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WAEC Financial Accounting 1998 Question 50

Question 50

Public Sector Accounting

Which of the following is true in Public Sector Accounting? Cost of assets is

  1. A.depreciated on straight line method
  2. B.depreciated on reducing balance method
  3. C.expensed in the year of purchase
  4. D.charged to Federation Account.
  5. E.not recognized in any form.
Show the answer and explanation

Answer: C (expensed in the year of purchase)

Explanation

Government cash accounting treats the cost of an asset as spending in the year it is bought; no depreciation is charged.