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ICAN Public Sector Accounting and Finance 2022 past questions and answers

This 2022 ICAN Public Sector Accounting and Finance set has 20 practice questions. Try these 5 free sample questions, tap a question to reveal the answer and explanation. Then practise the whole 2022 set with instant marking.

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Sample ICAN Public Sector Accounting and Finance 2022 questions

1. A state ministry prepares its annual estimates. It allocates ₦36 million to staff salaries and ₦140 million to construct a new health centre. Which classification is most appropriate?
  1. Both amounts are recurrent expenditure because they are paid from public funds
  2. Both amounts are capital expenditure because they appear in the annual budget
  3. Salaries are recurrent expenditure; construction is capital expenditure
  4. Salaries are capital expenditure; construction is recurrent expenditure

Answer: C. Salaries are recurrent expenditure; construction is capital expenditure

Salaries support ongoing operations and are recurrent, while construction creates a long-term asset and is capital expenditure. The source of funding or inclusion in a budget does not change the economic classification.

2. A department using the IPSAS Cash Basis receives cleaning services worth ₦800,000 in December 2022 but pays the supplier in February 2023. Under the cash basis, when is the payment recorded as expenditure?
  1. In February 2023, when cash is paid
  2. In December 2022, when the services are received
  3. Half in December 2022 and half in February 2023
  4. Only when the supplier issues a final receipt after payment

Answer: A. In February 2023, when cash is paid

Under the cash basis, expenditure is recognized when cash is paid, so the outflow is recorded in February 2023. Receiving the service in December does not by itself create cash-basis expenditure.

3. A government agency receives and accepts equipment on 28 June 2022. The supplier invoices it on 5 July and is paid in August. The agency reports on an accrual basis with a 30 June year-end. What should it do at year-end?
  1. Recognize nothing until the August payment
  2. Recognize an expense only when the July invoice arrives
  3. Recognize a cash receipt because equipment was delivered
  4. Recognize the equipment and a payable at 30 June

Answer: D. Recognize the equipment and a payable at 30 June

The agency controlled the equipment and incurred the obligation when it was received and accepted before year-end. Accrual accounting does not defer recognition until the invoice or cash payment.

4. A ministry compiles its annual accrual-basis financial statements. Which information is principally presented in its statement of financial performance for the reporting period?
  1. Assets, liabilities and accumulated balances at year-end
  2. Revenue and expenses, resulting in a surplus or deficit
  3. Only cash received and cash paid during the period
  4. Approved procurement plans and tender evaluations

Answer: B. Revenue and expenses, resulting in a surplus or deficit

A statement of financial performance reports revenue and expenses for a period and the resulting surplus or deficit. Assets and liabilities at a particular date belong in the statement of financial position.

5. A ministry invites tenders for laboratory equipment. Bid X has the lowest quoted price but fails a mandatory technical requirement; Bid Y is the next-lowest price and meets all disclosed requirements. Assuming the evaluation rules permit award to the lowest evaluated responsive bidder, which bid should be recommended?
  1. Bid X, because public procurement must always select the lowest quoted price
  2. Neither bid, because a higher-priced tender can never be selected
  3. Bid Y, because it is the lowest evaluated responsive tender
  4. The bid from the supplier with the longest relationship with the ministry

Answer: C. Bid Y, because it is the lowest evaluated responsive tender

A tender must satisfy the stated mandatory requirements to be responsive; the lowest price alone is not sufficient. Bid Y is the lowest evaluated tender among those that meet the disclosed requirements.

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