Republic of the Philippines

Cagayan State University

ANDREWS CAMPUS
Caritan, Tuguegarao City

COLLEGE of BUSINESS ENTREPRENEURSHIP and ACCOUNTANCY

Accounting for government, not-for-profit organizations and specialized institutions
Preliminary Examination (2nd Semester SY 2018-2019)

TEST I.
Direction: Identify the choice that best completes or answers the question. Write your answer on the Answer Sheet
provided.

1. Department of Energy received an allotment for capital outlay of P30 million on March 9, 2017. Until when is the
validity of this allotment?
A. March 31, 2017 C. December 31, 2018
B. December 31, 2017 D. March 9, 2018

2. The budgetary accounts of the Department of Education showed the following:

Notice of
Cash
General appropriation Appropriation Allotment Obligation Allocation
Personnel Services 20,000,000 8,000,000 6,000,000 5,000,000
Maintenance and Other
Operating Expenses 28,000,000 24,000,000 20,000,000 17,00,000
Capital Outlay 100,000,000 80,000,000 50,000,000 40,000,000
Financial Expenses 160,000 40,000 30,000 30,000

What is the total unreleased appropriation?

A. 36,120,000 C. 112,040,000
B. 36,010,000 D. 67,010,000

3. In Number 2, the balance of unobligated allotment is:

A. 36,120,000 C. 36,010,000
B. 72,130,000 D. 14,000,000

For Item 4-6, consider the following data:

The approved appropriation of Department of Labor and Employment (DOLE) for 2018 was P10,000,000. 90%
of this appropriation represents the “For Comprehensive Release” appropriation. DOLE received the Notice of
Cash Allocation covering the 60% of the FCR appropriation, net of P250,000 tax to cover its cash requirements
for January to June 2018. During the first semester, the amount of obligations incurred was equivalent to 80% of
the allotment received and 75% of these obligations was paid by checks.

4. What is the balance of unpaid obligation?

A. 2,000,000 C. 1,800,000
B. 5,400,000 D. 7,200,000

5. What is the balance of unobligated allotment?

A. 2,800,000 C. 1,800,000
B. 7,200,000 D. 1,000,000

6. How much disbursement should be reported in the Monthly Report of Disbursement of DOLE?
A. 5,400,000 C. 1,800,000
B. 6,000,000 D. 7,200,000

7. Department of Trade and Industry (DTI) executed its programs and projects for 2018. Which of the following
documents is NOT required to be prepared by DTI during this stage?
A. Financial Plan C. Physical Plan
B. Monthly Report of Disbursement D. Monthly Disbursement Program

8. During the execution phase of the budget cycle, national government agencies are required to submit budget
execution documents (BEDs) which include the Month Disbursement Program (MDP). During the budget
accountability phase, they are required to submit budget and financial accountability reports (BFARS). Which of
these BFAR shall be compared to the MDP to measure the performance of the agencies as to spending the
national funds?

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 Republic of the Philippines
Cagayan State University
ANDREWS CAMPUS
Caritan, Tuguegarao City

COLLEGE of BUSINESS ENTREPRENEURSHIP and ACCOUNTANCY

A. Quarterly Physical Report of Operation
B. Statement of Appropriations, Allotments, Obligations, Disbursements and Balances
C. Monthly Report of Disbursements
D. List of Allotments and Sub-Allotments

9. Which of the following is INCORRECT about national government budget process?

A. Budget preparation encompasses the submission of budget of receipts and expenditures by the President to
Congress.
B. Budget accountability is concerned, among others, with the release of funds in the form of allotments and
Notice of Cash Allocations.
C. Budget preparation starts with the issuance of a budget call.
D. Legislative authorization involves the enactment of the General Appropriations Act.

10. Batanes General Hospital, a government hospital, received an allotment for Capital Outlay amounting to
P10,000,000. In accordance with Tax Remittance Advice system, how much NCA will be issued to the Hospital?
A. 10,000,000 C. 9,500,000
B. 500,000 D. 9,200,000

11. Department of Agriculture received Notice of Cash Allocation for its MDS regular account amounting to P5
million on May 25, 2017. Based on fund release system for 2017, until when can Department of Agriculture use
the NCA?
A. Last working day of May 2017. C. Last working day of July 2017
B. Last working day of June 2017 D. Last working day of December 2017

12. Considering the same information in Number 11, but instead the Notice of Cash Allocation was deposited in the
MDS special account of the Department of Agriculture. Until when can the Department use the NCA?
A. Last working day of May 2017. C. Last working day of July 2017
B. Last working day of June 2017 D. Last working day of December 2017

13. Department of Education received an authorization from DBM to incur obligation amounting to P10 million,
which is within its appropriation. The authorization received by the Department of Education is:
A. Allotment C. Obligation
B. Notice of Cash Allocation D. Fund

14. Which of the following is NOT a disbursement authority that can be issued to a National Government Agency?
A. Notice of Transfer of Allocation C. Non-Cash Availment Authority
C. Notice of Cash Allocation D. Special Allotment Release Order

15. In 2017, the Department of Interior and Local Government (DILG) received the following authorities from DBM:
GAARD-P15 million; SARO-P5 million; and NCA-P18 million. How much is the maximum obligation that DILG
can incur for the year?
A. 15 million C. 20 million
B. 38 million D. 23 million

16. In number 15, how much is the maximum cash that DILG can disburse?
A. 38 million C. 33 million
B. 20 million D. 18 million

For Item 17-21, consider the following data:

The NCA comprehensively released to Department of Agrarian Reform on January 3, 2017 amounted to
50,000,000 to cover cash requirements from January to June 2017. The monthly utilization of such is shown
below:
Month NCA Amount Utilized NCA
January 8,000,000 7,500,000
February 8,000,000 7,800,000
March 8,000,000 7,900,000
April 8,000,000 7,500,000
May 8,000,000 8,000,000
June 10,000,000 9,000,000

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 Republic of the Philippines
Cagayan State University
ANDREWS CAMPUS
Caritan, Tuguegarao City

COLLEGE of BUSINESS ENTREPRENEURSHIP and ACCOUNTANCY

Total 50,000,000 47,700,000

17. How much is the available NCA for the month of March?
A. 8,000,000 C. 800,000
B. 8,700,000 D. 0

18. How much is the balance of NCA as of the end of May?

A. 0 C. 1,300,000
B. 500,000 D. 8,000,000

19. How much cash must be credited to the account of DAR for the month of February?
A. 8,000,000 C. 200,000
B. 8,500,000 D. 700,000

20. How much is the available NCA for the month of June?
A. 10,000,000 C. 1,000,000
B. 10,500,000 D. 0

21. How much NCA was unutilized for the second quarter?
A. 800,000 C. 1,500,000
B. 1,000,000 D. 0

22. Which of the following is NOT an obligational authority that can be issued to a national government agency?
I. General Appropriation Act as Release Documents (GAARD)
II. Special Allotment Release Order (SARO)
III. Non-Cash Availment Authority
A. I only C. I, II, and III
B. I and II only D. III only

23. The General Appropriations Act for 2017 containing a national budget of P3.0 trillion was signed into law by the
Philippine President on December 28, 2016. When is the effectivity of this budget?
A. December 28, 2016 C. January 1, 2017
B. December 29, 2016 D. January 1, 2016

24. On August 28, 2017, DPWH deposited in the National Treasury a receipt from another Department for the
construction of a public road. Upon completion of the project, an NCA was released to DPWH deposited in its
MDS Trust account. Until when can this be used by DPWH?
A. August 31, 2017 C. December 31, 2017
B. September 30, 2017 D. August 28, 2018

25. It is the formal document issued by the Department of Budget and Management to the head of agency containing
the authorization, conditions and amount of allocation.
A. Special Allotment Release Order C. Obligational Authority
B. Notice of Cash Allocation D. General Allotment Release Order

26. It is a budget release document that shall serve as the obligational authority of national government agencies upon
the enactment of the General Appropriations Act?
A. Budget Execution Documents C. Special Allotment Release Order
B. General Allotment Release Order D. General Appropriation Act as the Release Documents

27. Department of Health received an amount of P2 million exclusively for the purchase of an ambulance from the
Department of Public Works and Highway. What fund category does this receipt belong?
A. Trust funds C. Revolving funds
B. Retained income/funds D. Special purpose funds

28. Which is not charged with government accounting responsibility?

A. Department of Budget and Management C. Department of Health
B. Congress D. Commission on Audit

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 Republic of the Philippines
Cagayan State University
ANDREWS CAMPUS
Caritan, Tuguegarao City

COLLEGE of BUSINESS ENTREPRENEURSHIP and ACCOUNTANCY

29. Which of the following are personnel services in government accounting?
I. Representation allowance
II. Security services
III. Salaries and Wages-regular
IV. Repairs and maintenance

A. I and IV only C. I, II and IV only

B. I and III only D. I, II, III, and IV

30. In government accounting, which of the following are Maintenance and Other Operating Expenses?
I. Utilities expenses
II. Janitorial services
III. Uniform allowance
IV. Year-end Bonus

A. I and III only C. I and II only

B. II and IV only D. III and IV only

31. It is a system that relates financial results to segment, unit, or function of a government agency headed by a
manager.
A. Government accounting C. Responsibility accounting
B. Budgetary accounts system D. Financial Reporting system

32. Which of the following statements about basic accounting principles in government is INCORRECT?
A. Government entities shall present their financial transactions in conformity of generally accepted accounting
principles in accordance with Philippine Public Sector Accounting Standards.
B. Government entities shall present their financial operations in conformity with the double entry bookkeeping.
C. National government agencies shall use the revised chart of accounts prescribed by the Department of Budget
and Management in the preparation of harmonized financial and budget accountability reports.
D. Fund cluster accounting means that a fund cluster is considered as an accounting entity.

33. Which of the following statements is FALSE?

A. In government accounting, a fund is an independent accounting entity.
B. The Unified Accounts Code System (UACS) is the coding system for national government transactions.
C. Transaction of government shall be accounted using the accrual basis of accounting in accordance with Philippine
Public Sector Accounting Standards.
D. The standards of PPSAS have equal authority regardless of the numbering used.

34. Allotment of P5 million pesos purposely for payment of salaries and other benefits of employees was issued to
Department AAA, a national government agency. In what registry book of Department AAA will this allotment
be recorded?
A. RAOD-MOOE C. RAOD-PS
B. RAOD-CO D. RBUD-PS

35. Which among the following registries shall be maintained by the Accounting Unit of a national government
agency?
I. Registry of Allotments, Obligations, and Disbursements
II. Registry of Budget, Utilization and Disbursements
III. Registry of Allotments and Notice of Cash Allocations

A. I only C. I, II, and III

B. I and II only D. III only

TEST II
Direction: Answer the following requirements using the information provided below:

Requirements:
1. Record the following transactions in the Registry of Allotment and Notice of Cash Allocation. (10 pts)
2. How much is the total allotment received by DEPED? (3 pts)

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 Republic of the Philippines
Cagayan State University
ANDREWS CAMPUS
Caritan, Tuguegarao City

COLLEGE of BUSINESS ENTREPRENEURSHIP and ACCOUNTANCY

3. How much is the unutilized NCA as of the end of first quarter? (2 pts)

Date Transaction .
Dec 28, 2017 Department of Education (DEPED) has a total appropriation of P20 million in the approved 2018 GAA.
90% of this appropriation is classified as “For Comprehensive Release” appropriation.

Jan. 3, 2018 DEPED received NCA #01 for the first semester requirement based on the MDP submitted: January-
P700,000; February-P2,200,000; March-700,000; April-2,700,000; May-950,000; and June-950,000.

Jan. 30, 2018 Obligated PS and MOOE expenditures amounting to P400,000 and P100,000, respectively, per ORS #01.

Jan 31, 2018 Paid the obligations incurred in Jan 30, 2018, net of P40,000 withholding tax per DV #01.

Feb. 7, 2018 Placed an order with Toyota Company for the purchase of a brand new motor vehicle amounting to
P1,000,000 which Toyota promised to deliver in the next month. ORS #02 was prepared for the purpose.

Feb 16, 2018 Obligated PS and MOOE expenditures amounting to P450,000 and P150,000, respectively, per ORS #03.

Mar 1, 2018 Received the motor vehicle from Toyota and paid 30% of the price as downpayment per DV #02.

Mar 4, 2018 Obligated the following per ORS #04: PS-P500,000; MOOE P200,000.

Mar 11, 2018 Paid the following obligations incurred per DV # 03:

Reference Obligation Tax Net Amount

ORS #03 600,000 40,000 560,000
ORS #04 700,000 40,000 660,000
Total 1,300,000 80,000 1,220,000

Apr 2, 2018 Obligated the following per ORS #05: PS-P750,000; MOOE P200,000; and CO-P1,750,000.

Apr 28, 2018 Paid the obligations incurred in April 2, 2018 net of P100,000 tax per DV #04.

May 5, 2018 Obligated PS of P700,000 and MOOE of P180,000 per ORS #06.

May 11, 2018 Received SARO #01 for PS classified under its “For Later Release” appropriation amounting to
P1,000,000 to cover the salaries and wages of the newly-hired teachers. NCA #02 amounting to P980,000
was also released corresponding to the cash requirement of the said SARO.

May 31, 2018 Paid the obligation in May 5, 2018 net of P40,000 tax per DV #05.

Jun. 2, 2018 Obligated PS and MOOE expenditures amounting to P720,000 and P180,000, respectively, per ORS #.

Jun 28, 2018 Paid the obligations incurred in Jun 2, 2018, net of P40,000 withholding tax, per DV #06.

Jun 29, 2018 Received SARO #02 containing the allotment for the following: MOOE-P300,000; and CO-P500,000.
The corresponding cash was received amounting to P760,000 per NCA #03.
---------------------------------------------------E N D---------------------------------------------------

Prepared by: MR. JOJIT A. CAMBRI

Subject Teacher

Approved by: PROF. ANTHONY CEASAR F. ZAMBALE, CPA

Department Chair, BSACC

Noted by: PROF. ANTONIA JOSEFA A. TAGUINOD, MBM

College Dean, CBEA

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 Republic of the Philippines
Cagayan State University
ANDREWS CAMPUS
Caritan, Tuguegarao City

COLLEGE of BUSINESS ENTREPRENEURSHIP and ACCOUNTANCY

Accounting for governmental, not-for-profit entities and specialized industries
ANSWER KEY

1. C 26. D
2. A 27. A
3. C 28. B
4. C 29. B
5. C 30. C
6. A 31. C
7. B 32. C
8. C 33. B
9. B 34. C
10. C 35. D
11. B
12. B
13. A
14. D
15. C
16. D
17. B
18. B
19. A
20. B
21. C
22. D
23. C
24. C
25. B

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