Accounting Q&A · Government Accounting · Topic 1
Practise 25 government accounting questions on public resources and accountability 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.
A health agency buys mobile clinics with public funds
1. What should the accountant establish?
Explain how resources were used to deliver a public service.
2. What evidence should be obtained?
Collect procurement approvals, invoices and deployment records.
3. What calculation or procedure would help?
Trace spending to the asset register and service locations.
4. What limitation or alternative matters?
The purchase amount does not establish service outcomes.
5. What should happen next?
Report financial use alongside delivery measures.
A ministry receives a budget allocation of 900,000 and pays 720,000
6. What should the accountant establish?
Distinguish authority to spend from actual payments.
7. What evidence should be obtained?
Obtain the approved budget and payment ledger.
8. What calculation or procedure would help?
Reconcile the 180,000 difference on a comparable basis.
9. What limitation or alternative matters?
Unpaid commitments can account for part of the balance.
10. What should happen next?
Explain commitments and any carry-forward rules.
A public entity owns a flood barrier that generates no fees
11. What should the accountant establish?
Assess whether it provides service potential.
12. What evidence should be obtained?
Collect ownership or control evidence and engineering records.
13. What calculation or procedure would help?
Identify the reporting framework and applicable recognition criteria.
14. What limitation or alternative matters?
Absence of fees does not remove public service potential.
15. What should happen next?
Document recognition and measurement conclusions.
A ministry transfers cash to an agency within the same reporting group
16. What should the accountant establish?
Separate entity-level accounting from consolidated reporting.
17. What evidence should be obtained?
Obtain both ledgers and identify the consolidation boundary.
18. What calculation or procedure would help?
Match the transfer and remove internal amounts where required.
19. What limitation or alternative matters?
An entity outside the group needs separate treatment.
20. What should happen next?
Reconcile elimination entries and group totals.
Residents ask why service delays rose while spending fell
21. What should the accountant establish?
Distinguish financial performance from service outcomes.
22. What evidence should be obtained?
Gather spending, demand and waiting-time data.
23. What calculation or procedure would help?
Compare like periods and examine which services changed.
24. What limitation or alternative matters?
Lower spending can coincide with lower capacity or quality.
25. What should happen next?
Explain the trade-off with evidence and limitations.