Bahir Dar University

College of Business & Economics

Department of Accounting & Finance
Academic Year: 2024 Semester I
Accounting for Public Sector & Civil Society Course Code: AcFn3071
Total Weight: 40% Time allotted: 90 minutes.
Name of Student:_______________________________ ID/No.________________
Part I. Choose the best answer and write the letter of your choice in the space provided (1.5
pt. each)

_____1) Governmental units do not use fund accounting for what?

a) to demonstrate compliance with laws b) to comply with regulations
c) to report to equity holders d) to comply with agreements
_____2) Which one of the following comprises the GPFS and that must be included in the
financial section of CAFR except:
a) statement of owner’s equity b) Combined Balance Sheet
c) Combined statements of revenue; expenditures and charges in fund balance
d) Combined statement of cash flows for all proprietary fund types
_____3) The combined balance sheet is prepared for all governmental funds including?
a) general fund b) capital project fund
c) special revenue fund d) all
_____4) The combining balance sheet is a balance sheet prepared for what?
a) general fund b) capital project fund
c) special revenue fund d) all
_____5) interim statements of governments are not designed primarily to meet the needs of:
a) chief executive b) board of directors
c) departmental supervisors d) budget examiners.
_____6) Which one of the following is wrong about interim financial reports?
a) they reflect current financial position
b) they compare actual financial results with budgetary estimates
c) they are just issued on an annual basis
d) they are prepared primarily for internal use.
_____7) What fund is collected form general revenues or from the sale of bonds?
a) special revenue fund b) capital project fund
c) general fund d) debt service debt
_____8) Which one of the following is a typical source of financing capital projects?
a) long-term debt b) grants form other governmental units
c) transfers form other funds d) all
_____9) Which one of the following is not revenue, and is presented as other financing sources
in the financial statements?
a) special tax b) gift c) long-term debt proceed d) investment interest e) all

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_____10) Any operation that is financed, at least in part, by outside user charges is classified as
what?
a) enterprise fund b) internal service fund c) proprietary fund d) all
_____11) What is is used to account for any operation that provides service to another
department or agency within the government on a cost reimbursement basis
a) enterprise fund b) internal service fund c) proprietary fund d) all
_____12) IPSAS – 9 applies to revenue arising from which of the following transactions and events:
a) the sale of goods b) the rendering of services
c) the use of other entity’s assets yielding interest, royalties and dividend
d) all of the above
_____13) When is royalty recognized?
a) on a time proportion basis that takes into account the effective yield on the asset
b) as they are earned in accordance with the substance of the relevant agreement
c) when the shareholder’s or the entity’s right to receive payment is established.
d) none
_____14) As per IPSAS-12, for interchangeable items, cost is determined by:
a) FIFO method b) LIFO method
c) weighted – average method d) FIFO or weighted – average method
_____15) As per IPSAS-14, dividend proposed or declared after a reporting date:
a) shall be recognized as a liability b) shall not be recognized as a liability
c) shall be recognized as reserve d) shall be recognized as asset
_____16) When is dividends or their equivalents recognized?
a) on a time proportion basis that takes into account the effective yield on the asset
b) as they are earned in accordance with the substance of the relevant agreement
c) when the shareholder’s or the entity’s right to receive payment is established.
d) none
_____17) What are relatively simple to prepare, administer and understand?
a) flexible budget b) fixed budget c) general budget d) special budget
_____18) What are more realistic when formal budgetary control is not deemed essential?
a) flexible budget b) fixed budget c) general budget d) special budget
_____19) What are the objectives of expenditure approach?
a) it has an expenditure control orientation.
b) it is the popular basis for legislative control over the executive branch.
c) it is the popular basis for executive control over the legislative branch
d) a & b e) all
_____20) What approach to budgeting incorporates basis of expenditure classification such as character
and object class?
a) Zero-based budgeting b) program budget
c) Participatory budgeting d) Performance-based budgeting

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Part II. Provide Precise & Brief Explanation to the following questions (2 points
each)

1. Compare and contrast the major budget components of the estimated revenues.

2. Discuss the major classification of revenues, expenditures and financing in Ethiopia federal
Government

3. Explain the phases in a budget cycle and the type of activities done under each phase.

4. Discuss the advantages and criticisms forwarded against the object of expenditure approach to
budgeting.

5. Distinguish between Quasi External transaction and external transaction as well as operating
transfers and residual equity transfers