GES Promotion Interview Questions & Answers (Accounts & Audit) Part 1

QUESTION 1

WHAT ARE THE CORE DUTIES OF AN ACCOUNTANT?

The core duties of an Accountant are budget preparation, accounting, i.e administration of the budget, and reporting.

 

QUESTION 2

AS AN ACCOUNTING HEAD OF AN EDUCATIONAL INSTITUTION WHAT ARE SOME OF YOUR DUTIES?

The general duties of an Accounting head of an educational institution include the following:

1. Preparing the budget, both annually and termly,

2. Administering the budget-receipting revenue, making payments with prior approval of cost centre manager, writing the relevant books of accounts with the assistance of supporting staff

3. Preparing financial Reports-the financial statement, monthly expenditure returns,

   monthly trial balance, etc.

Other related duties include:

1. Preparation of work schedule of the accounting staff and supervising their work as well as that of other staff like the stores, catering, etc,

2. Seeing to the collection of revenues due to the cost centre,

3. Regular and timely banking of cash collections,

4. Training of the junior staff,

5. Assisting the Head to respond to audit observations

6. Advising the Head on financial issues.

 

QUESTION 3

WHAT DO YOU UNDERSTAND BY THE TERM DOUBLE ENTRY IN ACCOUNTING?

The term requires that the recording of every transaction is done twice in the books of accounts, once on the debit side and the other on the credit side. Simply put every debit entry has a corresponding credit entry and vice versa.

 

QUESTION 4

NAME THREE BOOKS OF ACCOUNTS THAT EVERY ACCOUNTS OFFICE SHALL REQUIRE FOR THE RECORDING OF ITS FINANCIAL TRANSACTIONS.

The Ledger, Cash Book and Journal.

 

QUESTION 5

WHAT ARE BOOKS OF ORIGINAL ENTRY? GIVE 4 EXAMPLES OF SUCH BOOKS THAT ARE IN USE IN THE GES.

Books of original entry are the books in which we first record transactions. Separate books are kept for each kind of transaction and the nature of the transaction determines which book it is entered into thus sales in one book, purchases in another book and cash in another. Details of entries into the books include date of transaction, supplier or purchaser, quantities, monetary values and folio column for cross-referencing.

Examples of books of original entry in use in the Ghana Education Service are:

1. Purchases Day Book (Creditors Journal),

2. Students Journal,

3. Cash Book

4. General Journal. Other general ones are Returns Inwards Day Book, Returns Outwards

   Day Book and Sales Day Book (Debtors Journal).

 

 

QUESTION 6

WHAT IS A CASH BOOK? WHAT ARE THE SOURCES OF ENTRY INTO THE CASH BOOK?

It is an accounts book of original entry in which information relating to cash and bank

transactions are recorded. For purposes of convenience and simplicity the cash book may be divided into receipts and payments with transactions for each appearing on a separate page but in principle there is one cash book.

The sources of entry into the cash book are duplicate counterfoil receipts, pay-in books, cheque books and payment vouchers with their supporting documents.

 

 

QUESTION 7

WHAT IS A JOURNAL? GIVE EXAMPLES OF WHAT USE THE GENERAL JOURNAL IS PUT TO IN THE GHANA EDUCATION SERVICE.

A Journal is a book of original entry in which the non-cash transactions of an entity are recorded and subsequently transferred or posted to the ledger. Examples are the General Journal usually referred to as “The Journal”, Purchases or Creditors Journal, Sales or Debtors Journal and the Students Journal.

The Journal (General Journal) is used for the following transactions:

1. Purchase of assets on credit,

2. Sale of assets on credit,

3. Correction of errors in the ledger accounts,

4. Opening of a new ledger with information from previous accounts,

5. Adjustment of entries in the ledger,

6. Writing off bad debts,

7. Transfer of user fee revenues to the ledger,

8. Transfer of government monthly/quarterly grants to the ledger,

9. Transfer of monthly paid salaries to the ledger,

10. Transfer of treasury paid transactions to the ledger,

11. Opening and closing of stock balances,

12. Transfers from the Balance Sheet to opening balances to the ledger,

13. Movement of Revenue and Expenditure figures from the Ledger to the Income and Expenditure Account and other non-cash transactions.

 

 

QUESTION 8

WHAT IS A LEDGER AND WHAT ARE THE SOURCES OF ENTRY INTO THE LEDGER?

The ledger is a master book of account in which recordings in the books of original entry are posted to for the maintenance of accounts of all transactions both cash and non-cash.

The recordings in the ledger complete the double entry system and out of the ledger a trial balance is extracted.

The sources of entry into the ledger are the Cash Book and the Journals.

 

 

QUESTION 9

NAME SIX FEATURES THAT CAN BE RECOGNIZED ON A COMPLETED PAGE OF A JOURNAL

1. Date of recording of transaction.

2. Name of account(s) to be debited and corresponding amount.

3. Name of account(s) to be credited and corresponding amount.

4. Narration – description or explanation of the transaction.

5. Folio (reference) to the accounts where postings are made to.

6. Total of debit and credit totals of the entries.

 

 

QUESTION 10

NAME THE FIRST SEVEN COLUMN HEADS OF AN ANALYTICAL CASH BOOK. WHY SHOULD THE CASH BOOK HAVE EXTENSION COLUMNS?

1. Date

2. Particulars/Details

3. Receipt No/P.V. Number.

4. Cheque Number

5. Cash

6. Bank
7. Contra

The extension columns are there for recordings to complete the double entry system.

The extension figures provide details of the cash and bank transactions which are posted monthly to the relevant accounts in the ledger.

 

 

QUESTION 11

NAME THE ITEMS, INFORMATION AND DOCUMENTS WHICH AN ACCOUNTS OFFICER SHALL REQUIRE TO ISSUE A RECEIPT FOR SCHOOL FEES BEING PAID.

The requirements shall be:

1. The student’s bill or student debtors’ list to know how much is being paid as well as the person paying and his identification or account number,

2. Counterfoil Receipt,

3. Double face carbon paper,

4. Pen

5. Cash or cheque being paid.

 

 

QUESTION 12

DESCRIBE THE PROCEDURE FOR RECEIPTING A CHEQUE MEANT FOR THE PAYMENT OF FEES.

1. Check amount due for payment from the student debtors’ list or bill book to know whether payment is full or part.

2. Examine the cheque to know whether it is duly signed, not post-dated, words and figures on it agree, and that any alternations on it are initialed.

3. Write the name and account number of the student at the back of the cheque. (This is to trace ownership in case the cheque bounces).

4. Issue a receipt to the payee by inserting double-faced carbon paper(s) in between the original and duplicate/triplicate of the receipts.

5. Record date, name of payee and account number, amount being paid in words and figures, narration as to full or part-payment of fees, balance outstanding (if any) and cheque number.

6. Append signature and give out the original of receipt to the payee.

7. You may then go ahead to cancel the student’s name from the debtors’ list or adjust it as the situation may require.

 

 

QUESTION 13

NAME THE FEATURES THAT YOU CAN IDENTIFY ON A BLANK CHEQUE LEAF.

1. Name of the bank and location,

2. Account numbers of cheque holder and that of the bank,

3. Column for date,

4. Column for payee,

5. Column for amount in words,

6. Column for amount in figures,

7. Name of account holder

8. Column for signature. The cheque leaf may also have an indication as to account payee only or a crossing on the face in which case the cheque will have to be opened when it is issued for cashing.

 

 

QUESTION 14

WHAT DO YOU UNDERSTAND BY THE TERM CASTING OF THE CASH BOOK?

It is the process of adding up of entries made on a page or closing figures at the end of the month so as to compare the total of cash and bank with that of contra and other extension columns taking into account opening balances for cash and bank to ensure accuracy of entries in the cash book. The total of cash and bank less opening balances should agree with that of contra and other extensions in the case of the receipts side of the cash book but for the payments side both sides should automatically agree if there is no problem with the recordings.

The purpose of casting is to ensure that figures entered under cash and bank columns are the same as those entered in the extension columns and that totals of the columns are correct. Basically it is to check the accuracy of the double entry system.

 

 

QUESTION 15

WHAT IS A TRIAL BALANCE? WHAT CAN BASICALLY ACCOUNT FOR THE NON-BALANCING OF A TRIAL BALANCE?

A trial balance is an extract of account titles and balances in the ledger on a specific date, arranged in debit and credit columns with totals of the two columns agreeing.

In addition to the figures in the ledger the cash and bank balances in the cash book are picked for the preparation of the trial balance.

The trial balance may not balance for the following reasons:

1. Addition errors in figures extracted from the ledger,

2. Wrong postings from the books of original entries,

3. Failure to cast the cash book,

4. Entering only one side of a transaction

5. Using one figure for a debit entry and another figure for the credit entry.

 

 

QUESTION 16

WHY DO WE PREPARE A TRIAL BALANCE?

The trial balance is prepared to ascertain the mathematical accuracy of the recordings of our financial transactions and also to facilitate the preparation of the financial statement.

 

QUESTION 17

HOW CAN YOU CORRECT A NON-BALANCING TRIAL BALANCE?

If a trial balance does not balance the following steps should be taken to trace the errors.

1. Cast the totals of the cash book entries page by page and month by month. This first step may however not be necessary if such castings have been done daily and monthly previously. The totals of the cash book columns may not be correct due to:
   a)  Incorrect additions under a column (undercasting or overcasting),
   b) Entering a figure under cash or bank column and failing to enter same under the extension column to complete the double entry system
   c) Entering different figures under cash or bank and the extension column.

2. Check balances brought forward on the various pages to ascertain their
   correctness.

3. Check posting from the books of original entry (cash book and journals) to the ledger to ascertain whether the correct figures were posted and whether figures were posted to the correct Dr and Cr positions of the accounts.

4. Add up the Dr and Cr figures of the accounts and balance off again.

5. Check whether the balances from the individual accounts are what have been stated in the trial balance and whether they have been placed in their correct Dr and Cr positions.

6. If the trial balance does not balance after these checks greate a suspense account to make it balance so that you can go ahead to prepare your financial statement while you possibly seek the assistance of a colleague to help you trace the error.

 

 

QUESTION 18

DOES THE BALANCING OF THE TRIAL BALANCE IMPLY THAT EVERYTHING IS CORRECT WITH THE RECORDING OF OUR FINANCIAL TRANSACTIONS?

WHAT ARE THE ERRORS THAT A TRIAL BALANCE MAY NOT DISCLOSE?

The balancing of a trial balance may not necessarily mean everything is correct with the recordings of our financial transactions. There are certain errors and omissions which the trial balance may not disclose. These include the following:

1. Errors of Omission – where a transaction has been completely omitted from the books of accounts.

2. Error of Commission – this type of error occurs where the correct amount is entered but in the wrong account e.g. Where a sale of ¢100.00 to JJ is entered in the account of JK.

3. Error of Principle – where an item is entered in the wrong class of account e.g. where a purchase of a fixed asset such as photocopier is debited to an expenses account such as photocopying or stationery.

4. Compensating Errors – where errors cancel each other out. If for example the sales and purchases accounts were both added up by ¢20.00 these two errors would cancel out each other in the trial balance because the total of both the Dr and Cr sides of the trial balance would be overstated by $20.00.

5. Errors of Original Entry – where the original figure is incorrect yet double entry is correctly done using the incorrect figure.

6. Complete Reversal of Entries – where the correct accounts are used but amounts shown on the wrong sides of the accounts. e.g. where a cheque for ¢100.00 received from KK Co. for goods sold is debited to KK Co and credited to bank instead of the reversals.

7. Transposition Errors – where the wrong sequence of the individual characters within a number are entered to affect the Cr and Dr sides of two separate accounts e.g. instead of entering ¢270 ¢720 is entered.

 

 

QUESTION 19

WHAT IS THE DIFFERENCE BETWEEN A CURRENT ACCOUNT AND A FIXED DEPOSIT ACCOUNT?

A current account is the account which an entity can hold with a bank for its day to day bank transactions (withdrawals and lodgments): The account holder is given a cheque book, visa card or both and pay-in book for the operation of the account and a bank statement is issued periodically to the account holder. A current account earns little or no interest on its balance but attracts bank charges.

A fixed deposit is a special bank account opened for the purpose of investing idle funds to earn profit or interest on the deposit. The account is fixed because it cannot be redeemed (unless discounted) before the specified period. A fixed deposit account earns more profit than a current account.

 

 

QUESTION 20

OF WHAT USE IS THE BANK STATEMENT TO THE ACCOUNTANT?

The bank statement provides details of bank transactions between the banker and the account holder from the perspective of the banker and assists the account holder to identify the differences between the recordings in his books and that by the bank thus facilitating the preparation of a bank reconciliation statement.