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Module 2-Cash vs Accrual Accg. and Utility Project Lifecycle

Total questions: 68

Worksheet time: 34mins

Name
Class
Date
1.

Under cash accounting, a transaction is recorded when:

a)

Work is completed

b)

Invoice is issued

c)

Cash is received or paid

d)

Asset is capitalized

2.

Cash accounting is mainly used for:

a)

Utility financial statements

b)

World Bank reporting

c)

Government budget control

d)

Donor audits

3.

A major limitation of cash accounting for utilities is that it:

a)

Overstates profit

b)

Ignores unpaid bills

c)

Overstates assets

d)

Inflates depreciation

4.

EPC work completed in March and paid in May is recorded in which month under cash accounting?

a)

March

b)

April

c)

May

d)

June

5.

"The phrase 'No cash, No record' best describes:"

a)

Accrual accounting

b)

Cost accounting

c)

Cash accounting

d)

Financial reporting

6.

Accrual accounting records transactions when:

a)

Cash moves

b)

Invoice is approved

c)

Work is performed

d)

Audit is completed

7.

Which organizations require accrual accounting?

a)

Local councils

b)

Utilities and World Bank

c)

Small traders

d)

Cash-based entities

8.

Which accounting method shows liabilities clearly?

a)

Cash accounting

b)

Accrual accounting

c)

Single-entry accounting

d)

Treasury accounting

9.

Donors prefer accrual accounting because it shows:

a)

Only payments

b)

Only revenues

c)

Work completed and obligations

d)

Cash balance

10.

Work done is TZS 30B and paid is TZS 18B. True project cost is shown by:

a)

Cash accounting

b)

Accrual accounting

c)

Budget accounting

d)

Treasury system

11.

Correct sequence of utility project life cycle is:

a)

Financing-Planning-EPC-Operations

b)

Planning-Financing-EPC-Operations

c)

EPC-Planning-Financing-Operations

d)

Planning-EPC-Financing-Operations

12.

"At the planning stage, the key decision is:"

a)

Paying contractors

b)

Operating assets

c)

What to build and estimated cost

d)

Collecting revenue

13.

Financing stage focuses mainly on:

a)

Asset usage

b)

Construction

c)

Funding source approval

d)

Depreciation

14.

EPC stage involves:

a)

Revenue generation

b)

Asset construction and payments

c)

Tariff approval

d)

Loan repayment

15.

Operations stage begins when:

a)

Loan is approved

b)

EPC starts

c)

Asset is commissioned

d)

Payment is completed

16.

Finance involvement in utility projects is required:

a)

Only during payments

b)

Only during audits

c)

From start to end

d)

Only at operations stage

17.

Estimated cost known and WB funding approved but no construction started. Stage is:

a)

Planning

b)

Financing

c)

EPC

d)

Operations

18.

Approving EPC milestone payment belongs to which stage?

a)

Planning

b)

Financing

c)

EPC

d)

Operations

19.

The EPC phase primarily:

a)

Uses the asset

b)

Generates revenue

c)

Creates the asset

d)

Recovers costs

20.

Operations phase mainly focuses on:

a)

Construction

b)

Cost recovery

c)

Contract signing

d)

Asset creation

21.

Capitalization of project cost occurs at:

a)

Start of EPC

b)

Mid-EPC

c)

End of EPC (COD)

d)

During operations

22.

Depreciation starts during:

a)

EPC phase

b)

Planning phase

c)

Financing phase

d)

Operations phase

23.

Finance focus shifts from cost control to cost recovery during:

a)

Planning

b)

Financing

c)

EPC

d)

Operations

24.

CAPEX refers to expenditure that:

a)

Is consumed immediately

b)

Creates long-term assets

c)

Is paid monthly

d)

Covers staff costs

25.

Which of the following is CAPEX?

a)

Fuel cost

b)

Staff salaries

c)

Substation construction

d)

Routine maintenance

26.

CAPEX costs are usually:

a)

Expensed immediately

b)

Written off monthly

c)

Capitalized and depreciated

d)

Ignored in tariffs

27.

CAPEX is commonly funded by:

a)

Tariffs

b)

Loans and grants

c)

Daily revenue

d)

Petty cash

28.

OPEX refers to expenditure used to:

a)

Build assets

b)

Upgrade substations

c)

Run the utility daily

d)

Extend asset life

29.

Which is an example of OPEX?

a)

Transmission line

b)

Power plant

c)

Fuel cost

d)

Substation

30.

OPEX costs are:

a)

Capitalized

b)

Depreciated

c)

Expensed in the period

d)

Deferred

31.

OPEX is recovered through:

a)

Loans

b)

Grants

c)

Tariffs

d)

Equity

32.

CAPEX impacts tariffs:

a)

Immediately

b)

Gradually through depreciation

c)

Not at all

d)

Only at completion

33.

OPEX impacts tariffs:

a)

Gradually

b)

After audit

c)

Immediately

d)

After depreciation

34.

CAPEX of TZS 300B with 30-year life gives annual tariff impact of:

a)

TZS 30B

b)

TZS 20B

c)

TZS 10B

d)

TZS 5B

35.

OPEX increase of TZS 30B per year impacts tariffs by:

a)

TZS 1B

b)

TZS 10B

c)

TZS 15B

d)

TZS 30B

36.

Donors generally prefer funding:

a)

OPEX

b)

Salaries

c)

CAPEX

d)

Fuel

37.

Classifying major repairs as OPEX instead of CAPEX leads to:

a)

Better reporting

b)

Audit issues

c)

Faster depreciation

d)

Lower tariffs

38.

Training and admin costs should normally be treated as:

a)

CAPEX

b)

Assets

c)

OPEX

d)

Liabilities

39.

Treating spare parts as assets is usually:

a)

Correct

b)

Required

c)

A classification mistake

d)

Encouraged by donors

40.

Wrong CAPEX/OPEX classification affects:

a)

Only audits

b)

Only donors

c)

Tariffs and compliance

d)

Only engineering

41.

Replacing a major transformer component extending life by 15 years is:

a)

OPEX

b)

Expense

c)

CAPEX

d)

Loss

42.

Costs that extend asset life should be:

a)

Written off

b)

Expensed

c)

Capitalized

d)

Ignored

43.

"'Build once, use for years' best defines:"

a)

OPEX

b)

CAPEX

c)

Revenue

d)

Liability

44.

Fuel cost is classified as OPEX because it is:

a)

A recurring operating expense

b)

Consumed during operations without creating long-term assets

c)

Capitalized into the asset base

d)

Recovered gradually through depreciation

45.

Accrual accounting provides a more accurate picture of:

a)

Cash balance

b)

True project cost

c)

Bank balance

d)

Treasury limits

46.

Under accrual accounting, unpaid EPC work creates:

a)

No record

b)

Asset and liability

c)

Only cash entry

47.

Finance control is most critical during:

a)

Planning only

b)

EPC stage

c)

Operations only

d)

Tariff setting only

48.

The main purpose of distinguishing CAPEX and OPEX is to ensure:

a)

Faster payments

b)

Correct tariff setting

c)

Contractor satisfaction

d)

Lower costs

49.

A utility builds an asset and later uses it to supply power. These stages are:

a)

Planning & Financing

b)

Financing & EPC

c)

EPC & Operations

d)

Planning & Operations

50.

Depreciation represents:

a)

Cash outflow

b)

Asset usage over time

c)

Loan repayment

d)

Revenue loss

51.

Recording EPC cost before COD under accrual accounting results in:

a)

Expense only

b)

Asset under construction

c)

Revenue

d)

Cash surplus

52.

Incorrect classification of costs mainly distorts:

a)

Engineering designs

b)

Tariffs and financial statements

c)

Construction schedule

d)

Asset life

53.

Finance ensures donors funds are used:

a)

Quickly

b)

Flexibly

c)

As intended

d)

Without controls

54.

Cash accounting is unsuitable for utilities mainly because utilities have:

a)

Small budgets

b)

Long-term projects

c)

Simple operations

d)

Few assets

55.

Accrual accounting aligns best with:

a)

Treasury cash limits

b)

Utility operations reality

c)

Short-term projects

d)

Daily expenses

56.

EPC phase ends when:

a)

Last payment is made

b)

Asset is commissioned

c)

Loan is repaid

d)

Audit is completed

57.

Operations phase focuses on earning:

a)

Grants

b)

Loans

c)

Revenue

d)

Advances

58.

The key financial challenge in utilities is matching:

a)

Assets and liabilities

b)

Cash inflows and outflows

c)

Staff and equipment

d)

CAPEX and OPEX

59.

OPEX is normally funded by:

a)

Donors

b)

Loans

c)

Tariffs

d)

Equity

60.

CAPEX costs appear in financial statements mainly as:

a)

Expenses

b)

Assets

c)

Income

d)

Cash

61.

Misclassifying CAPEX as OPEX will:

a)

Reduce audit risk

b)

Increase depreciation

c)

Inflate tariffs immediately

d)

Improve compliance

62.

Utility finance must balance cost control and cost recovery across:

a)

Departments

b)

Project stages

c)

Contractors

d)

Auditors

63.

Main reason donors reject cash accounting is because it:

a)

Is complex

b)

Shows only payments

c)

Shows depreciation

d)

Shows assets

64.

Capital expenditure benefits are realized:

a)

Immediately

b)

Over many years

c)

Only at COD

d)

At payment time

65.

Which cost impacts tariffs the fastest?

a)

CAPEX

b)

Depreciation

c)

OPEX

d)

Asset revaluation

66.

Finance discipline during EPC prevents:

a)

Construction

b)

Asset creation

c)

Cost overruns

d)

Depreciation

67.

True project cost visibility is achieved through:

a)

Cash flow statement

b)

Accrual accounting

c)

Treasury reporting

d)

Budget control

68.

Correct financial classification ultimately ensures:

a)

Faster construction

b)

Lower staff cost

c)

Sustainable utility operations

d)

Higher EPC payments

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