PassSpark

ICAN Public Sector Accounting and Finance 2024 past questions and answers

This 2024 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 2024 set with instant marking.

Practise the full 2024 setTimed exam mode

Sample ICAN Public Sector Accounting and Finance 2024 questions

1. A state ministry has a valid appropriation for administration and another for primary healthcare. Midway through the year, the healthcare vote is short while the administration vote has an expected surplus. What is the proper budget-control response before transferring funds between the votes?
  1. Borrow the amount from a commercial bank and leave both appropriations unchanged.
  2. Obtain the approval required under the applicable virement rules before reallocating the appropriation.
  3. Spend against the healthcare vote first and seek retrospective approval only if the annual accounts show an excess.
  4. Move the funds to an off-budget account so that the original votes remain intact.

Answer: B. Obtain the approval required under the applicable virement rules before reallocating the appropriation.

A virement changes the approved allocation between votes and must follow the applicable authorization process before expenditure. Borrowing, retrospective approval, or off-budget spending does not regularize an unauthorized transfer.

2. A local authority prepares its new annual estimates by taking each prior-year line as a base and adjusting it for inflation and known service changes. Which budgeting approach is it using?
  1. Zero-based budgeting, which requires every activity to be justified from a zero base.
  2. Performance budgeting, which allocates resources by measured outputs and outcomes.
  3. Programme budgeting, which groups expenditure around programmes and objectives.
  4. Incremental budgeting, which adjusts the previous period's budget.

Answer: D. Incremental budgeting, which adjusts the previous period's budget.

Incremental budgeting uses the existing budget as its starting point and applies adjustments. Zero-based budgeting would require activities to be justified anew rather than carried forward as a base.

3. A ministry's annual budget previously listed only input lines such as fuel, travel and equipment. For the next budget, the ministry wants legislators to see the service results expected from each allocation. Which approach best meets that objective?
  1. Performance budgeting, linking resources to defined outputs or outcomes.
  2. Cash budgeting, listing only the timing of receipts and payments.
  3. Incremental budgeting, carrying forward prior-year allocations with adjustments.
  4. Line-item budgeting, retaining the same input-based presentation.

Answer: A. Performance budgeting, linking resources to defined outputs or outcomes.

Performance budgeting connects allocations with specified outputs or outcomes, making expected service results visible. A cash or line-item presentation alone does not establish that link.

4. A government laboratory completes and certifies a testing service for another public entity on 20 December. It invoices the entity on 5 January and receives cash in February. Under the accrual basis, when should the service revenue normally be recognized, assuming it is measurable and no other recognition condition remains unmet?
  1. In February, when the cash is received.
  2. In January, when the invoice is issued.
  3. In December, when the service is completed and earned.
  4. Only when the annual budget is approved for the next year.

Answer: C. In December, when the service is completed and earned.

Under accrual accounting, revenue is recognized when earned and the applicable recognition criteria are met, here in December. Receipt-based recognition would instead follow the cash date.

5. A public hospital's employees earned ₦8,400,000 in December, but payroll was not paid until 10 January. The hospital reports on an accrual basis. What should it record at 31 December for this payroll?
  1. No entry until January because no cash has left the bank.
  2. A December employee-benefit expense and an accrued liability of ₦8,400,000.
  3. A December cash payment of ₦8,400,000 and no liability.
  4. A prepaid expense because payroll was paid after year-end.

Answer: B. A December employee-benefit expense and an accrued liability of ₦8,400,000.

The employees provided service in December, so the expense and related payable are recognized in that period under accrual accounting. Deferring recognition until payment would apply a cash-timing rule instead.

More ICAN Public Sector Accounting and Finance years

2026202520232022

All ICAN Public Sector Accounting and Finance years · ICAN subjects

PassSpark questions are original practice questions written to each exam's syllabus and format, in the style of past questions. They are not official past papers and are not affiliated with JAMB, WAEC, NECO, any university or any exam body.