financial procedures.
110. Prepares consolidated financial statements.
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Auditor General

111. Audits public accounts.
112. Reviews use of CRF funds.
113. Ensures accuracy of financial statements.
114. Detects misuse of public funds.
115. Reports audit findings to legislature.
116. Promotes financial accountability.
117. Conducts value-for-money audits.
118. Ensures compliance with legal provisions.
119. Makes recommendations for improvements.
120. Supports anti-corruption efforts.
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Minister of Finance

121. Formulates fiscal policy.
122. Oversees budget preparation.
123. Approves disbursements from CRF.
124. Manages public debt.
125. Sets tax policies.
126. Guides macroeconomic planning.
127. Coordinates with international financial bodies.
128. Approves government borrowing.
129. Reviews financial reports.
130. Promotes efficient resource allocation.
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Treasurer of Local Government

131. Manages local government funds.
132. Prepares local government budgets.
133. Ensures financial compliance at local level.
134. Oversees local revenue collection.
135. Maintains accurate local financial records.
136. Disburses funds for local projects.
137. Advises local council on financial matters.
138. Prepares financial reports for local councils.
139. Ensures timely payment of salaries.
140. Coordinates audits of local finances.
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Instruments of Financial Regulation

141. Public Finance Management Act.
142. Fiscal Responsibility Act.
143. Appropriation Acts.
144. Treasury Circulars.
145. Financial regulations manuals.
146. Audit reports.
147. Tax laws.
148. Budget guidelines.
149. Internal control systems.
150. Procurement laws.
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Calculation and Determination Topics

151. CRF = Total government revenue - approved expenditures.
152. Add taxes, grants, loans for CRF inflows.
153. Deduct approved capital and recurrent expenditure from CRF.
154. Determine asset values through valuation or appraisal.
155. Verify liabilities through creditor statements.
156. Use accrual basis for accurate CRF calculation.
157. Reconcile CRF balances with bank statements.
158. Apply depreciation to non-current assets for accuracy.
159. Conduct physical verification of government assets.
160. Confirm liabilities through audit trails.
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