GOVERNMENT ACCOUNTING

Problem 1. The agency received an allotment for DBM of P10,000,000 which is accompanied by with a notice of cash allocation
of 90% of the allotment. During the year, the agency incurred an obligation of 90% of the NCA but only 40% of these obligation
were paid by the agency. The enty to record the unused NCA is:

A. SING 4,860,000
Cash – NT, MDS 4,860,000
B. SING 5,760,000
Cash – NT, MDS 5,760,000
C. Cash – NT, MDS 4,860,000
SING 4,860,000
D. Cash – NT, MDS 5,760,000
SING 5,760,000

Problem 2. Performance bonds are required by the agency from contractors/suppliers to ensure their performance of
contracts, which may be in the form of cash or certified check or surety. What is the journal entry to record receipt of
performance bonds in form of surety?

A. Cash – Collecting Officer

Performance bonds payable
B. Cash – Collecting Officer
Guarantee deposits payable
C. Guarantee deposits
Performance bonds payable
D. Performance bonds payable
Guarantee deposits

Problem 3. On May 5, 2015 Agency DOF transfers cash of P20,000,000 to DPWH for a land beautification project. The project
was completed by DPWH on October 3, 2015. What is the entry of Agency DOF to record the completion of the beautification
project?

A. Land development 20,000,000

Cash – NT, MDS 20,000,000
B. Land development 20,000,000
Due from NG – DPWH 20,000,000
C. Land development 20,000,000
Cash in bank – check disbursements 20,000,000
D. No entry

Problem 4. LTO collected motor vehicles registration fees amounting to P250. These were remitte ti the Bureau of Treasury. To
record the remittance by LTO in the National Governement books, the entry would be:

A. Cash – NT, MDS 250

Registration fees 250
B. Registration fees 250
Cash – NT, MDS 250
C. Registration fees 250
 Cash – Collecting Officer 250
D. Cash – Disbursing Officer 250
Cash – Collecting Officer 250

Problem 5. Agency Z have an obligation for equipment per purchase order amounting to P800,000. Subsequently, the agency
liquidates the equipment acquired in full. The entry to record this transaction would be (ignore tax implication)

A. Memorandum entry in RAOCO

B. Accounts Payable 800,000
Cash – NT, MDS 800,000
C. SING 800,000
Cash – NT, MDS 800,000
D. Obligation Liquidated 800,000
Cash – NT, MDS 800,000

Problem 6. The entry for obligations of stamps P5,000 for replenishment of petty cash fund is:

A. Stamps
Cash – NT, MDS
B. Stamps expense
Cash – NT, MDS
C. Memo entry – RAOMO
D. Petty Cash fund
Cash – NT, MDS

Problem 7. Agency LOL issued a bill for rent of office space to VIP Holdings, P400,000. The agency is authorized per special
provision to use receipts from rentals for their operations. The entry on the Agency bools to record the foregoing transactions
would be:

A. Memo entry
B. Accounts Receivable 400,000
SING 400,000
C. Accounts Receivable 400,000
Rent Income 400,000
D. Cash – Collecting Officer 400,000
Rent Income 400,000

Problem 8. The straight-line method of depreciation shall be used for government property, plant and equipment and a 10%
residual value shall be set up. What is the estimated useful life of government buildings that are predominantly wood, mixed
wood and concrete, predominantly concrete?

A. 15 years, 20 years and 25 years, respectively

B. 5 years, 15 years and 30 years, respectively
C. 10 years, 25 years and 40 years, respectively
D. 10 years, 20 years and 30 years, respectively
Problem 9. The notice of cash allocation from Bureau of Treasury shall be recorded by the government agencies in which of
the following books?

A. Regular Agency Books

B. Registry of Notice of Cash Allocation and Replenishments
C. National Government Books
D. Registry of Allotment and Notice of Cash Allocation

Problem 10. Which of the following statements is incorrect?

A. The tax remittance advice is recorded by the agency by crediting SING

B. The gross payroll is advanced to a disbursing officer and is recorded by crediting Cash – NT, MDS
C. Upon payment of the office equipment on account, Due to BIR account shall be credited for the withholding tax
D. The unused NCA is to be reverted to the Bureau of Treasury by crediting the Cash – NT, MDS account

Problem 11. Which of the following is incorrect?

A. In the construction of building by contract, Advances to Contractor account may be debited when billings are received
B. In the construction of building by contract, Construction in Progress account is credited to recognize the Building
account
C. Issued purchase orded for the office equipment requires only a memo entry in RAOCO
D. The agency enters the obligation for bank charges in RAOFE, Cash in Bank – LCCA account is credited in the regular
agency books

Problem 12. Out of its total appropriation for 2014, Department of Kurap received its allotment broken down as follows:

Capital Outlay (CO) 20,000,000

Maintenance and Other Operating Expense 10,000,000
Personal Services (PS) 5,000,000
Financial Expenses 1,000,000
Total 36,000,000

The Department of Budget and Management (DBM) issued Notice of Cash Allocation to Department of Kurap in the amount of
P20,000,000. Department of Kurap records the allotment by a:

A. Memo entry in the Registry of Allotments and Obligations

B. Memo entry in the general journal
C. Memo entry in the tegistry of Appropriations and Allotment
D. National Clearing Account 36,000,000
Appropration allotted 36,000,000

Problem 13. On December 31, 2014, selected ledger accounts of LGU – Sampernandu shows the following:

Total NCA received for the year 5,000,000

Total MDS checks issued 4,975,000
Prepaid rent (10/1/2014 to 9/30/2015) 12,000
Public infrastructures (completed) 2,500,000
A. The adjusting entries at the end of the year will include

A. Debit, SING, P28,000

B. Credit, Government equity, P34,000
C. Debit, Rent expense, P3,000
D. Credit, Construction in Progress – agency assets, P2,500,000

B. The closing entry to revert the unused NCA at the end of the year will include

A. Debit, Cash – NT, MDs, P5,000,000

B. Credit, Government equity, P4,975,000
C. Debit, SING, P25,000
D. Credit, Construction in Progress – agency assets, P2,500,000

Problem 14. The DWPH received capital outlay and Notice of Cash Allocation, net of tax remittance advice, from the DBM in
the amount of P10,000,000 and P8,000,000, respectively. Upon approval of the project proposal for the improvement of the
administration building, purchase order for materials was issued in the amount of P4,000,000. At the date of delivery,
construction materials were inspected and paid in full. Materials of P3,500,000 were issued and used in the construction.
Payroll for labor cost in the amount of P1,500,000 less 10% withholding tax was submitted to the administration, and cash
advance was granted to special disbursing office for the eventual payment of payroll. Withholding tax payable was remitted to
the Bureau of Internal Revenue and upon approval of the accomplishment report by the head of the DPWH, the capital
expenditures were taken in the books of DPWH.

Which of the following journal entries in the Registry Agency Books of DPWH is correct?

A. To record the receipt of the allotment for capital outlay

Allotment receivable from DBM 10,000,000
Subsidy income from national government 10,000,000
B. To record obligation of materials purchased
Construction in materials inventory 4,000,000
Accounts payable 4,000,000
C. To record the recipt of notice of cash allocation, net of tax remittance advice
Cash – NT, MDS 8,000,000
Subsidy income from national government 8,000,000
D. To record payment of construction materials, net of 10% withholding tax
Accounts payable 4,000,000
Due to BIR 400,000
Cash – Collecting Officer 3,600,000

Problem 15. The Department of Budget and Management of the Philippine Government conducted a seminar about the New
Governement Accounting System. The DBM collected a total amount of P20,000 as seminar fees, which was deposited with
Landbank of the Philippines and paid the following expenses of the seminar: Office supplies – P5,000; Rent – P3,000 and
Printing and Binding – P1,000. The excess of the amount collected was appropriately remitted to the National Treasury.

Which of the following journal entries in the Regular Agency Book of DBM is incorrect?

A. To record collection of seminar fees

Cash – Collecting Officer 20,000
 Seminar fees 20,000
B. To record deposit of collections
Cash in Bank – LBP 20,000
Cash – Collecting Officer 20,000
C. To record payment of expenses
Office supplies expense 5,000
Rent expense 3,000
Printing and publication expense 1,000
Cash – Collecting Officer 9,000
D. To record closing of accounts in Regular Agency Books to National Government Book
Seminar fees 20,000
Office supplies expense 5,000
Rent expense 3,000
Printing and publication expense 1,000
Cash in Bank – LBP 11,000

Problem 16. Based on the memorandum agreement for a reforestation project, DPWH (source agency) made an inter-agency
transfer of fund to DENR (implementing agency). DPWH issued check in the amount of P5,000,000 which was previously
obligated by DPWH for that purpose. Upon receipt of the check by DENR, it was remitted to the Bureau of Treasury. The
corresponding Notice of Cash Allocation (NCA) was requested and received by DENR from the DBM. Accordingly, expenses
were paid by DENR and appropriate report for this project was submitted to DPWH.

Which of the following journal entries in the Regular Agency Book of DENR is incorrect?

A. To record cash transfer from DPWH to DENR

Cash – Collecting Officer 5,000,000
Due to Bureau of Treasury 5,000,000
B. To record remittances to the Bureau of Treasury
Due from Bureau of Treasury 5,000,000
Cash – Collecting Officer 5,000,000
C. To record receipt of Notice of Cash Allocation
Cash – NT, MDS 5,000,000
Due from Bureau of Treasury 5,000,000
D. To record expenditure on reforestation
Land Improvement, Reforestation 5,000,000
Cash – NT, MDS 5,000,000
E. To record submission of report to DPWH
Due to DPWH 5,000,000
Land Improvement, Reforestation 5,000,000

Problem 17. DSWD received a grant or donation from SM Inc. in the amount of P100,000. DSWD has no specific authority for
the use of the grant. DSWD remitted the P100,000 cash to the Bureau of Treasury through the bank. Afterwards, the DSWD
preapared and submitted special budget for Street Children Christmas Party to DBM. Upon approval of the special budget for
DSWD, the DBM released the Special Allowance Release Order (SARO) in the amount of P100,000. Afterwards, the DBM
released the Notice of Cash Allocation to the DSWD.

Which of the following journal entries in the national government book or regular agency book of DSWD is incorrect?
A. To record the receipt of grant from SM in the National Government Book of DSWD
Cash – Collecting Officer 100,000
Income from Donation 100,000
B. To record the remittance to the Bureau of Treasury through the bank in the National Government Book of DSWD
Income from Donation 100,000
Cash – Collecting Officer 100,000
C. To record the receipt of SARO from DBM in the Regular Agency Book of DSWD
Receivable from DBM 100,000
Subsidy Income from National Government 100,000
D. To record the receipt of Notice of Cash Allocation from DBM in the Regular Agency Book of DSWD
Cash – NT, MDS 100,000
Subsidy Income from National Government 100,000