P.M.A.D Employees Forum: NAM MCQs 2019

MULTIPLE CHOICE QUESTIONS – NAM

1. The purpose of Chart of Accounts is to:

1. Provide views of transactions in alpha and numeric characters

2. Provide a framework for organizing accounting transactions

3. Prepare accounting statements and budgets

4. Enable management to have better control on the working of DDOs and DOAs

2. Which of the following is not a Sub-Entity Element:

1. District

2. Attached Department

3. Account Number

4. DDO

3. Attached Department is represented by:

1. Two Alpha Characters

2. Two Numeric Characters

3. Four Alpha Characters

4. Four Numeric Characters

Q.4 Which is the sub element of an object code:

1. Accounting Element

2. Division

3. Sub Fund

4. Detailed Function

Q.5 Natural Accounts are represented by:

1. Accounting Element

2. Account Number

3. DDO Number

4. Function Element

Q.6 Which one of the following is not an Accounting Element:

1. Tax Receipts

2. Development Expenditure

3. Liabilities

4. Equity

Q.7 Account Number is represented by:

1. Two Numeric character sub elements

2. Three Numeric character sub elements

3. Four Numeric character sub elements

4. Five Numeric character sub elements

Q.8 Not all entries will require the use of elements. This is because:

1. Certain transactions are relevant to some sub elements

2. Computers are unavailable in some locations

3. A number of elements are derived

4. All the elements are required to be compulsorily input

Fill in the Blanks

Auditor General is appointed under Article of the 1973 constitution.
The Auditor General shall hold office for a fixed term of years or he attains the age of years which ever is earlier.
The auditor General may, at any time, by writing under his hand addressed to the

Resign his office.

The Auditor General shall be paid a salary which is percent higher than the maximum salary payable to an officer in BPS .
The Auditor General shall be entitled to all such benefits including entitlement pertaining to Travel as are admissible to a .
The Auditor General shall be paid for each completed year of service a pension at the rate of rupees per annum.
The Auditor General shall, on the basis of such audit as he may consider appropriate and necessary, the Accounts.
The Auditor General shall audit all expenditure from the of the Federation and of each Province.
The Auditor General shall audit the receipts and expenditure of holders of authorities substantially financed by and .
The Auditor General shall audit all receipts which are payable into and

of the Federal Government and each Provincial Government.

Any person or authority hindering the auditoria functions of the Auditor General regarding inspection of accounts shall be subject to .
The Auditor General shall perform functions and exercise powers in relation to the audit including supplementary audit to the accounts of the companies.
The Auditor General shall have full powers to incur within the budgetary provisions.
The shall maintain the accounts in such form and in accordance with such methods and principles as the prescribes from time to time with the approval of .
The Controller General of Accounts shall render advice on for new Schemes programmes or activities undertaking by the Government concerned.
The Controller General of Accounts shall submit accounts of the after the close of each financial year.
The Controller General of Accounts shall co-ordinate and ensure of audit observation of the Audit Department with the concerned departments.
The Controller General be the head of all the offices subordinate to him.
The Controller General shall prepare and _____Account each year.
The Chart of Classification is issued by the with the approval of the ------

Under Article of the 1973 constitution.

Tick the most suitable answer.

The obligations to make future payment could not be properly identified by.

(a) Cash Basis of Accounting (b) Accrual Basis of Accounting

The recording of commitments which do not have an immediate impact on the cash position but do have effect on the budget availability is one of the key features of :

(a) Cash Basis of Accounting (b) Modified Cash basis of Accounting

Recording of fixed asset is an important aspect of:

(a) Modified Cash Accounting (b) Cash basis of Accounting

The Chart of Accounts is an essential component of:

(a) Cash basis of Accounting (b) NAM

The Pool of money from which budgetary allocation is made is called:

(a) Function (b) Project

Revenues and expenses are record in:

(a) Cash basis of Accounting (b) Accrual basis of Accounting

Commitment accounting provides managers with a tool:

(a) To measure and forecast spending performance against budget

(b) Avoid overbooking of expenditure in a particular period

(d) None of above.

28 In Modified Cash Accounting initially the valuation of asset in the asset register will be on:

(a) An historical cost basis (b) Fair market value

29. The Major classes of liability to be reported in the balance sheets under the modified cash accounting model are:

(a) Public dept, current Liabilities and deferred liabilities

(b) Long term loan, advances and current liabilities

(d) All above

30. A commitment once recorded, must not be reversed unless:

(a) Payment has been made (b) The purchase order or contract has been

Cancelled by the same delegated power

31. Appropriation control is defined as:

(a) Allocated budget less fixed assets (b) Allocated budget less payments

And commitments

32. Criteria for recording fixed assets are:

(a) More than Rs.10,000/- (b) Payment specifically defined for fixed assets or an item having cost more than Rs.100,000/-

33. Surplus assets shall be sold on the open market by means of:

(a) Public action or tender (b) Single negotiated tender

34. Sale expenses on sale of fixed assets will be recorded as:

(a) Sale proceeds less sales expenses (b) Netted of the sales proceeds

35 According to NAM Expenditure are recorded:

(a) When expenditure recognized but not paid (b) When fixed asset purchased on credit

36. The payroll ID for an employee is an eleven character code comprising of the following.

(a) Finance Ministry Code, NIC and date of birth

(b) Fed/Prov. Code, DAO Code, Employee Code and Check digit

(d) None of above

37. PAC refers to:

(a) Public Audit Committee (b) Public Accounts Committee

38. Office of the Auditor General is accountable to

(a) President of Pakistan (b) Prime Minister of Pakistan

39. The entities which fall outside the responsibility of the Auditor General of Pakistan for accounting and reporting purpose are called:

(a) Self Accounting Entities (b) Federal Govt. entities

40. An element to which a transaction will be classified as expense tax non tax or capital receipt , assets, liability or equity is called:

(a) Financial Element (b) Balance Sheet element

41. Finance Division is Accountable to:

(a) CBR (b) Auditor General of Pakistan

42. Code of ethics is a comprehensive statement:

(a) of the values and principles which should guide the daily work of auditors

(b) of the principles and guidelines for detection of fraud

(d) of guidelines for quality assurance in deferent phases of audit

43. The Auditor, in determining the extent and scope of the audit;

(a) Should do the analytical review of the financial statements

(b) Should apply the substantive and compliance test.

(d) None of above.

44. Audit cycle consists:

(a) General Audit Planning and Detailed Activity and Resource Planning

(b) Audit objective, scope and risk management

(d) (b) and (c) above

(e) (a) and (c) above

45. An error (or the sum of the errors) is material is big enough.

(a) To influence the decision of the management

(b) To influence the users of financial statements

(d) None of the above.

46. The risk is often considered to be highest when there is a good chance that the financial statements and the audit report thereon will undergo a lot of scrutiny.

This type of risk is called:

(a) Processing risk (b) Professional risk

47. The most difficult type of fraud to detect is, fraud committed by:

(a) Staff of Finance Department (b) Management

(e) None of the above.

48. General Standards for an internal control structure are:

(a) Reasonable assurance and supportive attitude. (b) Integrity and competence

49. For a financial statement audit, the most logical way of dividing up the financial statement is to consider:

(a) Each group of items in the financial statements to be a separate component

(b) Total groups in the financial statement are to be a separate component

(d) None of the above.

50. To support the auditor’s findings, conclusions and recommendation the evidence must be:

(a) Sufficient and relevant (b) Reliable and objective

COMMITMENTS

Fill in the Blanks:

A Commitment is recognized when a valid __________ is raised;
A commitment is booked against funds _______________ in a particular budget head; and
used to control large and non- ____________ expenditure against appropriation;
No commitment would be for less than Rs. _____________ expenditure;
A commitment is an obligation to make __________ payment.

Mark the appropriate (T for true and F for False) words:

Once a commitment is entered & approved by delegated authority, it must be recorded by DDO. ( T/ F)
Commitments are made for the expenditure as given in the SAE ( T/ F)
On receipt of claim voucher, payment is made & commitment entry is reversed in Appropriation Control Register ( T/ F)
No commitment for Salaries and related deductions. ( T/ F)
A commitment is raised for those expenditures expected to be paid for in the current financial year. ( T/ F)

Check the appropriate answer:

No commitment for:

Salaries and related deductions;
Pension;
GP fund;
Loans and advances to employees;
Utility Bills;
Months of May and June

Ans:

i. Only f ;

ii. a. , c. and f.

iii. All of above;

Checks for making commitment are:

Funds are available
Recording of P. O.
For only one financial year.

Ans:

i. Only c

ii. a. and c.

iii. All of above;

FIXED ASSETS

Mark the appropriate (T for true and F for False) words:
Assets are economic benefits controlled by the entity as a result of past transactions or other past events. ( T/ F)

Fixed assets are usually physical in nature, such as plant and equipment, buildings etc. ( T/ F)

for their proper management it is essential to ensure their Safe custody and effective and proper utilization of assets ( T/ F)
All departments/entities will not maintain a “Fixed Assets Register” (form 13A) for the categories of assets for which they are responsible. ( T/ F)
Every fixed asset purchased or improvement/ extension made above Rs. 100,000 shall be recorded in the Fixed Assets Register. ( T/ F)
The DAO shall ensure that the Fixed Assets Register kept in his / her department/ entity is properly maintained and is up-to-date. ( T/ F)
Departments/ entities will not regularly review their holdings of fixed assets in order to match with the fixed assts records and to identify surplus assets ( T/ F)
A delegated officer shall take appropriate precautions to safeguard the accuracy and integrity of the record. ( T/ F)
The AG shall consolidate the information about fixed assets for including into the Annual Accounts. ( T/ F)
Swap arrangements shall not be approved in each case by a delegated officer empowered to incur expenditure equal to the estimated gross value of the items being acquired in the swap. ( T/ F)

Fill in the Blanks:

A _____________ account for fixed assets shall be kept by the DAO/ AG/AGPR to record transactions relating to fixed assets.
On _____________ or swaps the asset traded-in or swapped shall be removed from the Fixed Assets Register and new asset shall be added to the Fixed Assets _____ by delegated officer.
Where a loss of asset has taken place, it shall be taken off in the Fixed Assets Register and included in the ____________.
The transfer of asset by one department/entity to another will be treated as an arms ___________________.
Future _________________ controlled by the entity as a result of past transactions or other past events are known as assets.

Mark the appropriate (T for true and F for False) words:

Non-development expenditures refer to the on-going administrative operations within a ministry or department, in fulfilling its policy objectives.

The Principal Accounting Officers must not approve and sign off the budgets relevant to their entities.

Where the revised budget is less than the approved grant by more than 5%, an explanation of the saving must be provided by the ministry or department.

Temporary budget estimates must be submitted to the Financial Advisor no later than 1 December each year.

The Principal Accounting Officer is permitted to re-allocate funds between major and minor function heads within the entity.

Re-allocation of funds between voted and charged components of the Budget is not permitted.

Spending ministries are responsible for the preparation of their own budget estimates.

The estimates provided in the Annual Budget Statement must be shown in accordance with Constitutional requirements.

All the self-accounting entities do not prepare and publish their own Annual Appropriation Accounts, duly certified by the DGs of Audit.

The review process also includes the auditing function, which may be both external (i.e. by the Auditor General’s Department) and internal (by the ministry or department itself).

BANKING

A monthly reconciliation of bank accounts is a necessary part of financial management and is also an effective measure for detecting and deterring fraud and irregularities.

Every DAO shall not prepare a monthly reconciliation statement for expenditures and receipts. The respective Accountant General shall prepare a consolidated monthly reconciliation statement for each government bank account.

Each DAO will prepare and provide the following monthly reconciliation statement to the Accountant General.

The Main Designated Branch (SBP branch or NBP category A branch or NBP category B branch) shall submit a daily bank return to the concerned. DAO/AG/AGPR.

The daily bank return shall include all transactions for the day and shall reach the concerned DAO/AG/AGPR by 10 a.m. next working day.

Receipts

It is the responsibility of the Accountant General to ensure that all government receipts are transmitted to the SBP as soon as possible.

It is not the responsibility of the accounting officer to ensure the classifications made in respect of each receipt are correct.

The Accountant General and the tax collecting agencies will be jointly responsible for reconciliation of tax revenues, in the manner prescribed by the Auditor-General.

If a cheque is received which is subsequently dishonored by the bank, it will not appear in the bank scroll (Direction 5.3.3.2) and therefore does not require an adjustment by the accounting office.

Personal deposits are funds dedicated to a particular purpose, for which a separate account is not kept by the Treasury Office.

P.M.A.D Employees Forum

Pages

Sunday, 20 October 2019

NAM MCQs 2019