Review questions:

1. For numbers 1-3 refer to the following information:

The duly approved ABM for the FY 2013 showed the following:
Allotment
Appropriatio
Not Needing
Needing Clearance
Class
n
Clearance
PS
21,000,000
18,000,000
3,000,000
MOOE
15,000,000
10,000,000
5,000,000
Capital Outlay
13,000,000
10,000,000
3,000,000
Total
P 49,000,000
P 38,000,000
P 11,000,000
The corresponding Notice of Cash Allocation (NCA) was issued by the Department of Budget and
Management.
One of the transactions during the first quarter of the year included the payment of salaries and
allowances thru cash advances:
Salaries and Wages
PERA
Withholding Tax
Retirement and Life Insurance
Pag-IBIG
PhilHealth
Credit Union

4,850,000
500,000
670,000
452,750
150,000
250,000
150,000

1. How much allotment should be posted in the allotment column for PS?
A. 18,000,000
C. 3,000,000
B.
5,350,000
D. 21,000,000
2. How much should be posted in the allotment column of registry for MOOE and CO?
A. 20,580,000 ; 12,350,000
B. 10,000,000 ; 5,000,000
C. 10,000,000 ; 10,000,000
D. 17,100,000 ; 9,500,000
3. How much should be posted in the obligation column of the registry for payment of salaries and
Allowances.
A. 11,040,000
C. 12,000,000
B. 3,677,250
D. 5,350,000
4. The government agency remitted its counterpart in the salary contributions. What is the proforma
entry to record such transaction?
A. Retirement and Life Insurance Contribution
xx
Pag-IBIG Contribution
xx
Philhealth Contribution
xx
ECC Contribution
xx
Cash MDS, Regular
xx
B. Retirement and Life Insurance Contribution
xx
Pag-IBIG Contribution
xx
Philhealth Contribution
xx
ECC Contribution
xx
Cash Disbursing Officer
xx
C. Due to GSIS
xx
Due to Pag-IBIG
xx
Due to Philhealth
xx
Other Payables
xx
Cash NT, MDS
xx
D. Due to GSIS
xx
Due to Pag-IBIG
xx
Due to Philhealth
xx
Other Payables
xx
Cash Disbursing Officer
xx

5. The Agency paid a VECO bill amounting to P40,000, including tax of 3,000. The entry to record
this transaction would be:
A. Electricity
40,000
Cash NT, MDS
40,000
B. Accounts Payable
40,000
Cash NT, MDS
37,000
Due to BIR
3,000
C. Memo entry only.
D. No entry required.
6. In what registry should allotment for purchases of IT equipment be recorded?
A. RAOD-PS
B. RAOD-MO
C. RAOD-CO
D. RAOD-FE
For questions 7-11, refer to the following problem:
Allotment in the amount of P5,500,000 was released by the DBM with the corresponding NCA. The
release was for the construction of an office building. The DOST awarded the contract to ABC
Construction Company for a contract price of P5,000,000. ABC paid the required cash bond while
DOST issued a check to cover the mobilization fee. The billings are shown as follows:
1st Billing
35% completed (10% retention fee)
2nd Billing
80% completed (10% retention fee)
Final Billing
100% completed (10% retention fee)
7. How much should be posted in the obligation column of RAOD-CO?
A. 5,000,000
C. 4,750,000
B. 5,500,000
D. 5,225,000
8. What is the journal entry to record the mobilization fee?
A. Advances to Contractors
250,000
Cash MDS, Regular
250,000
B. Advances to Contractors
750,000
Cash MDS, Regular
750,000
C. Advances to Contractors
250,000
Perf/Bid/BBP
250,000
D. Advances to Contractors
750,000
Perf/Bid/BBP
750,000
9. For the first billing, how much should be credited to Guarantee Security/Deposits Payable?
A. 500,000
C. 192,500
B. 175,000
D. 262,500
10. How much should be debited to the Construction in Progress account on the second billing?
A. 2,475,000
C. 2,250,000
B. 1,750,000
D. 2,150,000
11. How much should be credited to Advances to Contractor in the second billing?
A. P337,500
C. P600,000
B. P262,500
D. P 150,000
12. Agency AC sold a 60% depreciated motor vehicle which had an original cost of P300,000 for
P200,000. The proceeds shall be deemed automatically appropriated for the purchase of
replacement higher capacity vehicle worth P500,000, net of applicable tax. The agency
subsequently received an NCA of P500,000 for the purchase of the said vehicle. What is the entry
to record the receipt from the disposal of the motor vehicle?
A. Cash Collecting Officer
200,000
Due to BTr
200,000
B. Cash Collecting Officer
200,000
Gain on Sale of Disposed Assets
200,000
C. Cash Collecting Officer
200,000
Accumulated Depn. Vehicles
150,000
Motor Vehicles
300,000
Due to BTr
50,000
D. Cash Collecting Officer
200,000
Accumulated Depn. Vehicles
150,000
Motor Vehicles
300,000
Gain on Sale of Disposed Assets
50,000

13. Agency X have an obligation for equipment per purchase order amounting to P800,000.
Subsequently, the agency liquidates the equipment acquired in full. The acquisition was provided
from the Procurement Sercice. The entry to record this transaction would be:
a. Memorandum entry in RAOCO
b. Office Equipment
800,000
Due from NGA
800,000
c. Subsidy from National Govt
800,000
Cash MDS, Regular
800,000
d. Accounts Payable
800,000
Cash MDS, Regular
800,000
14. The agency obligates the purchase of equipment per purchase order amounting to P200,000. The
entry for this transaction would be:
A. Memo entry only
B. Office Equipment
200,000
Accounts Payable
200,000
C. Office Equipment
200,000
Cash-National Treasury, MDS
200,000
D. Office Equipment
200,000
SING
200,000
15. What is the proforma entry to record the cancellation of a stale MDS check?
A. Cash MDS
xx
Accounts Payable
xx
B. Cash MDS, Regular
xx
Cash Collecting Officer
xx
C. Cash MDS, Regular
xx
Accumulated Surplus
xx
D. Cash Collecting Officer
xx
Accumulated Surplus
xx
For items 16 and 17
A cash advance was set up to cover the payment of salaries of employees in the amount of P80,000.
The cash advance was liquidated during the year. A week after the payment, the bookkeeper found
out that the employees were overpaid by P2,000. Subsequently, the bookkeeper notified the
concerned employees of said overpayment and requested for the refund.
16. What is the journal entry to record the remittance of the overpayment to the National Treasury?
a. Subsidy from National Government
2,000
Cash MDS, Regular
2,000
b. Subsidy from National Government
2,000
Cash Collecting Officer
2,000
c. Cash MDS, Regular
2,000
Due from Officers and Employees
2,000
d. Subsidy from National Government
2,000
Due from Officers and Employees
2,000
17. What is the journal entry to record the overpayment?
a. Due from Officers and Employees
2,000
Hazard Pay
2,000
b. Due from Officers and Employees
2,000
Salaries and Wages - Regular
2,000
c. Cash Collecting Officer
2,000
Hazard Pay
2,000
d. Cash Collecting Officer
2,000
Salaries and Wages Regular
2,000
18. If an agency does not have the authority to use the income earned, what entry must be prepared
to record the collection of hospital fees?
A. Cash Collecting Officer
xx
Accounts Receivable
xx
B. Cash Collecting Officer
xx
Accumulated Surplus
xx
C. Cash Collecting Officer
xx

Due to BIR
xx
D. Cash Collecting Officer
xx
SNG
xx
19. The following entry was recorded as an adjustment for the prepayment of rent::
Rent Expenses
xx
Prepaid Rent
xx
What was the original entry prepared?
A. Rent Expense
xx
Cash MDS, Regular
xx
B. Prepaid Rent
xx
Cash MDS, Regular
xx
C. Prepaid Rent
xx
Cash Disbursing Officer
xx
D. Rent Expense
xx
Cash Disbursing Officer
xx
20. Agency Z is a National Government Agency with an NCA from the DBM for MOOE amounting to
P5,000,000. Of the total amount, P4,275,000 was obligated and 80% was paid. The remaining
20% was recognized as accounts payable. How much is the un-obligated balance that should be
shown in the Registry for MOOE?
A. 725,000
C. 1,000,000
B. 825,000
D. 855,000
21. Using the data in number 20, how much is the utilization rate of the obligation?
A. 20%
C. 68.4%
B. 86%
D. 80%
22. Agency A had the following account balances for the year 2014:
Current Assets
10,000,000
Investment and Fixed
90,000,000
Assets
Other Assets
5,000,000
Liabilities
18,000,000
Contingent Liabilities
5,000,000
Contingent Assets
3,000,000
Determine the Accumulated Surplus for the year 2014:
A. 105,000,000
C. 87,000,000
B. 85,000,000
D. 82,000,000
23. The following data were taken from the accounting records of Agency YY on December 31, 2014
(in million pesos):
NCA received
150
Refund of excess cash advance
5
Salaries and wages Regular
55
Pay
ADCOM
2
PERA
10
Traveling expense Local
1
Electricity
20
Rent Expense
8
Office Supplies Expense
4
The unutilized portion of the Notice of Cash Allocation amounted to 25,000,000. What is the net
income over expense on December 31, 2014?
a. 15,000,000
b. 50,000,000
c. 45,000,000
d. 20,000,000
24. The following data were taken from the Statement of Income and Expenses and the Comparative
Balance sheet as well as various cash transactions for the year ended December 31, 2013:
(amount in million pesos)
Net Income over expenses
500
Increase in Withholding Tax
6
Payable
Decrease in Due from NGA
58

Depreciation

Office
Equipment
Decrease in Accounts Payable
Decrease in Supplies Inventory

5
30
23

How much cash is received from operating activities?

A. 460,000,000
C.562,000,000
B. 552,000,000
D. 490,000,000
25. The movement in cash of Agency A is shown below:
Proceeds from sale of marketable stocks
and bonds
Investment in GOCC
Remittance of Taxes withheld not covered
by TRA
Inter-agency transfers (Due From)
Receipt of NCA from DBM
Cash receipts from sale of goods or
rendition of services
How much is the cash is derived from operating activities?
A. 19,230,000
C. 18,500,000
B. 24,230,000
D. 13,370,000

12,000,000
7,000,000
2,100,000
570,000
18,500,000
3,400,000

26. Which of the following are commonly required to be disclosed?

I. Consolidation principles
II. Accounting for long-term investments
III. Adoption of policy on increasing benefit entitlements of the program members
IV. All changes in classification of accounts
a. I, II, III only
C. I and III only
b. I and II only
D. All must be disclosed in the Notes to FS
In answering numbers 1-10, refer to the following choices:
a. The first statement is true but the second statement is false.
b. The first statement is false but the second statement is true.
c. Both statements are true.
d. Neither of the statements is true.
1. S1: General income accounts of the government encompass all taxes imposed on income,
properties and use or sale of goods and services, taxes on international trade and transactions
and other taxes including fines and penalties.
S2: Specific income accounts of the government include all types of revenue or income generated
by agencies in the exercise of their administrative and regulatory function, income from public
entities or income from investments and income from grants and donations.
2. S1: A preclosing trial balance is prepared after adjusting entries are recorded in the general
journal and posted to the general ledger and shows the adjusted balances of all accounts.
S2: The statement of financial position is prepared from information taken directly from the
preclosing trial balance.
3. S1: The Budgetary accounts consist of appropriations, obligations and disbursements.
S2: Budgetary accounts are recorded in the agencys books of accounts.
4. S1: The NCA is the share of the Agency in the income of the National Government.
S2: The Notice of Cash Allocation received by the agency is net of the 5% tax for Personal
Services and 8% tax for Maintenance and Other Operating Expenses and Capital Outlays to be
withheld by the agency.
5. S1: The entry to record the acquisition of a fixed asset using the procurement arm of the DBM will
include a debit to the corresponding fixed asset acquired.

S2: When a government agency decides to purchase supplies from outside suppliers, the entry to
record the receipt of the supplies will most likely include a credit to Cash-National Treasury, MDS.
6. S1: According to Administrative Order No. 119, the responsibility for the fiscal operations of
offices and agencies of government is hereby declared to reside primarily with the respective
Heads of each office, agency, government-owned or controlled corporation and local government
unit.
S2: In accordance with said Administrative Order, each and every office is mandated to
strengthen its internal control system in coordination with the Department of Finance.
7. S1: Plan of Organization, an element of internal control, comprises the organizational structure
and the staffing complement that enable an organization to carry out its functions.
S2: Another element, Coordinate Methods and Measures refer to the systems of authorization,
policies, standards, accounting systems and procedures and reports used by the agency to
control its operations and resources and enable the various units to meet its objectives.
8. S1: Allotment refers to an authorization made by law or other legislative enactment, directing the
payment of goods and services out of government funds under specified conditions or for special
purposes.
S2: Appropriation is the authorization issued by the DBM to the agency which allows it to incur
obligations.
9. S1: Financial expenses such as bank charges, interest expenses, commitment charges and other
related expenses are included in the Maintenance and Other Operating Expenses.
S2: Cost of ending inventory of supplies and materials shall be computed using the moving
average method.
10. S1: The entry to record the acquisition of a fixed asset using the procurement arm of the DBM will
include a debit to the corresponding fixed asset acquired and a credit to Due from NGAs.
S2: When a government agency decides to purchase supplies from outside suppliers, the entry to
record the receipt of the supplies will most likely include a credit to Cash-National Treasury, MDS.
11. The following statements pertain to the preparation stage of the budget cycle. Find the correct
order.
I.
The agencies defend their proposed budgets before a technical panel of DBM.
II.
At the beginning of the budget preparation year, the DBM issues the National Budget Call
to all agencies.
III.
The departments and agencies are tasked to pair up with civil society organizations during
the preparation of their agency budget proposals.
IV.
An Executive Review Board deliberates over the programs and projects of the agency as
per the submitted budget proposal.
A. II, III, I, IV
C. I, IV, III, II
B. II, III, IV, I
D. II, I, III, IV
12. The following statements pertain to the execution stage of the budget cycle. Find the correct
order.
I.
DBM issues guidelines on the release and utilization of funds.
II.
DBM prepares an Allotment Release Program to set a limit for allotments issued to an
agency and on the aggregate.
III.
Allotments are either released by DBM to all agencies comprehensively through the ABM
and individually via SARO.
IV.
DBM issues a disbursement authority in the form of NCAs and in special cases, the NonCash Availment Authority (NCAA) and Cash Disbursement Ceiling (CDC).
A. II, I, III, IV
C. I, III, II, IV
B. I, II, III, IV
D. II, III, I, IV
13. That public office is a public trust demands that a higher set of general objectives be established;
a step beyond the internal control practices that prevail in private sector organizations. Hence,
the internal control in the public sector must conform to five general objectives. Which of the
following is not one?
A. Ensure economical, efficient and effective operations
B. Comply with laws and regulations
C. Adhere to managerial policies

D. Safeguard assets and limit liabilities

14. If the Zobel Museum, a not-for-profit organization, received a contribution of historical artifacts, it
need not recognize the contribution if the artifacts are to be sold and the proceeds are used to
A. Purchase buildings to house collections
B. Repair existing collections
C. Acquire other items for collections.
D. Support general museum activities
15. Save Philippine Wildlife, a research organization created to protect nearly extinct species of
fauna, received a P500,000 contribution from Ms. Lee. Ms. Lee stipulated that her donation be
used to purchase new computer equipment for Save Philippine Wildlife research staff. The
contribution was received in August of 2013, and the computers were acquired in January 2014.
For the year ended December 31, 2013, the P500,000 contribution should be reported by Save
Philippine Wildlife on its
A. Statement of financial position as deferred revenue
B. Statement of activities as temporarily restricted revenue
C. Statement of activities as deferred revenue
D. Statement of activities as unrestricted revenue
16. Take Care, a voluntary health and welfare organization, received the following contributions in
2014:
I.
P500 from donors who stipulated that the money not be spent until 2015.
II.
P1,000 from donors who stipulated that the contributions be used for the acquisition of
equipment, none of which was acquired in 2015.
Which of the above events increased temporarily restricted net assets for the year ending
December 31, 2014?
A. I only.
B. II only.
C. Both I and II.
D. Neither I nor II.
17. A hospital should report earnings from endowment funds that are restricted to a specific
operating purpose as
A. General fund revenues, when expended.
B. Endowment fund revenues, when expended.
C. General fund revenues, when received.
D. Endowment fund revenues, when received.
18. Which of the following statements pertaining to Not-for-profit organization is true?
A. In preparing the statement of cash flows for a not-for-profit organization, cash contributions
that are restricted for long-term purpose are classified as investing activities.
B. In Hospital accounting, restricted funds are not available unless the Board of Directors remove
the restrictions.
C. A not-for-profit organizations statement of financial position should report the net changes for
the net assets that are unrestricted, temporarily restricted and permanently restricted.
D. Medical center received an unrestricted bequest of P150,000 in 2010. This bequest should be
recorded as non-operating revenue.
19. Which of the following individuals is the Secretary of the Department of Finance?
A. Alan Purisima
C. Florencio Abad
B. Proceso Alcala
D. Cesar Purisima
20. The following agencies control the release of allotments and notice of cash allocations, except
one:
A. Department of Budget and Management
B. Bureau of Treasury
C. Commission on Audit
D. All of the abovementioned agencies control allotments and NCAs
21. The following are DBMs responsibilities, except one:
A. Design, prepare, and approve the accounting systems of government agencies.
B. Keep the general accounts of the national government.
C. Prescribe the forms, schedules of submission and other component of reporting system
needed to accomplish and submit the required information
D. Approve the ABM and issue allotments to agencies
22. The functions of COA include which of the following?

I.

II.
III.
A.
B.

To examine, audit and settle all accounts pertaining to the receipts and expenditures of the
national government and its subdivisions, constitutional bodies, government-owned and
controlled corporations, and nongovernmental entities receiving subsidy from the
government.
To serve as an instrument for the meeting of national socio-economic and political
development goals.
To keep the general accounts of the government.
I, II, III
C. I and III only
I and II only
D. II and III only

23. The objectives of NGAS include which of the following?

I.
To simplify government accounting toward eventual computerization.
II.
To conform to IFRS.
III.
To provide relevant periodic financial statements.
IV.
To serve as tool for managers and executives for effective and efficient monitoring of
government agency performance.
A. I and II only
B. I, II, III only
C. I, II, III, IV
D. I, III, IV only
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