MUSLIM UNIVERSITY OF MOROGORO

FACULTY OF BUSINESS ADMINISTRATION

BACHELOR OF BUSINESS ADMINISTRATION
COURSE NAME : PUBLIC SECTOR ACCOUTING
COURSE CODE: BAC 205
COURSE INSTRUCTOR: Madam Mariam
NAME REGISTRATION NUMBER

ASHIRAFU SHABAN MUM2022-04-07940

LUWOGO
MIKA PIUS NIKOLAUS MUM2022-04-07337

SALIM A SAID MUM2022-04-07920

QUESTION

Discuss accounting concepts which are applicable in Public sector only

 Public sector accounting
is the process of recording, classifying, summarizing, analyzing, interpreting
government financial statement and statistics in aggregate a long with the details
and communicating the results thereof to person interested in such information.

Accounting concept

are rules of accounting that should be followed in preparation of all accounts

and financial statements.
The following are the accounting concept employed in the public sector
accounting only

 Budgetary accounting

The objective of public sector accounting is to portray the stewardship of the

management on scarce and resources entrusted to them by the public. To achieve this,
an approved budget becomes the basis of the accounting system to ensure that the
approved budget is implemented fully.
 Cash basis of accounting

The cash basis measures cash flow at the time those flows actually take place. The
cash basis accounting reports do not produce the statement of financial positions
of the government and therefore asset and liability are charged to income and
expenditures.

 Modified accrual basis of accounting

In this system, only revenue is accrued when earned while payments throughout
are not continually accrued. However, at the year’s ends all unpaid invoices will
be consolidated are accrued accordingly in the financial reports
 FUND ACCOUNTING

Fund is defined as a sum of money or other resources segregated for purpose of

carrying out specific activities or ascertaining certain objectives in accordance
with the specific establishment. Such as Constitutions Statute or Ordinance by
appropriate action by legislature or administrative branch of the government.

Objective of the Funds include

I. Ensuring compliance with budgetary spending limit

II. Providing a basis of control for compliance with legal requirement
III.Ensuring the financial position of the organization funds
IV. Showing the result of operation of the organization
Types of Funds

The number and type of fund created depends on the nature and volume of activities
and the degree of control desire, in this case, there are three classes of fund namely;

1.Government funds

These are funds that are accumulated by the government and based in spending of
resources to provide the public with day-to-day basic services.

Government funds my father be subdivided into the following

General fund. This is a most significant fund maintained by central and local
government. This fund keeps a record of many of the central and local government
most important transaction and also serves as residual fund account which will
record revenues and expenditure not record in other type of funds
Special Fund. These are ring-fenced funds where the proceeds of a specific source of
revenue are accounted for and legally restricted to expenditure on specific purposes.

Capital Fund. These are funds that are to be used for the acquisition or construction of
major capital facilities such as construction of roads, bridges, hospital etc.

Debt service funds: these are funds that are to be used to account for the accumulation
of resource and payment of government long term loans and interest accrued on those
loans.

Special Assessment Funds: these are funds used to account for financing of public
improvement or service deemed to benefit properties against which special assessment is
levied.
2.Proprietary Funds

Proprietary funds are used when the government unit handles its operations in a
manner similar to that of the business enterprise. Activities that use appropriators fund
accounting and reporting do charge fees for services and focused on determining the
operating income and changes in net asset. Example TANESCO and DAWASCO

3.Fiduciary Funds

These funds used to account for assets held by the government in a trust or agency in a
private organization or other government organization. This includes trust funds,
agency funds, pension funds etc. that may be held in National Health Insurance fund,
TASAF etc.
CONCLUSION
Therefore, those are accounting concepts which are added in public
sector so as to perform well in the preparation of financial statements
by considering their objective is to provide service and not to gain
profit .