AEC 34—ACB Assignment: Module 1 Problem [Link] OR FALSE. TRUE 1. Compared to the accounting for business and entities, government accounting places greater ‘emphasis on the sources and utilization of government funds and the management's stewardship over government resources. TRUE [Link] are the main source of funds of the government. TRUE 3. Other sources of funds of the government include fees, borrowings, and grants from other governments and international bodies. FALSE 4. Currently, the financial reporting of government entities is based on NGAS. *GAM for NGA’s FALSE. The principles used in the financial reporting of government entities are very unique that only a very few of these principles are similar to those that are applied to business entities. *not unique; most TRUE. The principles in the GAM for NGAs are similar to the principles in the PFRSs. FALSE 7. The GAM for NGS is promulgated by the Philippine Congress under the authority conferred to it undler the Philippine Constitution. *Commission on Audit TRUE 8. A unique financial reporting requirement of government entities is the use of fund cluster accounting. Under fund cluster accounting, separate books and reports are prepared for each type of fund held by a government entity. FALSE 9. The GAM for NGS is promulgated primarily to harmonize government accounting standards with the U.S. GAAP. “international accounting standards FALSE 10, An item is recognized as an asset if it meets both the “probable future economic benefits” and “reliable measurement” criteria, regardless of whether the item is a resource controlled arising from past events. *the item must meet the definition of asset, which includes that it must have arisen from a past events, Problem 1-2. MULTIPLE CHOICE Which of the following é a unique requirement of government accounting that is not required in the accounting for business entities? The use of double-entry recording system, The use of single-ent ry recording system, ‘The use of accrual basis of accounting The presentation of budget information in the financial statements. 2. What is the legal basis of COA in promulgating the GAM for NGAs? a. [Link]. 1445, State Audit Code of the Philippines. b. The Philippine constitution, &R.A.9298, The Philippine Accountancy Act of 2004. d. Philippine Public Sector Accounting standards (PPSAS) 3. Which of the following is task in keeping the general accounts of the government, supporting vouchers, and other documents?CoA, b. DBM cc. NGAs 6. Congress ‘The Bureau of Treasury (BTR) is responsible for a. promulgating accounting and auditing rules and regulations. b. the formulation and implementation af the national budget with @ goal of attaining the nation’s socio-economic objectives. c. feceiving and keeping national funds and managing and controlling the disbursements, thereat, d. directly implementing the projects of the government. According to the GAM for NGAs, the basis of accounting to be applied by government entities is, the, a. Cash basis b. Accrual basis Modified accrual basis d. Anyof these asa policy choice Government resources must be utlized efficiently and effectively in accordance with the law. According to P.D. No. 1445, who is directly responsible in implementing this policy? 3. Allemployees who are entrusted with the possession of govemment resources, b. The headof the government agency. . The COA d. Allelected officials ‘The transfer of government funds from one officer to another requires the prior authorization of the ‘Commission on Audi b. Headaffthe agency, ¢. The President of the Re public of the Philippines. d. Bureauof Treasury Mr. A, a government employee entrusted with the custody of government funds, was instructed by Mr. B (a politician) to release funds for the acquisition of a car as a birthclay gift for. Mir. Bs daughter, who will be having her 18“ birthday next week. To relieve Mr. A from any liability, What should Mr. Ado? a. MrsA shall not release the fund, but rather notify Mr. B, in weting that his instruction i egal [Link]-Ashat release the fund and then notity Mr. 8, in writing, that his instruction isiegal €. Mr-A shall release the fundbut retains 20% Commission. 4. Mr. A shall release the fund but requires Mr. B to promise, in wring, that the car shal be returned to the government after his daughter's birthday. Mr. €, a government employee entrusted with the custody of government funds has lost the government funds entrusted to him in a force majeure. What should Mr. C do to relleve him from liability? a. Mr. Cshouid immediately notifythe Head of Agency after 30 days. b. Me. Cshould immediately notify the COA within 30 days10. 11, 12, 13, 14, 15. Problem cc. Mr. Cshould imediately notify the Bureau of Treasury within 30 days. dd. Mr. Cshould keep the event a secret and wait for next funds to arrive. This reference to the attributes that make information usefulto user. a. Usefulness characteristics b. Quantitative Characteristics c. Qualitative Characteristics d. Fundamental principles information loses this qualitative characteristic itis not reported on a timely basis. a. Relevance b. Reliability c. Neutrality d. Materialty, Which of the following qualitative characteristics does an entity most likely would need to make some trade-offs? 2. Faithful representation and Substance over form. b. Materiality and relevance. c. Relevance andretiabilty. d. Understandability and comparability. An entity recognizes an estimated loss from the decline in value of a property. Which of the following is most likely the qualitative characteristic being applied by the entity? a. Reliability. b. Substance over form, ¢. Faithful representation, d, Prudenc: Which of the following is not one of the fun clusters of a government entity? 2. Regular Agency Fund b. Foreign Assisted Projects Fund, Special Account-Locally Funded/Domestic Grants Fund d. Business Related Funds. fe. Petty Cash Fund, To achieve a proper balance between relevance and reliability, the overriding consideration is. a. Howusers! needs are best satisfied. b. Relevance is always more important than reliability Reliability is always more important than relevance. d. Greater weight shall be given to relevance compared to reliability. 1-3. FOR CLASSROOM DISCUSSION How does government accounting differ from the accounting for business entities? a, Government accounting places more emphasis on profit-making. b. Govemment accounting Is very complex that only highly intellectual individuals can understand it cc. Government accounting places greater emphasis on sources and utilization of funds in accordance with the law and management's stewardship over government resources. entrusted to the entity,‘ Government accounting is specialized in nature that the principles applicable to business entities are never applicable to government entities, Which of the following is not a source of revenue for the government? b. c d Entity A (a government agency) is entrusted with government resources. Accor Taxes Fee collected by government agencies. Grants and donations from other governments ‘Contract price on government contracts awarded to private companies, to PD 1445, \who Is directly responsible for the efficient and effective utilization af these resources? b. c d ‘The government employees who have custody over the resources. ‘The Head of Entity A. ‘The COA staff stationed in Entity A The foot of entity A. Which of the following is not charged with government accounting responsibilty under the GAM for NGAs? b. Si d oa em. NGA House of Representatives The Department of Budget and Management. DBMS responsible for b. ‘ Promulgating accounting andauditing rules and regulations. The formulation and implementation of the national budget with the goal of attaining the nation’s socio-economic objectives. Receiving and keeping national funds and managing and controlling the disbursement thereat. Direety implementing the projects of the government. Which of the following is not one of the objectives of the GAM for NGAs? All of the following are real 4. To harmonize government accounting standards with Intemational standards To update the coding structure and accounts. ‘To update accounting books, registries, records, forms, reports, and financial statements. To update government accounting standards to be consstent with the provisions of U.S. GAAP. ments peculiar to a government entity. Which is not? Presenting budget information in the financial statements. Fund cluster accounting. Incorporating budgetary controls in the financial reporting system. ‘Accrual basis of accounting, Which af the following qualitative characteristics is improved when information is reported on a timely basis? b. Relevance Reliab. Understan dabitty AandBthe best estimate for a loss is 100,000. However, the entity deliberately Overstated the loss to 200,000. Which of the following qualitative characteristics is vielated? a. Prudence. b. Relibilty. © Aands 4. nothing is viotated. Which of the following financial statementsis peculiar to government entity? a. Balance Sheet. b. Statement of Cash Flows. c. Statement of Comparison of Budget and Actual Amounts d. Statement of Changes in Equity.Government Accounting Solman millan CHAPTER2 PROBLEM 4-1: TRUE OR FALSE [BB Tre budget preparation inthe Phitpries uses a“bettom-up" approach, Under this approach, the Budget preparation stars fom the highest levels ofthe goverment downto the lowest eves [BB An entity prepares its budget by simply rling-over the budget the previous year and agjusting each ne tem by 10% increment to reiect ination Tis process is described as zeo-based budgeting ‘After the budget call from the DBM, the proposed budget of various agencies are: ‘submitted to the Office af the President for review. [BIRR An enstycan incur obigations ater receiving notice ofits appropriation but before receiving the aliment [BREE Budget deliberations inthe Congress startin the House of Senate {HBBBE. A government enty mus first receive an altmentbefeeitcan incur ebigatons. IRBBBY. A covernment entity can make disbursements even before itreceives @ disbursement authriy ERI. Aceropaions aso cated obigattona autory {[Link] Notice of Cash Allocation (NCA isan author isued by the DBM to central, regional ane provincial oftces ane operating unis to cover their ash requirements {HBBB0. Responsitity accounting greatly enhances budget accourtabity because managers fare evaluatec onlin terms ofthe costs or other variables tat they conto, and therefor, budget deviations can be realy atrbuted to the managers accountable therefor, PROBLEM 2-2: MULTIPLE CHOICE 1 Which ofthe following does not property described the budget process used in the Philippines? 2. Bottom-up budgeting bb. Top-down budgeting cc. Zero-based budgeting 4. Non-ineremental budgeting2. Arrange the folowing steps according to the sequence that they appear inthe budget cycle. |. Allotment 1. Bicameral Deliberations IL Budget Accountabilty Reports IV. President's enactment of the GAA \V. Budget hearings with the OBM VIM I and Il V4 Ih Vand cll Vili Land tl GAN, (Il IV and I 3. Arrange the following steps according to the sequence that they appear inthe budget cycle. |. Alloiment Ul Disbursement Authority I Disbursement IV. Appropriation \.Incurrence of obligation a. MI 1,V and Il b.MIV4liland I MY, | Hand Il 4 This ype of budget is prepared in such a way that estimated revenues excaed estimated expenditures. . Excess budget . Obligations budget 6. Budget meal 5. This summarized an agency's fiscal year plans and performance targets. It shows the ‘agency's physical and financial plan, monthiy cash program, estimate of monthly income ‘and list of obligations that are not year due and demandable. ‘2. Budget Execution Documents (BEDS) bb. Special Allotment Release Order c. Stalement of Approved Budgel, Utiizations, Disbursements and Balances 1 Aning of Due and Demandable Obligations 6 tis an authorization issued by the DBM to NGAS to incur obligations. It is also referred toas Obligational Authority ‘a. Appropriation . Budget cal Budget hearings7. Itrefers to the amount contracted by a duly authorized administrative officer for which the ‘government is held lable. 2. Appropriation b. Allotment 4. Disbursement 8. Which of the following best describes the Natice of Cash Allocaton (NCA)? a. Itis a form of legislative authorization in the allocation of funds for specified purposes. ». Itis a form of authorization fg a government agency to incur obligations on behaif of the government aa 4d. Itis anotice received trom the Congress that cash is allocated forthe payment of planned expenditures. 9. Disbursements by goverment entitles are most commonly made through b. Cash c. Petty Cash Fund d. Credit Card 10. Responsibility accounting requires all ofthe following except ». identification of responsiblity centers c. distinction between controllable and non-conirolable costs 4. coding structure for responsiblity centersGovernment Accounting Solman Millan CHAPTER 3 PROBLEM 3-1: TRUE OR FALSE TBH. Technically, only the Jounals and Ledgers are considered accounting records; the Registries are budget records. TRIBE. Separate accounting records and budget registries are maintained for each fund cluster. FRIBBB. Government entities and business entities use the term obligation” or the phrase “incurrence of obligation” similarly. GEE. 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. BBE. A check disbursement is normally recorded as credit to the "Cash-Modified Disbursement System (MDS) Regular" account. TBE. 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. TURP’. At the end of each year, an adjustment is made to revert any unused NCA of a government entity, FRIBB. The GAM for NGAs requires the Collecting Officer to issue an official receipt to acknowledge the receipt of the Notice of Cash Allocation. [TIED The entry to record the reversion of unused NCAat the end of the period is the exact opposite of the entry used to record the receipt of NCA. FRIBEH 0. The remittance of amounts withheld to other government agencies, such as theBIR, BOC, GSIS, PhilHealth, and Pag-IBIG, is done through the TRA. PROBLEM 3-2: MULTIPLE CHOICE 1. The various registries maintained by government entities are considered, technically, as a. Book of Accounts c. General Ledgers d. Log books 2. Which of the following is recorded in the Obligation Request and Status (ORS)?a. Receipt of notice of appropriation b. Receipt of allotment from DBM c. Receipt of Notice of Cash Allacation from the DBM d Entering into employment contacts wih employees 3. This type of expenditure pertains to all types of employee benefits. a. Personal Services (PS) b. Maintenance and Other Operating Expenses (MOOE) c. Financial Expenses (FE) d. Capital Outlays (CO) 4. Entity A, a government entity, made disbursements for the travelling expenses of its personnel. These expenditures are most likely classified as. a. Personal Services (PS) b Maintenance and Other Operating Expenses (MOOE) c. Financial Expenses (FE) d. Capital Outlays (CO) 5. Which of the following is charged with the responsibility of keeping the general accounts and related documents of the government a. Commission om Audit (COA) b. Bureau of Treasury (BTr) c. National Government Agencies (NGAs) d. Department of Budget and Management (DBM) 6. A journal entry with a credit to the "Cash-Modified Disbursement System, Regular" account will most likely be recorded in the a. General Journal b. Special Journal c. Cash Disbursements Journal d. Check Disbursements Journal 7. Which of the following accounts is debited when a government entity remits its collections to the National Treasury? a, Cash-Tax Remittance Advice b. Cash-Modified Disbursement System (MDS), Regular c Cash-Treasury/Agency Deposit, Regular d. Cash — Collecting Officer 8. Which of the following accounts is credited when a government entity remits taxes withheld to the BIR? a. CashTax Ritanes Ades b. Cash-Modified Disbursement System (MDS), Regular c. Cash-Treasury/Agency Deposit, Regulard. Cash — Collecting Officer 9. Which of the following accounts is credited when a government entity remits contributions to the GSIS, PhilHealth and Pag-IBIG? a. Cash-Tax Remittance Advice b, c. Cash-Treasury/Ageney Deposit, Regular d. Cash — Collecting Officer 10. Obligations recorded in the registries but not yet in the accounting books are referred to as a b. Contingent liabilities c. Erroneous recording d. Unpaid obligations PROBLEM 3-3: MULTIPLE CHOICE 1, The receipt of an appropriation is recorded by a government entity in the a. RAOD b. ORS c. RAPAL 2. The incurrence of an obligation for future delivery of performance by the obligee is recorded by a government entity in the [Link] b. ORS c. RAPAL 3. The receipt of an appropriation is recorded by a government entity in the a. RAOD b. ORS ©. RAPAL [Link] 4. The entry to record the receipt of Notice of Cash Allocation (NCA) by a government entity is a. (Debit) Cash-Modified Disbursement System (MDS), Regular; (Credit) Accumulated Surplus (Deficit) b. c. (Debit) Cash-Collecting Officer; (Credit) Subsidy from National Government d. No journal entry. The event is recorded only in the Registries. 5. According to the Revised Chart of Accounts (RCA) issued by the COA, the “Subsidy fromNational Government” account is a(an) a. Asset account b. Liability acount . Revenue account d. Equity account 6. Which of the following is not one of the necessary closing entries of a government entity? a. Closing of the “Cash-Treasury/Agency Deposit, Regular’ account to the “Accumulated Surplus/(Deficit)’ account. b. Closing of the “Subsidy from National Government” account to the “Revenue and Expense Summary” account c. Closing of income and expense accounts to the "Revenue and Expense Summary" account. ‘stoatontielGoenevacat 7. A government entity pays an accounts payable. The entry to record the payment will most likely include a a. debit to the “Cash-Modified Disbursement System (MDS), Regular” account. b eredittothe ‘Duet BIR" account, c. credit to the “Cash-Treasury/Agency Deposit, Regular” account. d. None of these. The event is recorded only in the Registries and the Obligation Request and Status. 8. In accordance with the GAM for NGAs and the Revised Chart of Accounts, how does a government entity recognize the uncollectibility of accounts receivable? a. By debiting the “Bad Debts Expense” account. », By debiting the “Impairment Loss-Loans and Receivables” account, c. By debiting the “Allowance for Impairment-Accounts Receivable” account [Link] 9. The “Subsidy from National Government” account is credited when recording a a. receipt of NCA . reversion of unused NCA G. constructive remittance of customs duties or taxes withheld through TRA || 10. Expenditures to acquire long-term assets are most likely classified as a, Personal Services (PS) b. Maintenance and Other Operating Expenses (MOOE) c. Financial Expenses (FE) 4. Capt Ouays(CO)PROBLEM 94: MULTIPLE CHOICE 1. This is usedto recognize the constructive remittance of axes withheld tothe IR orcustoms dutes witeld to te BOC 8. Tax Remittance Advice (TRA) b._ Natie of Tox loan (NTA) ©. Tax nd Custome Remitonce Advice (TOPs) 4. Notie of Tax ReitancsAvieor(NTRA) 2. Which ofthe following dasenot affect the amount surplus a def that reported inthe ttemert of financial performance? a. recept of NCA . constructive remittance of tango withhele treugh TRA ©. cosingaf the “CashTreasury/Agancy Deposit Regular” account 4. adjustment ofthe “Cash-Macifed Disbursement System (MDS), Regula” account fr the Unused Notice of Caen Allocation, ©. Allafthace acct euplue or dei. 3. City received Notice of Cash Aocation (NCA) emcuning to P625 900 forthe year Unused NCA atthe endef the period amount to PE00D. Eny A remites taxes witheld io the BR amcuntng to P48,000 trough Tox emittance Avice (TRA) How much ithe "Net Financial Aasitenoe/Subaid’tobereported in ently As ctatementof inancial performenos? ‘a. 667,000, b. 19200 ©. $73,000 a0 Computation Subsidy form NG (NCA) 625,000 ‘Subsdy from NG (RA) 43.000 Unussd NCA i009) er. 0 4 nity, 2 goverment entity hac te olwing transactions duting the pti: Received Notice of Cash Alocation (NCA) amourtina to P7S0000. Enrned ‘otal revenue ofP240.000 frem bllngs and callections of uni nceme, Incurred total excenses of P885,000 emitted ttaltaves withheld of P140,000 othe BIRthrouch Tex Remittance Bavce THA) +The Casnavoatfedoispursement system (MDS) Regus” as an unused balance GF [Link] heen ofthe perie How much is the surlus(dfict) forthe peiod? a. (595,000) b. 185000 fe. 252,000 4 12000 Computation Revenue ‘2aq000 Expenses (85000, Surplus deft) from operations Subsdy from NG (NCA) ‘Subsdy from NG (TRA) Unused NCA Net nancial Assstance/Subsidy ‘Surplus Deficit forthe perioda ‘The trial balances of Eniiy A, a government entity, show te following amounts Unadiusted Trial Balance -P2,753,000 Adjusted Tal Balance - P2,765,000 2 Statement of Financial Position (Debit Column) - P1,860,000 ‘Statement of Financial Performance (Credit). - P,137,000 How much is the surplus (deficit) for the period? a. 252,000 b. 885,000 . (252,000) a. (743,000) ‘Computation: Agjusted Trial Balance (Dr. & Cr} 2,765,000 ‘Statement of Financial Position (Dr) (2,880,000) ‘Statement of Financiat Performance (Dr) 385,000 ‘Statement of Financial Position (Cr.) ‘Surplus (Deficit) for the period \Which af tre following expenditures is not shown in the statement of financial performance? a, Personnel Services (PS) b. Maintenance and Other Operating Expenses (MODE) ©. Capital Outlay (CO) d. Financial Expenses (FE) [Link] these expenditures are shown in the statement of financial performance. ‘The entries to recard the constructive remitiance af taxes withheld through Tax Remittance Advice include all ofthe following, except A debitto the "Cash-Tax Remittance Advice” account A creditto the "Gash-Tax Remitiance Advice” account ‘A debit to the "Subsidy from National Government” account A debit to the "Due to BIR" account All of these are included, “The receipt of Notice of Cash Allocation recorded in the a. Books of accounts (Jonmat and Ledger) b. Registry of Allotments and Nutice of Cash Allocation (RANCA) cs. aandh d. Mone cf these ‘Which of the following is not one of the specie jaumals prescribed by the GAM for NGAs? a. Sales Jounal Check Disbursements Journal b. Cash Disbursements Journal Cash Receipts Journal ‘The 8-digt Revised Chart of Accounts (RCA) Core for expenses starts with number al a & b 2 None of these