TORRES, ELIJAH R.

GOVERNMENT ACCOUNTING (ACCTG 139)

BSA – M ID NO: 17-10320

MODULE 1: NATURE AND SCOPE OF THE NEW GOVERNMENT ACCOUNTING SYSTEMS

Learning Activity

I. Multiple Choice

1. It is the process of analyzing, recording, classifying, summarizing and communicating all transactions involving the
receipt and disposition of government funds and property and interpreting the results thereof.
a. Government auditing
b. Government budgeting
c. Government accounting
d. National government

2. Which is not charged with the government accounting responsibility?

a. Commission on Audit
b. Department of Budget and Management
c. National Government Agencies
d. Legislative Department

3. What is the role of the Bureau of Treasury in relation to government accounting responsibility?
a. To receive and keep national funds and manage or control disbursements thereof.
b. To design, prepare and approve the accounting systems of government agencies.
c. To keep the general accounts of the national government.
d. To prepare the annual financial report of the national government, its instrumentalities and government owned or
controlled corporations.

4. What is the legal basis of the Commission on Audit in prescribing the New Government Accounting System
manual? a. PD 1445
b. Constitution of the Republic of the Philippines
c. COA Circular No. 2002-003
d. PD 1445 and the Constitution of the Republic of the Philippines

5. The books of accounts are composed of the following:

a. Regular Agency books and National Government books
b. National Government books and books of original entry
c. Journals and general/subsidiary ledgers
d. Regular Agency books and books of original entry

6. The following are the systems followed in the New Government Accounting System. EXCEPT:
a. Commercial accounting
b. Double-entry bookkeeping
c. Responsibility accounting
d. Fund accounting

7. What is the basis of accounting under the New Government Accounting System?
a. Modified accrual
b. Cash basis
c. Accrual basis
d. Strict Accrual

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8. To provide for responsibility accounting, the New Government Accounting System uses a standard chart of
accounts with:
a. Three digits
b. Four digits
c. Five digits
d. Six digits

9. The New Government Accounting System must be comprehensive but flexible to ensure that the need of the users
of information can be addressed in a way that these will be understood even by those, who have no technical
knowledge of accountancy. These users include all EXCEPT:
a. Public managers
b. Officials and employees of the agency
c. Taxpayers
d. None of the above

10. The following are the objectives of the NGAS, EXCEPT:

a. Simplify government accounting
b. Conform to International Accounting Standards
c. Comply with the requirements of International Monetary Board
d. Generate periodic and relevant financial reports for better monitoring or performance

11. Special purpose fund is a fund appropriated for purposes other than those provided in the regular funds of
government agencies. Which of the following is a special purpose fund?
a. Organizational adjustment fund
b. Reimbursable fund
c. Sinking fund
d. General fund

12. Journals and ledgers are the books of accounts of the national government agencies. Which of the following
journals shall be used under the new government accounting system?
a. Journal of checks issued
b. Journal and analysis of obligations
c. Journal of bills rendered
d. General Journal

13. The books of original entry shall be used to record, in time sequence, financial transactions and information
presented in duly certified and approved accounting documents. What is the basis in recording the financial
transactions in the journals?
a. Journal Entry Voucher
b. Journal of Checks Issued
c. Journal and Analysis of Obligations
d. Journal of Bills Rendered

14. Regular Agency (RA) books shall be used to record the receipt and utilization of Notice of Cash Allocation and
other income/receipts, which the agencies are authorized to use and to deposit with Authorized Government
Depository Bank and the national treasury. Which of the following is NOT a Regular Agency book?
a. General Journal
b. General Ledger
c. Cash Journal
d. Cash Disbursements Journal

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BSA – M ID NO: 17-10320

Posttest
1. Define government accounting under the New Government Accounting System.
Government Accounting is defined, pursuant to Section 109 of PD 1445, as one which “encompasses the process of
analyzing, recording, classifying, summarizing and communicating all transactions involving the receipt and
disposition of government fund and property and interpreting the result thereof.”

2. Enumerate the objectives of the New Government Accounting System.

A. To produce information concerning past operations and present conditions;
B. To provide a basis for guidance for future operations;
C. To provide for control of the acts of public bodies and offices in the receipt, disposition and utilization of
funds and property; and
D. To report on the financial position and the results of operations of government agencies for the
information and guidance of all persons concerned.

3. Discuss briefly the ultimate objective of the Commission on Audit in shifting to the New Government Accounting
System.
To expedite the process of recording transactions and to ensure the generation of functional and user-friendly
financial reports, a shift to a simplified and updated accounting system was made. Specifically, the shift to the New
Government Accounting System was made in order to respond to the need for the following:
A. The adoption of a system that is in conformity with International Accounting Standards;
B. Pursuit of eventual computerization, which will include responsibility accounting, thereby ensuring
generation of various reports that are useful to management, lawmakers and the general public;
C. Generation of relevant and periodic financial statements; and
D. Effective tool for managers and executives in effective and efficient monitoring of agency performance.

4. Discuss the accounting responsibility of the following:

A. Commission on Audit – The Commission on Audit shall have exclusive authority, subject to the limitation
in this Article, to define the scope of its audit and examination, establish the techniques and methods required
therefore, and promulgate accounting and auditing rules and regulations, including those for the prevention and
disallowance of irregular, unnecessary, excessive, or extravagant or unconscionable expenditures, or uses of
government funds and properties.
B. Department of Budget and Management – The Department of Budget and Management shall be
responsible for the formulation and implementation of the National Budget with the goal of attaining our national
socio-economic plans and objectives. The Department shall be responsible for the efficient and sound utilization of
government funds and revenues to effectively achieve the country’s development objectives.
C. Bureau of Treasury – The Department is authorized to receive and keep national funds, manage and
control the disbursements thereof and maintain accounts of financial transactions of all national government offices,
agencies and instrumentalities.
D. National Government Agencies – Departments, bureaus, offices and others are required by law to have
accounting units which are to be of the same level with other units in the agency and under the direct supervision of
the Head of the Agency. Accounting personnel shall perform these duties in accordance with existing rules, laws,
regulations, procedures and comply with the reporting requirements of the Commission on Audit, Department of
Finance and the Department of Budget and Management: The following are their duties:
1. Maintain and keep the current accounts of the agency
2. Provide advice on the financial condition and status of the appropriations and allotments of the agency as
its head may require, and
3. To develop and conduct procedures designed to meet the needs of management.

5. What are the exemptions where the one-fund concept could not be applied?

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BSA – M ID NO: 17-10320

Separate fund accounting shall be done only when specifically required by law or by a donor agency or when
otherwise necessitated by circumstances subject to prior approval of the Commission, in which case, a Special
Purpose Fund may be created. Special Purpose Fund is a fund appropriated for purposes other than those provided
in the regular funds of the government agencies, such as:
A. Miscellaneous Personnel Fund – which is used to cover personnel benefits which are not provided for in the
regular budget of the agency
B. Calamity Fund – which is used to cover relief, rehabilitation, reconstruction and other services in connection with
calamities that may occur during the budget year
C. Organizational Adjustment Fund – which is used to cover budgetary requirements of a newly created organization,
program/project/activity within an agency

6. What are the objectives of responsibility accounting under the New Government Accounting System?
Responsibility accounting aims to:
A. Ensure that all costs and revenues are properly charged/credited to the correct responsibility center so
that deviations from the budget can be readily attributed to managers accountable therefore;
B. Provide a basis for making decisions for future operations; and
C. Facilitate review activities, monitoring the performance of each responsibility center and evaluation of the
effectiveness of agency’s operations.

7. Define the following:

a. Allotment – is the authorization issued by the Department of Budget and Management to an agency
thereby enabling the Agency to incur obligation up to a specified amount that is within legislation
appropriation.
b. Obligation – on the hand, refers to the commitment by a government agency arising from an act of a duly
authorized official, which binds the government to the immediate or eventual payments of a sum of money.
c. Notice of Cash Allocation – is an authorization issued by the Department of Budget and Management to
government agencies to withdraw cash from the National Treasury through the issuance of Modified
Disbursement System (MDS) checks or other authorized mode of disbursements.

8. Discuss fully the basic features of the New Government Accounting System.
The basic features are as follows:
Accounting Methods – A modified accrual basis of accounting shall be used. Under this method, all expenses shall
be recognized when incurred and reported in the financial statements in the period to which they relate. Income shall
be recognized on accrual basis except for transactions where accrual basis is impractical or when other methods are
required by law.
One Fund Concept - The NGAS adopts the one fund concept, and that is the general fund, which s generally
available for all functions of government Separate fund accounting shall be done only when specifically required by
law or by a donor agency or when otherwise necessitated by circumstances subject to prior approval of the
Commission, in which case, a Special Purpose Fund may be created.
Chart of Accounts and Account Codes - A new chart of accounts and coding structure with a three-digit account
numbering system (as compared with the previous codes of six-digits) shall be adopted. Accounts titles have been
changed and some titles have been added. There are no longer contingent accounts.

9. What are the differences between the new and the old government accounting system?
A. Under the old government accounting system, accounting entries were made manually, thereby, necessitating the
maintenance of numerous special journals complete with several wide columns. While under the new government
accounting system, in conformity with International accounting standards, pursues the eventual computerization
which will include responsibility accounting, thereby ensuring the generation of various reports that are useful to
management, lawmakers and the general public.

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BSA – M ID NO: 17-10320

B. Under the NGAS, the only basis of accounting is modified accrual. While, under the old system, the basis of
accounting are: cash basis for tax, grants and borrowings; accrual for operating income; and obligations accounting
for expenses and disbursements.
C. Under the old government accounting system, as provided by the Constitution, all income accruing to the agencies
shall accrue to the General Fund of the government; and all money collected on any tax levied for a special purpose
shall be treated as a Special- Fund. The NGAS adopts the one fund concept, and that is the general fund, which is
generally available for all functions of government Separate fund accounting shall be done only when specifically
required by law or by a donor agency or when otherwise necessitated by circumstances subject to prior approval of
the Commission, in which case, a Special Purpose Fund may be created.
D. Under the old government accounting system, the trial balance is a four- money column listings of all general
ledger accounts used in the operations of the agency, whether, the accounts are with or without balance. In the
NGAS adopts the two-money column trial balance similar to commercial accounting. The advantage of a two-money
column trial balance over a four-column one is that the presentation of financial transactions is very simple.

MODULE 2: ACCOUNTING FOR BUDGETARY ACCOUNTS

Posttest
A. Questions
1. What is the General Accounting Plan of government agencies/units? Enumerate and explain the accounting
systems in the NGAS - National.
The General Accounting Plan shows the overall accounting system of a government agency or unit. It includes the
source documents, the flow of transactions, its accumulation in the books of accounts and finally the conversion into
financial information or data presented in the financial reports. The following accounting systems are:
A. Budgetary Accounts System – encompasses the process of preparing the Agency Budget Matrix monitoring and
recording of allotments received by the agency from the Department of Budget and Management, releasing of Sub-
Allotment Advices to Regional Offices by the Central Office, issuance of SAAs / LAAs to Operating Units by the
Regional Office, and recording and monitoring of obligations.
B. Receipt or Income and Deposit System – This system covers the processes of acknowledging and reporting
income or collections, deposits of collection with Authorized Government Depository Bank or through the AGDB for
the account of Treasurer of the Philippines, and recording of collections and deposits in the books of accounts of the
agency. All collecting officers shall deposit intact all their collections, as well as collections turned over to them by
sub-collectors or tellers, with their AGDB daily or not later than the next banking day. They shall record all deposits
made in the Cash Receipts Record. At the end of each business day, the collecting officers shall accomplish the
Report of Collections and Deposits.
C. Disbursement System – Disbursement constitute all cash paid out during a given period either in currency (cash)
or by check. It may also mean the settlement of government payables/obligations by cash or by check. It shall be
covered by Disbursement Voucher or Petty Cash Voucher or Payroll. The Disbursement System involves the
preparation and processing of disbursement voucher, preparation and issuance of check; payment of cash; granting,
utilization, and liquidation/replenishment of cash advances.
D. Financial Reporting System – Generally, the are eight steps in the accounting cycle: analyzing the transactions,
journalizing the transactions, posting the journal entries, preparation of trial balance, adjusting the accounts, closing
the accounts, preparation of the financial statements, and reversing the accounts. Under the New Government
Accounting System, financial reporting includes the preparation and submission of trial balances, financial statements
and other reports needed by fiscal and regulatory agencies.

2. Enumerate and explain the different kinds of budget.

As to Nature
A. Annual Budget – A budget which covers a period of one year. It is the basis of an annual appropriation.
B. Supplemental Budget – a budget which supplements or adjust a previous budget which is deemed inadequate for
the purpose it is intended. It is the basis for a supplemental appropriation.

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BSA – M ID NO: 17-10320

C. Special Budget – a budget of special nature and generally submitted in special forms on account that itemizations
are not adequately provided in the Appropriation Act or that the amounts are not at all included in the Appropriation
Act.
As to Basis
A. Performance Budget – a budget emphasizing the program or services conducted and based on functions,
activities, and projects, which focus attention upon the general character and nature of work to be done, or upon the
services to be rendered.
B. Line-item Budget – a budget the basis of which is the objects of expenditures such as: salaries and wages,
traveling expenses, freight, supplies and materials, equipment, etc.
Balance Budget – it is a budget where the proposed expenditures are equal to or less than the estimated revenues.

3. Discuss briefly the budget process/cycle.

A. Budget Preparation – It begins with the issuance of a “budget call” by the Department of Budget and Management.
This documents outlines the priority areas of government activity applicable to the budget year, which begins a year
and one month hence. The Department of Budget and Management summarizes the proposals and submits an
analysis and recommendation on the agencies’ budget proposal, which are submitted to the President of the
Philippines before finalization and submission to Congress.
B. Legislative Authorization – The budget bill is tackled by Congress like any legislation. Thus, the Committee on
Appropriations of the House of Representatives holds public hearings on the proposed Budget. The General
Appropriation Bill presents the proposals of the President of the Philippines for new general appropriations in the
coming year. General provisions are also provided in the Bill, representing the expenditure rules and conditions
applicable to all agencies or to groups of agencies. Budget briefing is conducted whereby the various heads of
agencies would explain to the Congress the details of their respective budgets.
C. Budget Execution and Operation - Budget execution and operation is comprised, among others, of the following:
the establishment of authority ceilings on obligations, the evaluation of work and financial plans for individual
activities, the continuing review of government fiscal position, the regulation of fund releases, the implementation of
cash payment schedules and other related activities such as updating of planning and scheduling of activities. The
responsibility for monitoring budget execution and operation rests primarily with the Department of Budget and
Management and secondarily with the National Treasury.
D. Budget Accountability – The last phase of budget process consists of the following:
a. Periodic reporting by the government agencies of performances under their approved budget;
b. Top management review of government activities and the fiscal policy implementations thereof; and
c. The actions of Commission on Audit in assuring the fidelity of officials and employees by carrying out the intent of
the legislative regarding the handling of receipts and expenditures.

4. Enumerate and explain the budgetary accounts.

A. Appropriation - an authorization made by law or other legislative enactment, directing payment of goods and
services out of government funds under specific conditions or for special purpose.
B. Allotment - an authorization issued by the Department of Budget and Management to the government agency,
which allows it to incur obligations, for specified amounts, within the legislative appropriation.
C. Obligation - a commitment by a government agency arising from an act of duly authorized official which binds the
government to the immediate or eventual payment of a sum of money.

5. What are the registries maintained by the Department of Budget and Management?
A. Registry of Appropriations and Allotments (RAPAL) – general appropriations
B. Registry of Special Purpose Fund Appropriation (RESPFA) – special purpose funds
C. Registry of Allotments and Notice of Cash Allocations (RANCA) for its control and monitoring of the Notice of Cash
Allocation releases.

6. What is the registry maintained by the Bureau of Treasury for the purpose of monitoring bank transfers to replenish
its Modified Disbursements Scheme accounts?

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The Bureau of Treasury shall maintain the Registry of Notice of Cash Allocations and Replenishments (RENEP) for
the same purpose and for the monitoring of bank transfers it makes in replenishing its Modified Disbursements
Scheme (MDS) accounts.

7. What are the registries maintained by the government agencies/units? Explain briefly each registry.
A. Registry of Allotments and Obligations – Personal Services (RAOPS) shall be used to record allotments received
and obligations incurred for expenses classified under Personal Services, such as: basic pay, all authorized
allowances, bonuses, cash gifts, etc.
B. The Registry of Allotments and Obligations – Maintenance and Other Operating Expenses (RAOMO) shall be
used to record allotments received and obligations incurred for expenses classified under Maintenance and Other
Operating Expenses, such as: travelling expenses, supplies and materials, repairs and maintenance of property,
plant and equipment, representation expenses, training and seminar expenses, etc.
C. The Registry of Allotments and Obligations – Capital Outlay (RAOCO) shall be used to record allotments received
and obligations incurred for Capital Outlay, such as: purchase and construction of property, plant and equipment.
D. The Registry of Allotments and Obligation – Financial Expenses (RAOFE) shall be used to record allotments
received and obligations incurred for Financial Expenses, etc., to distinguish them from the regular maintenance and
other operating expenses.

8. Explain briefly the Tax Remittance Advice (TRA).

The Notice of Cash Allocation released to the government agency is reduced by the amount of the estimated taxes
expected to be remitted by the agency through the Tax Remittance Advice. Estimated taxes are computed based on
the following percentages: Personal Services - 8%; Maintenance and Other Operating Expenses - 5%; and Capital
Outlay - 5%. The Notice of Cash Allocation received by the government agency from the Department of Budget and
Management is net of the applicable percentage of Tax Remittance Advice based on the Notice of Cash Allocations
received.

9. What are the two documents/reports, which are required by the Department of Budget and Management to be
submitted on a regular basis?
The Department of Budget and Management requires national government agencies to submit, on a regular basis,
Budget Execution Documents (BEDs), which contain the agencies’ targets and plans for the current year, and Budget
Accountability Reports (BARs), which contain information on the agencies’ actual accomplishments and performance
for a given period.

10. Enumerate and explain the three disbursement authorities provided by National Budget Circular No. 508.
Agencies shall submit to the DBM their Monthly Cash Program (MCP) to reflect their monthly disbursement
requirements and shall indicate the portion to be funded out of the following disbursement authorities:
A. Notice of Cash Allocation (NCA) – This shall be used for the disbursements arising from Modified Disbursement
Checks issued, including those charged against Notice of Transfer of Allocation, and direct payments to external
creditors per validated debit account in the list of due and demandable accounts payable.
B. Non-Cash Availment Authority (NCAA) – This shall be used by agencies availing of foreign loan proceeds through
direct payments.
C. Cash Disbursement Ceiling (CDC) – This shall be used for allocation of foreign service posts (FSP) of the
Department of Foreign Affairs (DFA) and Department of Labor and Employment (DOLE) out of total income collected
from these foreign service posts.

B. Multiple Choice

1. It is the system of prescribing the procedures for recording appropriations, allotments and obligations.
a. Fund accounting
b. Budgetary accounting

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c. Obligation accounting
d. Government accounting

2. Its main concern is the availability and use of funds for public services.
a. Commission on Audit
b. Department of Finance
c. Bureau of Treasury
d. National Budgetary System

3. It is a statement of estimated receipts and estimated expenses of the government, which serves as basis for a
General Appropriation Act.
a. Statement of financial position
b. Statement of operations
c. National government budget
d. Local government budget

4. Which department prepares the national budget, which serves as the basis of the General Appropriation Act?
a. Executive Department
b. Legislative Department
c. Judiciary Department
d. National Government Agencies/units

5. It is the legislative consideration, review and approval of the national budget.

a. Preparation
b. Authorization
c. Execution
d. Accountability

6. It is the implementation of the national budget by different departments and release of allotments.
a. Budget preparation
b. Budget authorization
c. Budget execution
d. Budget accountability

7. It denotes the responsibility to others that one or more persons have for their actions and behavior.
a. Preparation
b. Accountability
c. Authorization
d. Execution

8. Separate registries shall be maintained to control the allotments, when should allotments be recorded in the
registries?
a. At the beginning of the year.
b. Quarterly.
c. When money of the government is already disbursed.
d. At the end of the year.

9. As specifically provided for in the New Constitution, no money shall be paid out of the National Treasury EXCEPT
in the pursuance of
a. Budget

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b. President’s executive order

c. Fund
d. Appropriation

10. It is the legislative authorization to make payments out of government funds under specified conditions and
specific purposes.
a. Appropriation
b. Allotment
c. Obligation
d. Budgeting

11. 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.
a. Obligation
b. Appropriation
c. Allotment
d. Fund release

12. 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.
a. Obligation
b. Appropriation
c. Allotment
d. Commitment

13. It is the functions and activities necessary for the performance of a major purpose for which a government entity
is established.
a. Program
b. Project
c. Resources
d. Internal control

14. The journal entry to be made in the books of government agencies/units upon receipt of Notice of Cash Allocation
is
a. Cash - National Treasury, MDS Subsidy Income from National Government
b. Cash in Bank - Local Currency, Current Account Subsidy Income from National Government
c. Cash in Bank - Local Currency, Savings Account Subsidy Income from National Government
d. Cash in Bank - Local Currency, Time Deposit Subsidy Income from National Government

15. To control the allotments and obligations of the four classes of allotments, the following registries shall be
maintained by government agencies/units.
a. RAOCO, RAOPS, RAOMO, and RAOFE
b. RAOCO, RAOPS, RAOMO, and RANCA
c. RAOCO, RAOPS, RAOMO, and RPI
d. RAOCO, RAOPS, RAOFE, and RPI

16. It is the formal document issued by the Department of Budget and Management to the head of the agency
containing the authorization, conditions and amount of allocation.
a. Special Allotment Release Order
b. Allotment and Obligation Slip

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c. Notice of Cash Allocation

d. Registry of Allotment and Obligation

17. In government accounting, which of the following is a personal service?

a. Telephone charge
b. Rent
c. Meal allowance for overtime work
d. Salaries and wages

18. In government accounting, which of the following is a capital outlay?

a. Salaries and wages
b. Repairs and maintenance
c. Land improvement
d. Merchandise inventory

19. It is the annual documents required at the onset of the budget execution phase, which contain the agencies’
targets and plans for the current year.
a. Agency Budget Matrix (ABM)
b. Annual Cash Program (ACP)
c. Budget Execution Documents (BEDs)
d. Budget Accountability Report (BARs)

20. It is a budget execution document that serves as an overall plan of the government agency encompassing the
targeted outputs and estimated obligations broken down by quarter.
a. Physical and Financial Plan (PFP)
b. Monthly Cash Program (MCP)
c. Estimate of Monthly Income
d. List not yet due and demandable obligations

21. It is a component of Budget Accountability Reports (BARs) that should be reported on monthly basis.
a. Monthly Cash Program
b. List not yet due and demandable obligations
c. Estimate of monthly income
d. Statement of allotments, obligations and balances

22. It is a disbursement authority representing Modified Disbursement Checks issued and direct payments to external
creditors per validated advice to debit account in the list of due and demandable accounts payable.
a. Tax Remittance Advice (TRA)
b. Notice of Cash Allocation (NCA)
c. Non-Cash Availment Authority (NCAA)
d. Cash disbursement Ceiling (CDC)

23. Government agencies are required to submit to the Department of Budget and Management their plans,
programs and targets for the year using the Budget Execution Documents (BEDs) on or before
a. January 1
b. January 31
c. April 15
d. December 31

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24. In order to provide agencies with sufficient time to implement projects/activities covered by realignment, request
for realignment of released allotments under the prior year budget shall be requested until
a. January 1 of the current year
b. April 1 of the current year
c. June 30 of the current year
d. December 31 of the current year

25. Effective January 2009, the following modifications in the Notice of Cash Allocation (NCA) release shall be
adopted, EXCEPT
a. Notice of Cash Allocations to cover regular requirements of agencies shall be comprehensively released with a
breakdown of the monthly NCA requirements by operating unit.
b. Additional NCAs shall be released corresponding to the SAROs to be issued to the operating units on the basis of
the separate Monthly Cash Program submitted by the operating units.
c. All NCAs programmed and credited for the month whether part of the comprehensive release or constituting the
additional NCA release, shall be valid only until the last working day of the fiscal year.
d. Any unutilized NCA corresponding to the book balance, net of outstanding checks, shall automatically lapse at the
end of that month.

26. All Special Allotment Release Orders (SAROs) issued chargeable against General Appropriation Act (GAA) of a
Fiscal Year (FY) as re-enacted shall be valid for obligation while the new GAA is not yet in effect. What is the
effective date of the new GAA?
a. Immediately after the approval by Congress.
b. Immediately after the approval by the President of the Philippines.
c. Fifteen days after the approval by Congress.
d. Fifteen days after the approval by the President of the Philippines.

27. According to National Budget Circular No. 519, Guidelines on the Release of Funds, dated March 27, 2009, the
obligational authorities for agencies to enter into commitments or incur obligations during the year shall be issued
comprehensively through:
a. Agency Budget Matrix (ABM) only
b. Issuance of Special Allotment Release Orders (SAROs) only
c. Agency Budget Matrix and issuance of SAROs
d. Either ABM or issuance of SAROs

28. According to National Budget Circular No. 519, Guidelines on the Release of Funds, dated March 27, 2009, the
validity of funds available to the agency provides the following, EXCEPT
a. Continuing appropriation for MOOE and capital outlay shall be for two years.
b. Appropriations under GAA including personal services shall be for two years.
c. Appropriation under GAA shall for two years except personal service which shall lapse at the end of the current
year.
d. All SAROs issued chargeable against GAA under R.A. 9498 as re-enacted, shall be valid while the new GAA is not
yet in effect.

MODULE 3 THE NEW STANDARD CHART OF ACCOUNTS

POSTTEST
I. Questions

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1. Define and discuss the underlying reason why a chart of accounts is prescribed in the New Government
Accounting System.
The Chart of Accounts provides the framework within which the accounting records are constructed. It is defined as a
list of general ledger accounts consisting of real and nominal accounts prepared for the use of national and local
government units. As part of the continuing effort of Commission on Audit to simplify government accounting and
implement the Computerized New Government Accounting System, the new chart of accounts and coding structure
with a three-digit account numbering system shall be adopted.

2. What the two general classifications of income/revenue under the new standard chart of accounts? Explain briefly.
The two general classifications of income/revenue are General Income Accounts and Tax Revenue Accounts. The
General Income Accounts, this account classification encompasses all types of revenue or income generated by
government agencies in the exercise of their administrative and regulatory function and others. While Tax Revenue
Accounts encompasses all taxes imposed on taxable income, properties, and use or sale of goods or services, taxes
on international trade and transactions and their taxes including fines and penalties.

3. Give examples of general income.

The examples of general income are permits and licenses such as fishery rental fees, permit fees, registration fees;
service income such as affiliation fees, inspection fees, toll and terminal fees; business income such as hospital fees,
rent income, tuition fees income from dormitory operations; and subsidy income such as subsidy income from
national government, subsidy from central office and others.

4. What are the three classifications of expenses under the new standard chart of accounts? Give examples.
The three classifications of expenses are Personal Services, Maintenance and Other Operating Expenses and
Financial Expenses.
Personal Services – these account include basic pay such as salaries and wages for regular, uniformed/military,
casual, contractual and other compensation for instance honoraria, allowances, cash gift and others. Also included
are the personal benefits contributions such PAG-IBIG and Phil health contributions.
Maintenance and Other Operating Expenses – these account include expenses necessary for the regular operations
of an agency like traveling expenses, training and scholarship expenses, supplies and materials, utility expense and
others. Also included are the land improvements, buildings, machinery and equipment and public infrastructures.
Financial Expenses – these account include bank charges, commitment fees, debt service to subsidy to GOCCs,
documentary stamps expenses, interest expense and others.

5. Define intermediate accounts? Give examples.

Intermediate accounts are accounts which are closed ultimately to the Government Equity account at the end of the
accounting period. These include Cost of Goods Sold, Income and Expense Summary, Prior Years’ Adjustment,
Retained Operating Surplus, Subsidy to Regional Offices/Staff Bureaus and Subsidy to Operating Units, among
others.

II. Multiple Choice

1. These are the accounts, which are closed to the government equity at the end of an accounting period.
a. Income and expense accounts
b. Intermediate accounts
c. Contra accounts
d. Adjunct accounts

2. This is a new account under the New Government Accounting System.

a. Cash in National Treasury
b. Cash-Collecting Officer

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c. Cash-Disbursing Officer
d. Allowance for Doubtful Accounts

3. Which of the following is other current assets account?

a. Other prepaid expenses
b. Guarantee deposits
c. Deposits on letters of credit
d. Advances to contractors

4. The account used to record reduction in the value of trade receivable accounts, which is estimated as uncollectible
based on COA standard/policies.
a. Allowance for bad debts
b. Bad debts expense
c. Allowance for doubtful accounts
d. Doubtful accounts expense

5. Which of the following is not a personal service expense?

a. Cash gift
b. Representation allowance
c. Transportation allowance
d. Travelling expense

6. Which of the following is NOT other asset?

a. Work Animals
b. Arts, Archeological Specimen and Other exhibits
c. Items in transit
d. Construction in Progress - Agency assets

7. Which of the following is an intra-agency payable?

a. Due to bureau of internal revenue
b. Due to local government units
c. Due to operating units
d. Due to national treasury

8. Which of the following is NOT other liability account?

a. Interest payable
b. Guarantee deposit payable
c. Currency swap payable
d. Tax refund payable

9. Which of the following is not an intermediate account?

a. Income and expense summary
b. Cost of goods sold
c. Government equity
d. Retained operating surplus

10. Which of the following is local tax revenue?

a. Capital gain tax
b. Donors tax
c. Professional tax

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d. Occupation tax

11. Which of the following is not a gain/loss account?

a. Gain/loss on foreign exchange
b. Gain/loss on sale of securities
c. Prior years’ adjustments
d. Miscellaneous income

12. Which of the following is maintenance and other operating expense?

a. Bank charges
b. Documentary stamps expense
c. Interest expense
d. Loss of assets

13. Which of the following is financial expense?

a. Debt service subsidy to GOCCs
b. Tax refund
c. Bad debts expense
d. Miscellaneous expenses

14. Under the NGAS, which of the following is considered as utility expense?
a. Postage and deliveries
b. Internet expense
c. Telephone expense - landline
d. Cooking gas expense

15. In the new standard chart of accounts of the NGAS, the cash account includes all except
a. Cash in Vault
b. Cash in bank - Foreign currency
c. Cash - Deposit
d. Cash - Disbursing Officer

16. In the new standard chart of accounts of the NGAS, the receivable accounts include all except
a. Due from officers and employees
b. Due from national treasury
c. Currency swap receivable
d. Interest receivable

17. The general income in the Revised Chart of Accounts, per Circular No. 2003- 001, includes
a. National taxes
b. Local taxes
c. Gain accounts
d. Subsidy income

18. The three digit code of assets in the revised Chart of Accounts, per Circular No. 2003-001 is
a. 100-299
b. 300-399
c. 400-499
d. 500-549

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19. The Cash in Bank - Local Currency accounts in the new standard chart of accounts in the NGAS include
a. Cash - National Treasury, MDS
b. Cash - Bangko Sentral ng Pilipinas
c. Cash - Collecting Officer
d. Cash - Deposit

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