Government Accounting · Topic 2

Cash vs Accrual Government Accounting Quiz

Work through 25 multiple-choice questions, one at a time. Submit each answer for feedback. At the end, review your score and see which concepts to revisit.

Review the Q&AGovernment Accounting quiz path
1. A vendor delivers 12,000 of supplies in March and is paid in April. Which concept best fits this case?
2. An agency pays 6,000 in December for insurance entirely covering the following year. Which concept best fits this case?
3. A public service collects outstanding prior-year fees this year. Which concept best fits this case?
4. A ministry makes a 500,000 cash purchase of a building that meets recognition criteria. Which concept best fits this case?
5. An agency owes wages earned before year-end and has not paid them. Which concept best fits this case?
6. A vendor delivers 12,000 of supplies in March and is paid in April. What is the most appropriate next step?
7. An agency pays 6,000 in December for insurance entirely covering the following year. What is the most appropriate next step?
8. A public service collects outstanding prior-year fees this year. What is the most appropriate next step?
9. A ministry makes a 500,000 cash purchase of a building that meets recognition criteria. What is the most appropriate next step?
10. An agency owes wages earned before year-end and has not paid them. What is the most appropriate next step?
11. A vendor delivers 12,000 of supplies in March and is paid in April. Which evidence is most directly useful?
12. An agency pays 6,000 in December for insurance entirely covering the following year. Which evidence is most directly useful?
13. A public service collects outstanding prior-year fees this year. Which evidence is most directly useful?
14. A ministry makes a 500,000 cash purchase of a building that meets recognition criteria. Which evidence is most directly useful?
15. An agency owes wages earned before year-end and has not paid them. Which evidence is most directly useful?
16. A vendor delivers 12,000 of supplies in March and is paid in April. Which conclusion is best supported?
17. An agency pays 6,000 in December for insurance entirely covering the following year. Which conclusion is best supported?
18. A public service collects outstanding prior-year fees this year. Which conclusion is best supported?
19. A ministry makes a 500,000 cash purchase of a building that meets recognition criteria. Which conclusion is best supported?
20. An agency owes wages earned before year-end and has not paid them. Which conclusion is best supported?
21. A vendor delivers 12,000 of supplies in March and is paid in April. Which shortcut would most directly undermine the work?
22. An agency pays 6,000 in December for insurance entirely covering the following year. Which shortcut would most directly undermine the work?
23. A public service collects outstanding prior-year fees this year. Which shortcut would most directly undermine the work?
24. A ministry makes a 500,000 cash purchase of a building that meets recognition criteria. Which shortcut would most directly undermine the work?
25. An agency owes wages earned before year-end and has not paid them. Which shortcut would most directly undermine the work?
Show the answer key
  1. Accrual liability The expense or asset and liability can arise before cash payment.
  2. Prepaid expense Payment precedes consumption of the service.
  3. Cash collection of a receivable Collection need not create current-year accrual revenue.
  4. Capital asset recognition Cash outflow and annual depreciation measure different events.
  5. Basis comparison The two bases can report the same event in different periods.
  6. Recognize the payable in March under accrual accounting The expense or asset and liability can arise before cash payment.
  7. Record a prepayment under accrual accounting and expense it over the coverage period Payment precedes consumption of the service.
  8. Reduce the existing receivable and increase cash Collection need not create current-year accrual revenue.
  9. Capitalize the building and recognize depreciation over its useful life under accrual accounting Cash outflow and annual depreciation measure different events.
  10. Record the wages in the earning period on accrual books and at payment under a pure cash basis The two bases can report the same event in different periods.
  11. Accepted goods receipt and unpaid invoice Recognize the payable in March under accrual accounting.
  12. Policy dates and payment voucher Record a prepayment under accrual accounting and expense it over the coverage period.
  13. Opening receivables listing and matched receipts Reduce the existing receivable and increase cash.
  14. Purchase agreement, asset register and useful-life assessment Capitalize the building and recognize depreciation over its useful life under accrual accounting.
  15. Timesheets, payroll cutoff and payment date Record the wages in the earning period on accrual books and at payment under a pure cash basis.
  16. The expense or asset and liability can arise before cash payment Accepted goods receipt and unpaid invoice can support that assessment.
  17. Payment precedes consumption of the service Policy dates and payment voucher can support that assessment.
  18. Collection need not create current-year accrual revenue Opening receivables listing and matched receipts can support that assessment.
  19. Cash outflow and annual depreciation measure different events Purchase agreement, asset register and useful-life assessment can support that assessment.
  20. The two bases can report the same event in different periods Timesheets, payroll cutoff and payment date can support that assessment.
  21. Deferring every March delivery entry until cash is paid The expense or asset and liability can arise before cash payment.
  22. Treating the entire payment as a December accrual expense Payment precedes consumption of the service.
  23. Recognizing the same earned revenue a second time on collection Collection need not create current-year accrual revenue.
  24. Treating all capital acquisition cash as current accrual expense Cash outflow and annual depreciation measure different events.
  25. Assuming the cash statement alone shows all wages owed The two bases can report the same event in different periods.

These are hypothetical examples. Local reporting frameworks and budget rules vary. IPSASB standards and pronouncements