i) Characteristics of Commitment Accounting

• Commitment accounting is used solely in relation to expenditure; not revenue.
• It is an alternative accounting base that is more theoretical and less widely adopted in practice compared to cash and accrual accounting.
• The entries are complicated when orders are canceled or when there is an amendment to the content or an order. To avoid returning uncommitted resources back to the government’s general fund, rush orders for inappropriate jobs or services can be made to commit unused cash balances.

ii) Characteristics of Accrual Accounting

• It recognizes the existence of the transaction in terms of service to be given or received but not the inflow and outflow of cash. It is a realistic and practical concept because it takes both cash and credit transactions into consideration.
• There is a distinction between capital expenditure and revenue expenditure. This allows for the matching of output activity and program with cost incurred, thus performance measurement.
• Accrual accounting allows for the preparation of the final accounts in the form of preparation of the operating statement and balance sheet, ensuring full disclosure of resources and outstanding liabilities.

iii) Characteristics of Cash Accounting

• Cash inflow and cash outflow is the only basis for recording transactions in the books of accounts. The cash book is the main document, and postings are made to the ledger thereafter.
• Credit transactions which result in debtors and creditors are not recorded; hence, debtor and creditor accounts are not kept.
• Both revenue and capital income, as well as revenue and capital expenditure, are treated as revenue income or revenue expenditure. Fixed assets are not recognized under cash basis and are written off in the year of purchase.