QUESTION ONE

You are the accountant at Ministry of Works and Supply and have taken note of the following events concerning the organisation of the Youth Day event for 2021:

January 18 Committee of Youth Day meeting.

January 20 Department of Buildings at Ministry of Works and Supply receives purchase order of K8, 000 from

Cabinet Office to carry out maintenance works of the proposed venue for the event.

January 21 Procurement Committee at Ministry of Works and Supply approves

request of K3, 000 from Director Buildings to procure supplies.

January 25 Chief Procurement Officer approves purchase of supplies on account for K3, 000.

January 29 Buildings Department start maintenance works at the proposed venue.

February 8 Committee of Youth Day meet to review progress on preparation of

Youth Day Event

February 19 Buildings Department complete works at the proposed venue and invoice Cabinet office K8, 000

February 26 Buildings Department pays K3, 000 for supplies got on account

March 12 Youth Day event official opened by Vice President.

March 16 Cabinet Office pays Buildings Department K8, 000 by cheque.

Required:

(i) Between Accrual Accounting and cash accounting, select the accounting basis appropriate for recording the above events. Why do you think your selected basis is appropriate? [10 marks]

(ii) From the events listed above show how you would record Revenue & Expenditure in the books of Ministry of Public Works and Supply in the Months January to March 2018.

1. Using Cashing accounting [10 marks]

2. Using Accrual accounting [10 marks]

NOTE: Using your own format of a statement and indicate the surplus (difference). Transactions must be clearly dated.

[30 marks]