AKSUM UNIVERSTY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMEMT OF ACCOUNTING BANKING AND COOPERATIVES

ACCOUNTING PROGRAM

Assessment of Accounting and reporting Practice

(Case study: Aksum University)

Prepared By:

Solomon Beyene

ID No: AKUR/0906/02

Advisor:

Gebre Giorgis (MSC)

AKSUM, ETHIOPIA

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 Declaration

I, Solomon Beyene declare that this work titled “Assessment of Accounting and
Reporting Practices”, is my own effort and study and that all sources of materials used for
the study have been duly acknowledged. I have produced it independently except for the
guidance and suggestion of the research advisor.

This study has not been submitted for any degree in this university or any other
university. It is offered for the partial fulfillment of the degree of BA in management
[BA].

Name Signature:

Solomon Beyene __________________

Place of submission:

Aksum University :

Date of submission; 3/10/2004

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 Acknowledgement
I would like to take this particular opportunity to extend my appreciation and gratitude to
my advisor Ato gebre giorgis (MSc) for giving me the theoretical background, technical
guidance, continues follow up and encouragement throughout my research work.

I would like to thank the financial heads of Aksum University for giving me all the
necessary data and information through filling the interviews. I made with department for
investing his energy and time. Indeed, I am grateful to him.

I also thank my family for giving me lots of encouragement, support and love throughout
my study to earn the first degree. I owe them a lot.

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 Table of contents page
Chapter one
1.1. Back ground of the study---------------------------------------------------------1

1.2. Back ground of the organization------------------------------------------------2

1.3. Statement of the problem---------------------------------------------------------4

1.4. Objectives of the study ----------------------------------------------------------4

1.4.1. General objective----------------------------------------------------------4

1.4.2. Specific objective---------------------------------------------------------5

1.5. Significance of the study-------------------------------------------------------5

1.6. Scope of the study--------------------------------------------------------------5

1.7. Methodology of the study-----------------------------------------------------6

1.7.1. Data type and source---------------------------------------------------6

1.7.2. Data gathering instrument---------------------------------------------6

1.7.3. Sampling design--------------------------------------------------------6

1.8. Data organization and analysis ---------------------------------------------7

1.9. Organization of paper--------------------------------------------------------7

Chapter two

2.1. Definition of accounting---------------------------------------------------8

2.2. Basic principles of governmental accounting and financial report--8

2.2.1. Accounting reporting capabilities--------------------------------8

2.2.2. Fund accounting------------------------------------------------------9

2.2.3. Types of fund-----------------------------------------------------------9

2.2.4. Number of fund -------------------------------------------------------9

2.2.5. Basic of accounting ----------------------------------------------------9

2.2.6. Fixed asset -------------------------------------------------------------10

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 2.2.7. Recording of fixed asset --------------------------------------------10

2.2.8. Depreciation ----------------------------------------------------------10

2.2.9. Budgetary accounting ------------------------------------------------10

2.2.10. Financial report -----------------------------------------------------11

2.2.11. Classifications -----------------------------------------------------11

2.2.12. Terminology --------------------------------------------------------11

2.3. Special accounting conventions for colleges and universities-------11

2.3.1. Revenue and expenditure recognition--------------------------- 12

2.3.2. Valuation and recording of fixed assets -------------------------12

2.3.3. Depreciation of fixed assets ----------------------------------------12

2.4. Definition, goal, uses, and objectives of financial report ------------12

2.5. University financial statements -----------------------------------------13

2.5.1. Balance sheet ----------------------------------------------------------13

2.5.2. Statement of charge in the balance sheet --------------------------13

2.5.3. Statement of current funds, revenue expenditure and other

Charges -------------------------------------------------------------------------13

2.6 accounting system and reporting in government organization…..........14

2.6.1 Basic accounting concept……………………………………..14

2.6.2 Federal government of Ethiopia accounting system--------------15

2.6.3 Transactions……………………………………………………15

2.6.4 Financial report and financial statement……………........…...19

Chapter three --------------------------------------------------------------

3. Data analysis and interpretation -------------------------------------------------20

3.1. over view of federal government of Ethiopia (FGE)

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 3.2. Qualification of interviewed employees ---------------------------21

3.3. Accounting practices at Aksum University ------------------------22

3.3.1. Accounting and financial reporting principles --------------23

3.4. fund groups and their recognition method -------------------------26

3.5. Plant asset ----------------------------------------------------------------29

3.6. Reporting practices at Aksum University ------------------------- 30

Chapter four:

4. Conclusion and recommendation -------------------------------------------32

4.1. Conclusion ----------------------------------------------------------------32

4.1.1. Regarding accounting principle ---------------------------------32

4.1.2. Regarding practices of financial report -------------------------34

4.2. Recommendation ----------------------------------------------------------35

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 List of Tables

Description
2.1. Table of sample regarding receiving payroll...............................................16

2.2. Table of sample on transfer pension pay roll to ministry of finance

and economic development (MOFED) for actual payment…………….….....16

2.3 table of format on distribution of salary to employees by cash……..........17

2.4 table of format on transfer of unpaid salary to MOFED……………….… 17

2.5 table of sample on purchase of office supply on credit form

XYZ for capital expenditure ....……………………………………………...17

2.6 table of payment supplies office in cheque…………………………........18

2.7 table of payment of advance for office supplies ……………………….. 18

2.8 table of sample to suppliers in kind of account…………………………. 18

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 Acronyms

AKU= AKSUM UNIVERSITY

FGE= federal government of Ethiopia

GAAP= generally accepted accounting principles

GASB= general accounting standard board

MOFAD= ministry of finance and economic development

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 ABSTRACT
This study is entitled as “Assessment of Accounting and Reporting Practice case study of
Aksum University”

To achieve this objective the necessary data was collected from both primary data source.

The data are collected from the original source were by using interview. And the
secondary data were collected from manuals, references, magazines and other related
materials. Further, this research contains literature review that is support of the paper,
data analysis and interpretation; finally, appropriate conclusion and recommendation are
made.

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