TEST PSA522 JUNE 2021 - ....................... PDF

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UNIVERSITI TEKNOLOGI MARATESTCOURSE : PUBLIC SECTOR ACCOUNTINGCOURSE CODE : PSA 522EXAMINATION : JUNE 2021TIME : 2 HOURSINSTRUCTIONS TO CANDIDATES This question paper consists of two (2) parts: MCQ (20 Questions) TRUE/FALSE (20 Questions) Answer ALL questions in the Answer Template Do not bring any ...

Description

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UNIVERSITI TEKNOLOGI MARA TEST

COURSE

:

PUBLIC SECTOR ACCOUNTING

COURSE CODE

:

PSA 522

EXAMINATION

:

JUNE 2021

TIME

:

2 HOURS

INSTRUCTIONS TO CANDIDATES 1.

This question paper consists of two (2) parts:

2.

Answer ALL questions in the Answer Template

3.

Do not bring any material into the examination room unless permission is given by the invigilator.

4.

Please check to make sure that this examination pack consists of: i) ii)

5.

MCQ (20 Questions) TRUE/FALSE (20 Questions)

the Question Paper an Answer Booklet – provided by the Faculty

Answer ALL questions in English.

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO

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ANSWER AT THE ANSWER TEMPLATE. MAKE SURE TO WRITE YOUR NAME AND MATRIKS NO AT THE ANSWER TEMPLATE

MULTIPLE CHOICE QUESTIONS 1.

Budget is a detailed plan that shows the financial consequences of an organisation operating activities for a specific future period. Which of the followings does not indicate a good budget? a. b. c. d.

2.

It should be based on established standards of performance It should be flexible and allow for any changing circumstances It should be prepared by the top-level management Analysis of cost and revenue being done base on departments or cost centre

Using fiscal policy, government can stabilise the economy by adjusting its expenditure and taxation level. Which of the following situations indicate the use of contraction fiscal policy? a. When the economy is in downturn, the government will reduce the tax charge to enable public to spend more cash. b. The government tend to balance the total spending to tax revenue. c. The existing national budget will reduce due to surplus of budget. d. There will be an increase in national debt due to issuance of long-term debt and outstanding interest payment.

3.

Central agencies are responsible in handling the preparation of budget before it can be submitted to the parliament. Which of the following that is not under the responsibility of Public Service Department? a. b. c. d.

4.

To determine the career development. To formulate and clarify policy on the human resource matters. To determine organisational size and structure of the public agencies. To ensure the allocation of federal resources is in line with the national objective and policy.

Budget preparation process is very crucial is an integral part of financial and fiscal management. Which of the following activities not describing the correct preparation of budget process? a. The agency that received circular from Treasury will instruct various department to prepare the budget input. b. The Minister of Finance, Bank Negara Governor and their official will attend annual meeting with World Bank and International Monetary Fund to get feedback on the current world’s condition.

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c. The Oversight Committees will ensure that public monies are properly spent in various public sector organisations and assess the level of compliance with the government’s rule. d. Once the budget hearing is completed, the Budget Review Officers will present the recommendation expenditure estimates to Budget Director for his consideration before being submitted to Minister of Finance.

5.

Economic Planning Unit (EPU) is responsible for preparation of development plan for the nation. Which of the following that does not indicate the responsibility of EPU in relation to Malaysia 5-year development plan? a. To examine, review and recommend fund allocations for programmes. b. To manage grants allocated to the states and local authorities base on decision by the Cabinet. c. To re-assess overall progress of development programmes during mid-term reviews and determine whether it in line with national objectives. d. To issue a call circular to all agencies requesting submission of their proposal development programmes before the 5-year Malaysia Plan ended.

6.

Which one of the following is not part of the budgetary control process? a. b. c. d.

7.

Corrective action must be taken by management. Head of departments are accountable for all their decisions. The differences between actual and budget amounts must be examined. Managers are not required to report to the appropriate authority of any changes in the expected outcomes.

The purpose of classifying the codes of expenditures is: a. To fulfil the needs of the accounting system implemented by the Auditor General Office. b. To fulfil the needs of the Inland Revenue Board. c. To simplify the process of recording and preparation of periodical reporting. d. To simplify the process of purchasing.

8.

The reasons for reconciliation of Vote book include the following EXCEPT: a. To detect any unauthorized payment. b. To ensure the accuracy of income and expenditures recorded in the Vote book. c. To control the expenditures and liabilities with the authorized allocation. d. To detect error in posting transactions at the Accountant General Department level.

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9.

The accounting personnel whom responsible to prepare the Financial Statement of Federal Government is: a. b. c. d.

Accounting Officer Controlling Officer Accountant General Auditor General

10. The following are the financial statements to be prepared in accordance with Section 16(1) of the Financial Procedure Act (FPA) 1957, EXCEPT: a. b. c. d.

A Statement of Assets and Liabilities of the Federation or State A Statement of Separate Fund established under Article 97(3) A Statement of Trust Account A Statement of Trust Account for any trust fund under Section 10 of FPA, 1957

11. Notes to the Financial Statements include further explanations, detailed scheduled of amounts shown in the financial statements and the accounting policies and practices. One of it is: a. The financial statements are prepared on the same basis as the budget to enable comparison to be made. b. The financial statements serve as an important instrument of accountability. c. The financial statements are to demonstrate compliance with legal and contractual provisions. d. The financial statements help to satisfy the needs of users.

12. Among the objectives of financial reporting is: a. To establish the general framework for the control of public expenditures by the legislators. b. To assess capability and capacity of government organizations to provide high quality products and services. c. To enhance accounting and financial management system for all government agencies. d. To ensure effective and prudent financial management.

13. The following are the accounting concepts that applicable to the public sector: a. b. c. d.

Entity, Going concern and Historical cost. Periodicity, Going concern Historical cost Materiality, Accrual and Matching. Matching, Entity and Periodicity.

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14. The introduction of accrual accounting basis is to replace the cash accounting, which the reason of the shifting is because of a. Requested by many government stakeholders. b. Cash accounting is difficult to clear all the transactions during the particular year and causes a huge spending that result in high risk of fraud. c. Cash accounting is simple compared to accrual accounting because accrual accounting required more rules to follow. d. Cash accounting is not allowed to be practiced in the accounting system because it does not comply with matching concept.

15. Under which accounting basis, ‘a decreases in economic benefits or service potential during the reporting period in the form of outflows or consumption of assets’ is recognized as expenses a. b. c. d.

Cash basis Modifies cash basis Modified Accrual Accrual basis

16. The accountant General’s Department has started to develop Malaysian Public Sector Accounting Standards Board (MPSASs) to be applied in the preparation of financial reports of all public sector entities in Malaysia align with the adoption of accrual accounting. The development of the MPSASs is in pursuit the objective of a. To enhance public accountability and transparency. b. To compete with other countries in term of high accounting standards for public sector entities. c. To align with other government agenda. d. To meet the demand of many public agencies in having our own standards.

17. The migration of Government Financial and Accounting Management System (GFMAS) to iGFMAS, which is an integrated centralized accounting system to further develop accrual accounting at the national level. The objectives of iGFMAS include a.

To further strengthen the government’s utilization of resources to the maximum level. b. To account for government revenue collections so that government can shift to become profit making organization. c. To enhance financial transparency and accountability in the public sector. d. To enhance public servant skills and productivity for their promotion purposes.

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18.

Following are correct about the differences between cash accounting and accrual accounting except a.

b. c.

d.

Under cash accounting, the expenses are recognized when there is an outflow of cash in reality. Under the accrual method, the expenses are reported when they are incurred. Accrual accounting is simple compared to the cash because there are more rules to follow when implementing it. In cash accounting, the cash flow demonstrates the financial performance of organization, the lower the cash inflow, the lower the financial performance of an organization. Meanwhile, accrual accounting takes into account economic effects such as appreciation of assets. In cash accounting, the income or expense is recognized when there is an inflow of cash in reality. Under the accrual method, the revenue is recorded when it is earned.

19. The objectives of Financial Accounting System include the following EXCEPT: a. Produces relevant financial information about past and present transactions of government. b. Serves as basis for decision making for future operations. c. Creates the public accountability. d. Improve allocation of resources to government programmes via the budget process.

20. Treasury Instructions No 92 to 110 (TI92 to TI110) govern the payment system of government agencies which include:

a. Upgrade the quality of cash management. b. Improve central and branch government agencies. c. Improve government agencies payment system. d. All of the above

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TRUE/ FALSE QUESTIONS 1. Budget process cycle is very crucial in government operation. Having good monitoring process will enable all units to achieve the target set up at planning stage is one of the importance factors at co-ordination stage. 2. Operating expenditure represents all charges over the allocation of budget. Types of expenditure that require submission and approval by the parliament is known as operating expenditure. 3. As a non- profit organization, public sector accounting system is not expected to inform its profit and loss but rather to disclose how public moneys and public stores have been used for that purpose. 4. A crucial element of budgetary control is that the real outcomes are compared to the estimates and are continually examined for clarification or modification, depending on the outcome. 5. Detailed budget hearings examine the justifications given for the estimates proposals and the implications to ensure that annual budget proposals conform to the 5-year development plan. 6. Accounting system must be designed in a manner that will facilitate effective audit. 7. The reason for maintaining the vote book is to control and ensure that expenditure and liabilities exceed the approved allocation 8. The recording of petty cash transactions must be separated from the main cash book to ensure efficiency in job division. 9. The vote book is used for recording allocation of fund received, expenditures, liabilities and changes in budget. 10. Treasury Instruction 41 (TI41) provides that no codes of expenditures can be created without the permission by Treasury or State Financial Authority 11. One of main components of Federal Government Financial Statements is Statement of Cash Flows.) 12. Investors and vendors group of users are interested to obtain information on the utilization of fund and moneys by the public sectors so that they can make decisions relating to business risks and opportunities in government projects and contracts. 13. The financial statements have been prepared using Ringgit Malaysia (RM), transactions in foreign currencies have been translated into RM or the rates of exchange as specified in the relevant policies. 14. Statement of Memorandum Accounts is a statement that shows the recoverable loans, investments, public debts and other liabilities.

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15. In accordance with the cash basis of accounting, only investments held for revenue and specified trust accounts are disclosed in the Statement of Financial Position.

16. The adoption of different basis of accounting amongst Malaysian public sector has resulted in different accounting standards and accounting system being used. 17. Treasury Circular No. 4 in 2015 has stipulated that all reporting entities in the Malaysian public sector are expected to produce a financial statement prepared using an accrual accounting basis for the first time in financial year 2015. 18. In accrual-based accounting revenues and expenses are recorded in full, even though partial payments may be made over extended time periods 19. It is difficult to provide depreciation for public sector assets due to the fact that the assets acquired for community benefits are usually large, have long life and are not capable of being subdivided for ready disposal. 20. During the period of rising prices, an organisation’s profit merely indicates the excess of the initial capital invested by the organisations. Thus, the accrualbased income state statement may be acceptable as a method to measure performance.

END OF QUESTION...