Compilation 1 (midterms)

GOVERNMENT ACCOUNTING RESPONSIBILITY Q1. Which of the following maintains the journals and ledgers? National Government Agencies Q2. Which of the following is tasked in keeping the general accounts of the government, supporting vouchers, and other documents? Commission on Audit Q3. Government agency ABC is entrusted with government resources. According to P.D. 1445, who is directly responsible for the efficient and effective utilization of these resources? The head of government agency ABC Q4. Accounting responsibility is mandated by the Constitution of the Philippines. The head of the agency and other personnel who have authority over government funds are directly responsible. Only statement 1 is true Q5. Which is not true about government funds? Government funds can be transferred from one officer to another in accordance with the instructions of the head of the office. Q6. Mr. A, a government employee entrusted with the custody of government funds has lost the funds due to force majeure. What should Mr. A do to relieve him from liability? Mr. A should immediately notify the COA within 30 days Q7. Which is in charge of implementing the national budget? Department of Budget and Management Q8. What is the role of the Bureau of Treasury in relation to government accounting responsibility? To receive and keep national funds and manage or control thereof Q9. Which is not charged with government accounting responsibility? Legislative Department Q10. Mr. B, an accountable officer, used government resources for his personal needs. Which of the following statements is true? Mr. R is personally liable for unlawful use of government resources.

BUDGETARY ACCOUNTS, GAM, AND FS OF NGAS Q1. All disbursements of government entities must be in conformity with the law and the National budget Q2. If financial information is not reported on a timely basis, it does not possess Relevance Q3. The equity account of a government agency is called Accumulated surplus/deficit Q4. The GAM for NGAs is promulgated by the Senate under the authority bestowed by the Philippine Constitution. Its purpose is to harmonize government accounting standards with the U.S. GAAP. Both statements are false.

Q5. These refer to the attributes of financial information that make them relevant to users. Qualitative characteristics Q6. These are authorizations programmed annually or for some other period prescribed by law which do not require periodic action by Congress. Automatic Appropriations Q7. Which is true about the principles that govern financial transactions and operations of the government? Government money shall be paid only when provided by law or other specific statutory authority. Q8. The committee formed to harmonize conflicts between the Representatives and Senate versions of the General Appropriations Bill is called Bicameral Conference Committee Q9. Arrange the following steps according to the sequence that they appear in the budget cycle. I. II. III. IV.

Allotment Appropriation Incurrence of obligation Disbursement

II, I, III, IV Q10. Which of the following is not one of the specific accounting systems of a government agency? Deposit and withdrawal system Q11. Which qualitative characteristic of financial reporting pertains to freedom from material errors and bias? Neutrality

Q12. The registry used when NCA is received. RANCA Q13. It is an authorization issued by DBM to NGAs to incur obligations. Allotment Q14. Which of the following financial statements is peculiar to a government entity? Statement of Comparison of Budget and Actual Amounts Q15. In the Statement of Financial Performance of a government entity, the difference between total revenue and total operating expenses is called Surplus/deficit Q16. After the budget call from DBM, the proposed budget is submitted to the Office of the President. The President reviews the budget and sends it to Congress for further deliberation. Both statements are false. Q17. Allotment refers the authorization by the legislative body to allocate funds for purposes specified by the legislative of similar authority. A government entity must first receive an allotment before it can incur obligations. Only statement 2 is true. Q18. Which does not apply to responsibility accounting? Separate books of accounts for controllable and non-controllable costs

Q19. This is a budget that is prepared in such a way that estimated revenues exceed estimated expenditures. Balanced budget Q20. Which is not one of the aims of GAM? Update principles in auditing utilization of government funds Q21. Illustrate the Budget Cycle by drawing the different phases in accordance with the logical sequence. You can elaborate more your answer with an explanation in paragraph form (not exceeding 200 words).

MIDTERM SUMMATIVE ASSESSMENT #1 Q1. This registry shall be maintained by Appropriation Act, by Fund Cluster, by Major Fund Output or Program/Activity/Project for personnel services. Registry of Allotments, Obligations and Disbursements – Personnel Services Q2. Which of the following statements best differentiates the government accounting process from the accounting process of a business entity? The government accounting process is similar to that of a business entity, except that it incorporates budgetary controls, such as recording in the budget registries and preparing periodic budget accountability reports. Q3. It is a government-wide harmonized, budgetary, treasury, and accounting code classification. UACS Q4. Which of the following statements best describes the various Registries maintained by government entities? The Registries primarily serve as an internal control for controlling and monitoring the conformance of actual results with the approved budget. Q5. Which is a budget execution document? Financial Plan Q6. Which account has a UACS subject code of 1030501000? Receivables – Disallowances/Charges Q7. It is the process of analyzing, recording, classifying, summarizing and communicating all transactions involving receipt and disposition of government funds and property and interpreting the results thereof. Government accounting Q8. In the RCA, which of the following is intra-agency receivable? Due from Operating Units Q9. In the RCA, which is a service income account? Clearance and Certification Fees Q10. Under responsibility accounting, non-controllable costs are Costs incurred indirectly and allocated to a responsibility level Q11. One of the following principles is used to both commercial and government accounting. Double entry bookkeeping service Q12. This accounting concept is necessary so that users can use information in the financial statements in noting differences and similarities between those information presented and information from other sources that the user may have.

Comparability Q13. This is the authorization by a legislative body to allocate funds for specified purposes Appropriation Q14. Which is not contained in the budget call? Country’s fiscal policy and budget priorities Q15. It is the legislative consideration, review and approval of the national budget. Authorization Q16. This phase in the budgetary process deals with monitoring conformance of actual reports with planned targets. Budget accountability Q17. Which is not a key element of UACS? Project code Q18. This refers to annual authorization for incurring obligations. New General Appropriation Q19. This is the phase where government funds are spent. Budget execution Q20. Which of the following statements in incorrect regarding the GAM for NGAs? The DBM accounts for the cash, public debt and related transactions of the NG. Q21. Responsibility accounting is a system that related the financial reports to a responsibility center. It is a system that measures the plans and actions of each responsibility center. Both statements are true. Q22. It is a statement of estimated receipts and estimated expenses of the government which serves as basis for a general appropriation bill. National government budget Q23. Which account is peculiar to government accounting? Share from National Wealth Q24. The basis of accounting required by the GAM for NGAs is Accrual basis Q25. Government funds include public moneys of every sort and other resources pertaining to any agency of the government. Government funds or property shall be spent or used solely for private purpose. Only statement 1 is true. Q26. These are the appropriations for the purchase of goods and services the benefits of which extend beyond the fiscal year and which add to the assets of the government. Capital outlays Q27. It is applied in the preparation of the national budget where the total estimated revenue must be more than estimated expenditures. Balanced budget

Q28. This qualitative characteristic of financial reporting refers to freedom from material error and bias. Reliability Q29. Which is not a sub-major account group? Basic Salary – Civilian Q30. The NGAs are responsible for Directly implementing the projects of, and performing the functions delegated by, the government Q31. The coverage of the GAM for NGAs includes all of the following, except Basic concepts used in auditing the accounts and financial reports of government entities Q32. Which registry contains columns for allotments, obligations, unobligated allotments, and unpaid obligations? RAOD Q33. It is the basis for coding the object classification in the COA RCA. Accrual accounting Q34. It is a budget which covers items not adequately provided or not at all included in the general appropriation law. Special budget Q35. This report, required of government entities, shows the names of creditors, the amounts owed to them, and the number of days these obligations are outstanding. This report is submitted to the COA and DBM within 30 days after the end of the year. Aging of Due and Demandable Obligations Q36. Which is not a budget and financial accountability report? Physical plan Q37. Which is not a financial expense? Documentary Stamp Expense Q38. It is a budget that focuses on specific expenditures such as PERA, training expenses, and utility expenses. Line item budget Q39. Which is a financial expense? Management Supervision Q40. It is the authorization from the Department of Budget and Management to an agency to incur obligation up to a specified amount that must be within the legislative appropriation. Allotment Q41. The RAOD shall be maintained to record allotments, obligations and disbursements. It shall show the allotment received for the year, obligations incurred, and the actual disbursements made. Both statements are true. Q42. Fund cluster accounting involves Maintaining separate books and budget registries for each fund Q43. Under responsibility accounting, a cost is considered controllable at a given level of managerial responsibility if The manager has the power to incur it within a given period of time

Q44. It is the expenditure authority derived from appropriation laws, government ordinances, and other decisions related to the anticipated revenue or receipts for the budgetary period. Approved Budget Q45. Which does not belong to fund cluster code values? Externally generated funds Q46. It refers to a fund which is available for any purpose other than those which other funds have been designated to General fund Q47. The President’s explanation of the country’s fiscal policy and budget priorities is contained in a document called the President’s Budget Message Q48. Which office maintains accounts of financial transactions of all national government offices, agencies, and instrumentalities? Bureau of Treasury Q49. These are intended to meet the needs of users who are not in a position to demand reports tailored to meet their particular information needs. General purpose financial statements Q50. It is the amount committed to be paid by the government arising from an act of a duly authorized administrative officer and which binds the government to the immediate and eventual payment of money. Allotment Q51. Which is a major account group? Cash and Cash Equivalents Q52. This is the authority issued by the DBM to central, regional and provincial offices and operating units to cover their cash requirements. Notice of cash allocation Q53. The UACS was jointly developed by the following departments except Joint Legislative-Executive Council Q54. Which of the following principles is not in accordance with the Basic Government Accounting and Reporting Principles under the GAM for NGAs? Modified accrual basis of accounting in accordance with the PPSAS Q55. The account with an RCA code of 20601010 is a/an Liability account Q56. Which document is not contained in the President’s budget? Government budget map Q57. The GAM for NGAs aims to update all of the following except Rules and regulations regarding the filing and payment of taxes by government employees Q58. In the RCA, this group represents classification within the major account The sub-major account group Q59. Which is the sub-major account group?

Land Q60. It is the system of prescribing the procedures for recording, appropriations, allotments and obligations. Budgetary accounting Q61. Which is the UACS code of Trust Receipts? 08 Q62. It refers to an accounting entity for recording expenditures and revenues associated with a specific activity for which accounting records are maintained and periodic financial reports are maintained. Fund cluster accounting Q63. Which is not an expense under Personnel Services? Training expense Q64. Which is an inter-agency payable account? Due to BIR Q65. What is the legal basis of the COA in promulgating the GAM for NGAs? Article IX-D, Section 2 par. (2) of the 1987 Constitution of the Republic of the Philippines Q66. Which is not a maintenance and other operating expenses account? Subsistence allowance Q67. After the budget call, budget hearings are made whereby agencies defend their proposed programs and expenditures for the upcoming year before the DBM Q68. In the context of responsibility accounting, government agencies are basically cost centers because Their primary purpose is to render service to the public at the lowest possible cost Q69. Which registry contains columns for allotment received, notice of cash allocation received and utilized, and balances for unutilized notice of cash allocation and unfunded allotment? RANCA Q70. This refers to authorization programmed annually or for some other period prescribed by law which do not require periodic action by Congress. Automatic appropriations Q71. The RAPAL shall be maintained to monitor appropriations and allotments charged thereto. It shall be maintained by COA to ensure that allotment releases are valid. Only statement 1 is true. Q72. Which of the following is not one of the registries maintained by a government entity? Registries of Journals and Ledgers Q73. It is a budgeting approach that uses performance information to assist in deciding where the funds will go. Performance-informed budgeting Q74. Which is the RCA code of Advances to Contractors? 19902010 Q75. It represents the accounts classification as to assets, liabilities, equity, income and expenses.

Account group Q76. After the incurrence of obligations, the next step in the budget cycle is Disbursement authority Q77. Which is a sub-major account group Land Q78. Under this approach to budgeting, several parties participate in the budget preparation, starting from the lowest levels of the government up to the highest levels Bottom-up budgeting Q79. Which of the following events or transactions requires recording in the books of accounts of a government entity? Disbursement authority Q80. It is a plan or program of activities together with the cost of undertaking them to meet goals or targets which emphasize on expected results. Performance budget Q81. Government accounting aims to provide information concerning past operations and present conditions. It also aims to provide a basis for guidance for future operations. Only statement 1 is true.

GOVERNMENT ACCOUNTING PROCESS Q1. A check disbursement is normally recorded as a credit to the “Cash - Modified Disbursement System (MDS), Regular” account. True Q2. According to the GAM for NGAs, the Registries are (choose the incorrect statement)    

Maintained by the accounting unit of a government entity

Q3. The receipt of allotment is recorded in the    

RAPAL and RAOD

Q4. Which of the following accounts is most likely credited when a government entity remits its collections to the National Treasury?    

Cash - Collecting Officer

Q5. A disbursement authority issued by the DBM to DFA and DOLE to utilize their income collected/retained by the foreign service posts to cover their operating requirements, but not to exceed the released allotment to the said post.    

CDC

Q6. Both the ORS and RAOD are updated each time an obligation is incurred, a payable is recorded for the obligation incurred, and disbursements are made to settle the recorded payables.    

True

Q7. Entity A, a government entity, made disbursements for the travelling expenses of its personnel. This is classified as    

Maintenance and other operating expenses

Q8. The remittance of amount withheld to the other government agencies, such as the BIR, BOC, GSIS, PhilHealth, and PAG-IBIG is done through the TRA.    

False

Q9. The receipt of an allotment is recorded by a government entity in the

   

RAOD and RAPAL

Q10. Which of the following records is technically not considered an accounting book?    

Registry of Appropriations and Allotments

Q11. Which of the following is (are) affected when a government entity makes disbursements to settle recorded obligations?    

All of these

Q12. The entry to record the reversion of unused NCA at the end of the period is the exact opposite of the entry to record the receipt of NCA.    

True

Q13. The various registries maintained by government entities primarily serve as internal control for controlling and monitoring the conformance of actual results with the approved budget.    

True

Q14. According to the RCA, the “Subsidy from National Government” account is a/an    

Revenue account

Q15. Expenditures to acquire long-term assets are classified as    

Capital outlays

Q16. Which of the following accounts is credited when the government entity remits contributions to the GSIS, PhilHealth, and PAGIBIG?    

Cash - Modified Disbursement System (MDS), Regular

Q17. 

In MNOP’s first quarter Statement of Appropriations, Allotments, Obligations, Disbursements and Balances, how much is shown as “unpaid obligations”?    

P2B

Q18. “Advances for Payroll” is a/an    

Asset account

Q19. Which of the following is recorded in the ORS?    

Entering into employment contracts with employees

Q20. The account “Personal Economic Relief Allowance (PERA)” is a/an    

Personnel services account

Q21. This event is recorded in the books of accounts.    

Closing entries

Q22. The “Subsidy from National Government” account is debited when recording    

Reversion of unused NCA

Q23. The GAM for NGAs requires the Collecting Officer to issue an official receipt to acknowledge the receipt of the NCA.

   

False

Q24. The receipt of an appropriation is recorded by a government entity in the    

RAPAL

Q25. Which of the following is not a form of disbursement authority?    

Allotment

Q26. 

The P60B authorization is referred to as    

Allotment

Q27. Which of the following accounts is debited when the government entity remits its collections to the National Treasury?    

Cash - Treasury/Agency Deposit, Regular

Q28. Which of the following is charged with the responsibility of keeping the general accounts and related documents of the government?    

Commission on Audit

Q29. Which of the following is credited when a government entity receives the NCA?    

Subsidy from National Government

Q30. In MNOP’s first quarter Statement of Appropriations, Allotments, Obligations, Disbursements and Balances, how much is shown as “unobligated allotments”?    

P5B

Q31. Obligation recorded in the registries but not yet in the accounting books are referred to as Not yet due and demandable Q32. The entry to record the receipt of NCA by a government entity includes a debit to     

Q33.

Cash-Modified Disbursement System (MDS), Regular

In MNOP’s first quarter Statement of Appropriations, Allotments, Obligations, Disbursements and Balances, how much is shown as “unreleased appropriations”? P180B Q34. At the end of each year, an adjustment is made to revert any unused NCA of a government entity. True Q35. Both the ORS and RAOD are updated each time an obligation is incurred, a payable is recorded for the obligation incurred, and disbursements are made to settle the recorded payable. True Q36. The 8-digit Revised Chart of Accounts (RCA) Code for the account “Subsidy from National Government” starts with number 4 Q37. The receipt of NCA is recorded in the RANCA Q38. The 8-digit RCA code for expenses starts with number 5 Q39. Technically, only the Journals and ledgers are considered accounting records and the Registries are budget records. True Q40. The various registries maintained by government entities are technically considered as Budget records Q41. A journal entry with a credit to “Cash - Modified Disbursement System (MDS), Regular” account is recorded in the Check disbursements journal Q42. Which of the following accounts is credited when the government entity remits taxes withheld to BIR? Cash – Tax Remittance Advice Q43. Government entities and business entities use the term obligation or the phrase “incurrence of obligation” similarly. False Q44. The incurrence of an obligation for future delivery or performance by the obligee is recorded by a government in the RAOD and ORS Q45. This is used to recognize the constructive remittance of taxes withheld. TRA Q46. This type of expenditure pertains to all types of employee benefits. Personnel services Q47. Separate accounting records and budget registries are maintained for each fund cluster. True

Q48. The P240B allocation is referred to as Appropriation Q49. Which of the following is (are) affected when a government entity incurs obligations? ORS and RAOD Q50. The RAOD is maintained by the Budget division of agencies Q51. In reference to the government accounting cycle, a government entity can incur obligations after receiving Allotment

REVENUE AND OTHER RECEIPTS Q1. A government entity recognizes revenue from exchange or non-exchange transactions. Which of the following may not give rise to revenue by a government entity? Receipt of free trainings and seminars regarding process technology on farming from an international organization. Q2. The national government received a foreign grant conditioned on the construction of a public infrastructure. Entity A was chosen as the implementing agency. When the national government received the grant, the entry in the BTr’s books included a Credit to the “Other Deferred Credits” account Q3. Entity A enters into a long-term contract to provide services. The outcome of the transaction can be estimated reliably and the progress on the contract can be measured with sufficient reliability. According to the PPSAS, how should Entity A recognize revenue from the contract? By reference to the stage of completion of the contract at the reporting date Q4. Which of the following would result to an increase or decrease in the revenue reported by a government entity in its statement of financial performance? The repayment of a loan payable forgiven Q5. The national government receives a foreign grant conditioned on the construction of a public infrastructure. According to the GAM for NGAs, when does the national government recognize revenue from grant? When condition is met Q6. The taxable event for VAT is the Undertaking of a taxable entity Q7. Payments to government entities in the form of checks are not allowed. False Q8. Imposition and collection of tax revenue is considered a(an) Non-exchange transaction Q9. At the end of the period, the “Cash – Treasury/Agency Deposit, Regular” account is closed to the Accumulated Surplus or Deficit account Q10. Statement 1: When goods are sold or services are rendered in exchange for dissimilar goods or services, the exchange is not regarded as a transaction which generated revenue.

Statement 2: When goods or services are exchanged or swapped for goods or services are of a similar nature and value, the exchange is regarded as a transaction which generates revenue. Both statements are false. Q11. According to the GAM for NGAs, an exchange of goods or services of similar nature and value between entities Does not give rise to revenue Q12. According to the GAM for NGAs, which of the following may never give rise to revenue for a government entity? Services in-kind Q13. Which of the following receipts of a government entity will give rise to revenue recognition? Receipt of subsidy from the national government or other national government agencies Q14. All revenues shall be remitted to the BTr and included in the Special Fund, unless another law specifically requires otherwise. False Q15. Gifts, donations and goods in-kind with condition are recognized Initially as liability and recognized as revenue only when the condition is satisfied Q16. Government entities and business entities use the same accounting treatment for all of the following except Remittance of taxes withheld to the BIR Q17. According to the GAM for NGAs, revenue includes only those that are received or receivable by the entity in its own account. Accordingly, receipts on behalf of another entity are Recorded as liability Q18. All of the following give rise to the recognition of revenue from non-exchange transaction except Sale of goods Q19. According to P. D. 1445, all revenues of an entity shall be remitted to the National Treasury and included in the General Fund Q20. Which of the following is a non-exchange transaction? Collection of taxes Q21. The constructive remittance of taxes withheld through the TRA gives rise to the recognition of revenue. True Q22. The receipt of a performance bond or a security deposit is credited to Liability account Q23. Statement 1: Revenue from non-exchange transactions shall be measured at the amount of the increase in net assets recognized by the entity, unless it is also required to recognize a liability. Statement 2: Revenue from exchange transactions shall be measured at fair value of the consideration received or receivable. Both statements are true. Q24. According to the GAM for NGAs, all of the following criteria must be met before a government entity recognizes revenue from the sale of goods, except The stage of completion can be measured reliably Q25. Revenues received by the NGAs from exchange transactions are derived from the following except Taxes, gifts and donations, goods in-kind, and fines and penalties Q26. According to the GAM for NGAs, the receipt of concessionary loans by government entities may give rise to revenue recognition.

True Q27. These are transactions in which one entity receives assets or services, or has liabilities extinguished, and directly give approximately equal value to another entity in exchange. Exchange transactions Q28.

Statement 1: Interest shall be recognized as they are earned in accordance with the substance of the relevant agreement.

Statement 2: Dividends or similar distributions shall be recognized when the shareholder’s or the entity’s right to receive payment is established. Only statement 2 is true. Q29. The taxable event for income tax is the passage of the time period for which the tax is levied. False Q30. It is type of fund held by a government entity that is designated for special purposes. Special fund Q31. Which of the following is not true? When the inflow of cash or cash equivalents received or receivable is deferred, the fair value of the consideration is equal to the nominal amount of cash received or receivable. Q32. According to the GAM for NGAs, interest revenue is recognized On a time proportion basis using effective interest method Q33. These are economic benefits or service potential received or receivable by NGAs from an individual or other entity, as determined by a court or other law enforcement body, as a consequence of the individual or other entity breaching the requirements of laws or regulations. Fines Q34. Which of the following is not one of the fundamental principles for revenue under P.D No. 1445? All collections of revenue must be in the form of cash Q35. According to the GAM for NGAs, when the outcome of a service contract cannot be estimated reliably, revenue is recognized Only to the extent of costs that are expected to be recovered Q36. The receipt of which of the following may not give rise to revenue by a government entity? Inter-agency fund transfer Q37. Remittances of collections to the National Treasury are recorded as a debit to which of the following accounts? Cash – Treasury/Agency Deposit, Regular Q38. These do not meet the definition of an asset because the recipient is unable to control the access of the transferor to the future economic benefits or service potential embodied in the item pledges. These are unenforceable undertakings to transfer assets to the recipient entity. Pledges

Q39. According to the GAM for NGAs, revenue from exchange transactions are measured at the amount of the cash received. False Q40. When an uncertainty arises about the collectability of an amount already included in revenue, the uncollectible amount, or the amount in respect of which recovery has ceased to be probable, is recognized as An impairment loss

Q41. Entity A sells goods with a list price of 100,000 on account. The credit term is 20% and 10%. The journal entry to recognize the revenue includes all of the following except A debit to sales discount for 28,000 Q42. A government entity collects fees for the processing of certain permits. The processing of a permit would normally take a few minutes. The processing fee is collected upon issuance of the permit. This government entity would normally recognize revenue from permit fees Upon collection of the fee Q43. Which of the following does not give rise to revenue from assistance or subsidy? Inter-agency fund transfer Q44. The main source of revenue for the government is taxes. True Q45. Taxes are compulsory payment, imposed on person or activities intended to provide revenue to the government. Taxes include fees, fines and penalties. False Q46. When an amount already recognized as a revenue becomes subsequently uncollectible, it is Recognized as an expense Q47. Statement 1: All revenue accruing to the departments, offices and agencies by virtue of the provisions of existing laws, orders and regulations shall be deposited in the National Treasury or in a duly authorized depository of the government and shall accrue to the general fund of the government… Statement 2: Only when authorized by law and following such rules and regulations as may be issued by the Permanent Committee… Both statements are true. Q48. When cash flows are deferred, the fair value of the consideration receivable is its present value. True Q49. According to P. D. 1445 (5)... Amounts received in trust and from business-type activities of government may be separately recorded. Q50. Revenues of a government entity arise from exchange transactions only. False

ACCOUNTING FOR DISBURSEMENTS AND RELATED TRANSACTIONS 1. Statement 1: Government entities are allowed by law to make purchases using credit card. Statement 2: The Department of National Defense is one government entity allowed to use credit card for payments Both statements are true. 2. Entity A purchases office supplies from an authorized merchant using an electronic card. The journal entry to record this transaction includes a Credit to Accounts Payable 3. Statement 1: According to the GAM for NGAs, the Advice to Debit Account (ADA) mode of disbursement can be used only if the payee maintains an account in the same bank where the government entity maintains an account Statement 2: Land Bank of the Philippines is the sole government servicing bank where Advice to Debit Account (ADA) mode of disbursement can be done Both statements are false

4. According to the GAM for NGAs, cash disbursements are made through Cash advances to authorized personnel 5. When a government agency pays an account and withholds tax, the journal entry includes a credit to Due to BIR 6. Statement 1: Due to strict internal control measures, a government entity can only disburse funds via cash or check Statement 2: Checks can be MDS or commercial checks Only statement 2 is true 7. Statement 1: No additional cash advance shall be given to any official or employee unless the previous cash advance given to him/her is first liquidated. Statement 2: Liquidation of cash advance for foreign travel should be done 30 days upon return to workstation. Only statement 1 is true 8. All of the following are considered valid cashless disbursements except: Payment to a supplier through GCash 9. Statement 1: The Non-Cash Availment Authority (NCAA) is a disbursement authority issued to a government agency with foreign service posts. Statement 2: The Department of Foreign Affairs has this kind of disbursement authority. Both statements are false 10. Statement 1: Disbursements through the Cash Disbursement Ceiling (CDC) results in the recognition of a loan payable in the books of accounts of the BTr. Statement 2: Since liability is recognized, the Cash Disbursement Ceiling (CDC) involves cash inflow to the BTr. Both statements are false. 11. Statement 1: Entity A may acquire equipment from a supplier, on account and a lender settles the account of A by directly paying the supplier the proceeds of a loan payable that is recorded in the BTr’s books Statement 2: this transaction is called Cash Disbursement Ceiling (CDC). Only statement 1 is true. 12. A certification on the availability of allotment is required before a disbursement of government funds is made. According to the GAM for NGAs, who shall issue the certification? Budget officer 13. Which of the following results in the recognition of payroll? Liquidation of cash advance for travel 14. Which of the following shall certify the availability of funds and completeness of supporting documents before the Head of Agency or his/her authorized representative can enter into a contract that obligate the government for the eventual payment of government funds? Chief accountant 15. Which of the following is not used in processing disbursements? ORs 16. Statement 1: All disbursements shall be made through Disbursement Vouchers (DV) or payroll. Statement 2: The head of the requisitioning unit shall approve any disbursements. Only statement 1 is true 17. According to the GAM for NGAs, accounting for Petty Cash shall be done using Imprest system 18. Statement 1: Under the Automatic Debit Arrangement (ADA) mode of disbursement, payments from a government entity are directly debited to the accounts of the payees through fund bank transfers. Statement 2: Automatic Debit Arrangement (ADA) works like a check, hence, once notified, the payee can go to the bank to withdraw the cash by presenting the notification. Both statements are false 19. Which of the following is not one of the modes of disbursements by a government entity? Payment thru Gcash

20. Which of the following is not a signatory in the LDDAP-ADA? Payee 21. The Chief Accountant shall charge obligations incurred against available allotment to ensure that No overdraft is incurred 22. The Petty Cash shall be replenished when Disbursements reach at least 75% or as needed 23. Which of the following accounts shall be debited in recording replenishment of PCF? Appropriate expense account 24. Which of the following accounts is credited in the books of a government entity to reflect a non-cash availment authority (NCAA) mode of disbursement? Subsidy from National Government 25. Which of the following accounts shall be debited once cash advance has been granted? Advances to Officers and Employees 26. When overpayment of expense related to the previous year is discovered, the journal entry to record the overpayment includes a Credit to accumulated surplus/(Deficit) 27. Which of the following statements regarding the disbursement of government funds is incorrect? Officials and employees authorized to travel shall be granted cash advance to cover traveling expenses. The amount granted shall be accounted for as “Due to Officers and Employees” 28. Which of the following is not true regarding cash advance for payroll? Advances for payroll may be used for encashment of checks or for liquidation of previous or other types of cash advances 29. This is used to recognize in the books of national government agencies, the constructive remittance to BIR and BOC of taxes’ duties withheld Tax Remittance Advice (TRA) 30. Statement 1: All disbursements require prior certification to establish their validity and legality Statement 2: A certification for fictitious obligation is void and results to criminal liability by the certifying officials. Both statements are true. 31. Entity A disburses a check chargeable against its checking account maintained with Government Servicing Bank. The journal entry to record disbursement involves a credit to which of the following accounts? Cash in Bank-Local Currency, Current Account 32. Which of the following government agencies will most likely be able to obtain disbursement authority in the form of Cash Disbursement Ceiling (CDC)? DFA 33. The entry in the books of a government agency with foreign service post to record the receipt of disbursement authority called Cash Disbursement Ceiling (CDC) includes a Credit to Subsidy from National Government 34. Which is the account credited when remitting government share for Pag-IBIG contribution? Due to Pag-IBIG 35. Entity A makes payment through bank transfer. This mode of disbursement is most likely through the use of a(an) Advice to Debit Account 36. Entity A has a foreign service post. During the period, it receives authorization from DBM allowing it to use the collections of its foreign service post to pay for the necessary operating expenses. The entry to record the disbursement authority includes a Debit to Cash-Constructive Income Remittance 37. Payments of checks that are chargeable against the Treasury Account are credited to the Cash-Modified Disbursement System (MDS) account 38. According to the GAM for NGAs, disbursements for salaries and wages shall be supported by

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Payroll The following disbursements are excluded from payment using LDDAP-ADA except Payment of government employee salaries Which of the following results to the recognition in the books of accounts classified as Personnel Services? Set up of payable for payroll Which of the following is true regarding disbursement through electronic Modified Disbursement System (eMDS)? The disbursement is made via an online transaction. It is an authority by an agency’s Central Office to its regional and operating units to cover the latter’s cash requirements. Notice of Transfer of Allocation (NTA) A government entity makes constructive remittance of taxes withheld to the BIR through Tax Remittance Advice (TRA). The entry in recording the transaction includes a Debit to Due to BIR This is used to recognize in the books of national government agencies, the constructive remittance to BIR and BOC of taxes and customs’ duties withheld. Tax Remittance Advice (TRA) When a government entity remits its collections to BTr, the journal entry to record the remittance includes a Debit to Cash-Treasury/Agency Deposit, Regular Entity A acquires an equipment on account and settles the account by debiting accounts payable and crediting subsidy from national government. The mode of disbursement used is most likely a/an Non cash availment authority Statement I: Under the ADA mode of disbursement, payments from a government entity are directly debited to the accounts of the payees through fund/bank Statement II: ADA works like a check, hence, once notified, the payee can go to the back to withdraw the cash by presenting the notification Both statements are false Which of the following is not a form of a disbursement authority? CBC Entity A wants to make disbursements online. Which of the following should Entity A do so that it can make valid disbursements online? Enroll with the eMDS of the LBP All Disbursement Vouchers (DVs) or Payroll shall be approved by the Head of agency Which of the following shall certify the availability of allotment before obligations can be incurred and disbursements are made? Budget officer A certification of availability of funds and completeness of supporting documents is required before a disbursement of government funds is made. According to the GAM for NGAs, who shall issue this certification? Chief accountant

PREPARATION OF GENERAL PURPOSE FINANCIAL STATEMENTS (GPFS) 1. Which of the following is not among the other reports required to be submitted by government entities to the COA? A completed 14 column worksheet in yellow paper 2. Statement 1: The condensed statement of financial position presents only the line items. Statement 2: The detailed statement of financial position presents all the asset, liability and equity accounts in the RCA. Both statements are true

3. Which among the following does not require a separate disclosure in the notes to financial statements? All of these 4. Closing entries ________ Remove the balances from the agency’s temporary accounts 5. The following are responsible for the preparation of financial statements except Cashier 6. According to the GAM for NGAs, government entities shall present expenses in the statement of financial performance according to the Either function or nature of expenses as a matter of accounting policy choice 7. Which of the following is a peculiar general purpose financial statement of government entities? Statement of Comparison of Budget and Actual Amounts 8. Which of the following is an adjusting event? Sale of inventories that evidences the correct NRV of inventories at the reporting date 9. Financial statements are free from material error and bias and can be depended on by users to represent faithfully that which it purports to represent or could reasonably be expected to represent. Reliability 10. These are financial statements that are required to be prepared at any given period or at a financial reporting period without closing the books of accounts. Interim reports 11. Statement 1: According to the GAM for NGAs, government entities shall present financial statements annually. Statement 2: However, government entities are also required to prepare interim financial statements on quarterly basis. Both statements are true 12. The closing of the ‘Cash – Treasury/Agency Deposit, Regular” account to the “Accumulated Surplus (Deficit)” account is presented in the statement of changes in equity Under the “Adjustment of net revenue recognized directly in net assets/equity” line item 13. Which of the following is not one of the components of a complete set of general purpose financial statements? Statement of Appropriations, Allotments, Obligations, Disbursements and Balances 14. Which of the following does not lead to the classification of a liability as a current? It is cash or a cash equivalent, unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date 15. These refer to financial statements intended to meet the needs of users who are not in a position to demand reports tailored to meet their particular information needs General Purpose Financial Statements 16. This is also termed as the adjusted trial balance Pre-closing trial balance 17. Finance lease payments pertaining to the reduction of the outstanding finance lease liability are classified in the statement of cash flows as Financing activities 18. According to the GAM for NGAs, the statement of financial position is presented in comparative form and in All of these 19. The NCA is least likely to be reported in which of the following financial statements? Statement of financial position 20. A government entity presents payments for purchases of items of PPE in the statement of cash flows Net of withholding taxes 21. Entity A presents its cash flows from operating activities using the direct method. Entity A holds foreign currencies. These are appropriately translated to the spot exchange rates at the reporting date. How should entity A present the translation difference in the statement of cash flows? As a reconciliation of the cash and cash equivalents at the beginning and end of the period, presented separately from the operating, investing, and financing activities

22. Statement 1: Government entities present information on other comprehensive income just like business entities. Statement 2: Under GAM for NGAs, correction of prior period errors is recognized directly in equity. Only statement 2 is true 23. Statement 1: In the statement of financial position of a government entity, current assets include those held primarily for trading. Statement 2: In the statement of financial position of a government entity, current liabilities include those due to be settled within 18 months after reporting date. Only statement 1 is true 24. The GAM for NGAs requires all of the following information to be displayed prominently and repeatedly on the face of the financial statements, except Name of the related registries used 25. A government entity recognizes the effect of this item in surplus or deficit rather than directly in equity. Receipt of notice of cash allocation 26. Which among the following are included in the computation of surplus or deficit for a period? The effect of changes in accounting estimates 27. Additional disclosures shall be made in the notes if an entity presents expenses by Function 28. A government entity presents payments for purchases of inventories in the statement of cash flows Net of withholding taxes 29. Changes in accounting policies are accounted for Any of these 30. Which of the following is an objective of the general purpose financial statements of government entities? To demonstrate the accountability of the entity for the resources entrusted to it 31. Which of the following is most likely applicable to a government entity but not to a business entity? Presenting a statement of financial position in a detailed format 32. It serves as the covering letter in transmitting the agency’s financial statements to the COA, DBM, and other oversight agencies and parties. Statement of management responsibility 33. According to the GAM for NGAs, the responsibility over financial statements rests with the entity’s management, particularly the Head of the entity and head of finance/accounting 34. Amounts in the statement of financial position show Cumulative balances from the formation of the entity up to the reporting date 35. Statement 1: The statement of comparison of budget and actual amounts shows the variances between actual results of the current and previous years. Statement 2: The inclusion of statement of comparison of budget and actual amounts in a complete set of financial statements of a government entity enhances the transparency of financial reporting of the government. Only statement 1 is true 36. When an entity presents expenses in the statement of financial performance by function, it shall provide additional disclosures in the notes that include all of the following except Capital outlays 37. These differences between the ‘actual amounts on comparable basis’, presented in the statement of comparison of budget and actual amounts, and amounts presented in the other components of financial statements occur when the approved budget is prepared on a basis other than the accounting basis. Basis Differences 38. Which of the following cash flows is presented in the financing activities section of a statement of cash flows? Amortization of a finance lease liability 39. The statement of financial performance of a government entity differs from the statement of profit or loss of a business entity in which of the following respects?

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The use of the term “surplus or deficit” rather than “profit or loss” Which of the following information is not reported in the statement of changes in net assets/equity? Effects of changes in accounting estimates Statement 1: Non-adjusting events are never recognized but are always disclosed. Statement 2: Prior period errors are corrected by retrospective restatement. Only statement 2 is true Statement 1: The statement of financial position is dated as at the reporting date. Statement 2: The government entity has the prerogative of choosing either condensed and detailed statement of financial position. Only statement 1 is true Statement 1: The statement of changes in net assets/equity shows in comparative form the changes affecting “Accumulated Surplus/(Deficit)”. Statement 2: The statement of changes in net assets/equity shows the effects of changes in accounting policies and corrections of errors. Both statements are true The effect of which of the following is recognized directly in equity rather than in surplus or deficit? Gains or losses on remeasuring available-for-sale financial assets Statement 1: The GAM for NGAs requires government entities to present expenses in the statement of financial performance according to the function of those expenses. Statement 2: The statement of financial performance is presented in comparative, condensed, and detailed formats. Only statement 2 is true The presentation requirements for statement of cash flows of government entities differ from the requirements of a business entity in which of the following respects? The presentation of cash flows from (used in) operating activities using the direct method only; the choice of using the indirect method is not available. The GAM for NGAs requires which of the following methods of presenting cash flows from operating activities in the statement of cash flows? Direct method Statement 1: The statement of financial performance of a government entity is the exact equivalent of the statement of comprehensive income of a business entity. Statement 2: The statement of financial performance of a government entity is prepared for different fund clusters. Only statement 2 is true The inclusion of a degree of caution in the exercise of judgments needed in making the estimates required under conditions of uncertainty, such that assets or revenue are not overstated and liabilities and expenses are not understated. Prudence Omission or misstatement of information could influence the decision of users or assessments made on the basis of the financial statements. Materiality Statement 1: The objectives of general purpose financial reporting in the public sector should be to provide information useful for decision making, and to demonstrate the accountability of the entity for the resources entrusted to it. Statement 2: Financial statements have a predictive or prospective role, providing information useful in predicting the level of resources required for continued operations, the resources that maybe generated by continued operations, and the associated risks and uncertainties. Both statements are true