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Financial Accounting Paper 2, Nov/Dec 2009  
Questions: 1 2 3 4 5 6 7 8 9 Main
General Comments

Question 3

  1. In the context of public sector accounting, explain the following:
  2. Fund;
  3. Contingency fund;
  4. Public money.
  1. State the purpose for the following:
  2. Appropriation act;
  3. Supplementary appropriation act.

Majority of the candidates attempted this question and performed badly.

3(ai)     Fund:   This is a public money set aside by Law to meet a particular government expenditure.  It may also refer to any government entity that uses public money and keeps a set of self balancing accounts.

    (aii)  Contigency Fund:  It is any public money set aside by the constitution to take care of any national disaster on unforeseen circumstances.

  (aiii)   Public Money:  It is a revenue of the government including all such money held by officers or agents of the government on behalf of that government.

3(bi)     The purpose of the Appropriation Act is to:
-           Establish statutory limit of Government expenditure.
-           ensure accountability by the Government on how to spend the revenue of the Government.

(bii)     The purpose of the Supplementary Appropriation Act is to approve additional money for the Federal Government to spend if the money approved in the main Appropriation Act is not sufficient.

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