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. Allotment
II. Appropriation
III. Incurrence of obligation
IV. 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 PAG-
IBIG?

    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 

    Cash-Modified Disbursement System (MDS), Regular

Q33.
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

Q37. The receipt of NCA is recorded in the

RANCA

Q38. The 8-digit RCA code for expenses starts with number

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
 Payroll
39. The following disbursements are excluded from payment using LDDAP-ADA except
Payment of government employee salaries
40. Which of the following results to the recognition in the books of accounts classified as Personnel Services?
Set up of payable for payroll
41. Which of the following is true regarding disbursement through electronic Modified Disbursement System
(eMDS)?
The disbursement is made via an online transaction.
42. 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)
43. 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
44. 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)
45. 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
46. 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
47. 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
48. Which of the following is not a form of a disbursement authority?
CBC
49. 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
50. All Disbursement Vouchers (DVs) or Payroll shall be approved by the
Head of agency
51. Which of the following shall certify the availability of allotment before obligations can be incurred and
disbursements are made?
Budget officer
52. 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?
 The use of the term “surplus or deficit” rather than “profit or loss”
40. Which of the following information is not reported in the statement of changes in net assets/equity?
Effects of changes in accounting estimates
41. 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
42. 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
43. 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
44. 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
45. 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
46. 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.
47. 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
48. 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
49. 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
50. Omission or misstatement of information could influence the decision of users or assessments made on the basis
of the financial statements.
Materiality
51. 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