ADMAS UNIVERSITY BISHOFTU CAMPUS

Course Title – Ethiopian Gov’t Accounting

TITLE: GROUP ASSIGNMENT 2
GROUP MEMBERS
S.No NAME ID SECTION DIVISION DEPT.
1
2
3
4
1.

Submitted to Instructor: Abebe Teka

June 10, 2020 G.C.

INSTRUCTIONS
NB: Read duly the following instructions and act as per requirements.
o This is a group assignment. Thus, copy and paste from other groups will result in zero values.
o You must use either MS-word or PDF format for your answers. Other forms may not to be
welcomed. In particular images using cell phone be considered at your risk.
o You must send your work using telegram via cell phone: 0931298731 only using private
telegram account for telegram users are welcomed. You cannot send via your (students)
group telegram.
o Otherwise non- telegram user may submit in person using hardcopy to your respective
department. Those who are willing to submit with hardcopy should make sure that their
handwriting is legible. Please any other way of submission is not welcomed.
o Your final submission date is on June 20/06/2020. You can submit before the due date. I
highly value your punctuality as part of your assignment. Thus, late submission may result in
1% punishment per delay for each day. But the submission date by no means extends
beyond June 22/06/2020.
o Neatness and clarity have its own value!

Stay Safe!

Questions:
Part I. Multiple choices
1. The controlling account maintained for expenditure items helps:
a. To keep the General Ledger in balance and provide a control over the accuracy of the
recording in the associated Subsidiary Ledgers.
b. to provide information on total expenditures by item of expenditure
c. to provide information on total expenditures by type of budget for the accounting
unit.
d. All of the above
e. None of the above
2. Accounts in the Subsidiary Ledger provide information on:
      a. total expenditures by type of budget managed by the accounting unit
b. item of expenditure for each BI managed by the accounting unit
c. A and B
d. all of the above
Answer D
3. Revenue is required to be reported at the level of:
a. Public body
b. Budgetary institution
 c. Reporting Entity
d. Accounting unit
e. None of the above
Answer D
4. A Subsidiary Ledger is not maintained for items of revenue, because:
a. there is no need of management control on revenue
b. there is no reporting requirement at the level of each BI
c. revenue is not budgeted
d. revenue is not recognized at the BI level
e. all of the above
5. Where total net cumulative debit or credit balance for all Ledger Cards in the subsidiary
Ledger is not equal to the net cumulative debit or credit balance on the respective control
account's Ledger Card in the General ledger, an error exists. Which one is the possible error?
a. Different amounts are transcribed to the general and subsidiary ledger
b. Entry is posted to the wrong side on the subsidiary ledger or controlling account
c. Arithmetic error in computing the account balance in controlling account
d. All of the above
e. None of the above
Part II. Short answers
1. List and explain the two types of ledgers that are maintained in the FGE accounting
system?

General Ledger and Subsidiary ledgers

The process used in the general Ledger and in the subsidiary ledgers are the same for all FGE
registers, regardless of whether the transactions involve domestic or foreign currency

General Ledger
• A ledger card is maintained for every account code recorded in the register.
• The aggregate of all such ledger card is the general ledger.
• The General ledger is a set of self balancing Ledger cards because at all times the total
debits and the total credits recorded in the general ledger is equal.
• And a general ledger account is an account or record used to sort and store balance sheet
and statements of revenue expenditure transactions.
Purpose
 The general ledger is maintained to classify information recorded in the register by
respective account codes.
 All transactions amounts recorded in the register are entered on ledger cards in the
General ledgers.
 The balances for all individual accounts are maintained in the General ledger.
  Because the general ledger serves as a basis to prove that the net cumulative debits and
credit balances of all accounts are equal, the general ledger simplifies and improves the
report generation process.
Maintenance
• The accountant maintains the general ledger for each register.
• Where more than one BI shares the same bank account, the accounting unit maintains one
register and one general ledger for the bank account.
• A system of control account in the general ledger and supporting subsidiary ledgers is
used to maintain sufficient account balances detailed to facilitate management reporting
requirements

Subsidiary ledgers
 A subsidiary ledger is a ledger designed for the storage of specific types of accounting
transaction 
 A control account is an account in the general ledger that maintains the total balances of
all related accounts in a subsidiary ledger.
 A subsidiary ledger that is separate from the general ledger and contains transaction
details of each control account in the general ledger.
 Any account in the general ledger that requires more detail than simply the total
account balance becomes a control account with a subsidiary ledger. .
 A subsidiary ledger is not a set of self balancing accounts; all debits in a subsidiary ledger
are not equal to all credits in the subsidiary ledger.
 A subsidiary ledger’s total debits and credits equal the balance in the corresponding
control account in the general ledger.
Purpose
 The purpose of control accounts and subsidiary ledger accounts is
 To facilitate the report generation process,
 To minimize the size of the general ledger, and
 To maintain sufficiently detailed records regarding account balances to assist
proper financial management
Maintenance
 The accountant maintains a set of subsidiary ledger cards for each control account
in the general ledger.
 However, a subsidiary ledger is not maintained for all accounts in the general
ledger.
 Subsidiary ledgers are only maintained for accounts within the general ledger that
requires more detailed than the simply the total account balance.
 2. At the end of each year, a transfer of the debit or credit balances to the Net Assets/Equity
account is required to close the temporary accounts in the general ledger. List the account
categories of temporary accounts in the FGE accounting system?
3. Discuss the purpose of control accounts and subsidiary ledger accounts in the FGE
accounting system?
The purpose of control accounts and subsidiary ledger accounts is to facilitate the report
generation process, minimize the size of the general ledger, and maintain sufficiently detailed
records regarding account balances to assist proper financial management.

4. List the seven broad categories of general ledger organized in FGE accounting systems?

Organization: The general ledger is organized into seven broad categories comprising:
 Revenue, Assistance or Loan accounts in sequence of the account codes
 Expenditure accounts in sequence of the account codes
 Transfer accounts in sequence of the account codes
 Asset accounts in sequence of the account codes
 Liability accounts in sequence of the account codes
 Letters of Credit accounts in sequence of the account codes
 Net Asset/Equity account

5. List the two criteria define whether an account code is a control account with a related
subsidiary ledger?

Two criteria define whether an account code is a control account with a related subsidiary ledger:
 Monthly reporting requirements
 Management and control of the account balance

6. Give examples of some accounts in the account categories that contain control accounts
with Subsidiary Ledgers and not control accounts and have no related Subsidiary
Ledgers?

Cash and cash equivalents

 Cash and cash equivalents accounts are not typically control accounts and have no related
subsidiary ledgers.
 If the accounting unit controls more than one safe, a subsidiary ledger is needed for each
safe under the general control account for cash in safe.
Net Asset/equity it is not control account and has no related subsidiary ledger
Receivables payables and letters of credit
 Are typically control accounts with related subsidiary ledgers.
 An account in the subsidiary ledgers identifies individual items under the control account.
Transfers
 Transfers accounts typically are not control accounts and have no related subsidiary
ledgers.

7. Briefly explain the following:

a) control accounts
b) Ledger
c) Posting
d) Subsidiary Ledger
e) Transfer