Accounting Q&A · Government Accounting · Topic 7
Practise 25 government accounting questions on statement preparation and consolidation using five worked public-sector cases. Try each answer before revealing it. The cases are illustrative. Check the applicable reporting framework and local budget rules.
Assets are 900,000 and liabilities 650,000
1. What should the accountant establish?
Calculate net assets of 250,000.
2. What evidence should be obtained?
Obtain the trial balance and supporting schedules.
3. What calculation or procedure would help?
Reconcile the statement of financial position to the ledger.
4. What limitation or alternative matters?
Unrecorded liabilities can overstate net assets.
5. What should happen next?
Review adjusting entries before release.
A public entity reports a surplus but cash falls
6. What should the accountant establish?
Explain the difference between performance and cash flows.
7. What evidence should be obtained?
Gather accrual adjustments, collections and capital spending.
8. What calculation or procedure would help?
Reconcile the result to cash movements under the applicable presentation.
9. What limitation or alternative matters?
A surplus does not establish an increase in cash.
10. What should happen next?
Explain significant non-cash and timing effects.
A controlled agency owes its parent 45,000
11. What should the accountant establish?
Eliminate the matched internal balance in consolidated statements.
12. What evidence should be obtained?
Obtain both entity ledgers and the reporting boundary.
13. What calculation or procedure would help?
Match reciprocal balances and investigate timing differences.
14. What limitation or alternative matters?
An external balance must remain in group reporting.
15. What should happen next?
Record a documented consolidation elimination.
An agency’s original and final public budgets differ
16. What should the accountant establish?
Explain material changes and comparisons on the budget basis.
17. What evidence should be obtained?
Obtain the approved versions and comparable actuals.
18. What calculation or procedure would help?
Reconcile actual amounts to financial statements where required.
19. What limitation or alternative matters?
Budget scope and accounting basis may differ.
20. What should happen next?
Disclose significant differences and their causes.
A fleet register shows 120 vehicles but only 114 are confirmed
21. What should the accountant establish?
Assess completeness and existence of records.
22. What evidence should be obtained?
Collect register, disposal approvals and physical inspection results.
23. What calculation or procedure would help?
Trace each unmatched vehicle to transfers or disposal records.
24. What limitation or alternative matters?
Non-location alone does not establish theft.
25. What should happen next?
Correct supported differences and disclose limitations as applicable.