CPA REVIEW SCHOOL OF THE PHILIPPINES

Manila

ADVANCED FINANCIAL ACCOUNTING AND REPORTING

GOVERNMENT ACCOUNTING MANUAL (GAM) GUERRERO/GERMAN/DE JESUS/LIM/FERRER/LACO/VALIX

1. What is the title of the revised government accounting system for national government agencies
which will be effective starting January 1, 2016?
a. Government Accounting Manual (GAM)
b. New Government Accounting System (NGAS)
c. Philippine Government Accounting System (PGAS)
d. National Government Accounting Manual (NGAM)

2. Under Article IX-D Section 2 of the 1987 Constitution of the Republic of the Philippines, it
shall have the exclusive authority, subject to the limitations 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, extravagant, or unconscionable
expenditures, or uses of government funds and properties. It shall also be responsible to keep the
general accounts of the Government and, for such period as may be provided by law, preserve
the vouchers and other supporting papers pertaining thereto.
a. Commission on Audit
b. Civil Service Commission
c. Commission on Election
d. Commission on Human Rights

3. The Government Accounting Manual aims to update the following, except

a. standards, policies, guidelines and procedures in accounting for government funds and
property
b. coding structure and accounts
c. accounting books, registries, records, forms, reports and financial statements.
d. scope and objectives of audit.

4. It encompasses the processes 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 reporting
c. Government accounting
d. Government analyzing

5. It refers to the the financial plan of a government for a given period, usually for a fiscal year,
which shows what its resources are, and how they will be generated and used over the fiscal
period.
a. Government budget
b. Government financial position
c. Government financial statements
d. Government financial performance

6. It refers to the first step in the government budgetary process wherein the President, through the
assistance of the Department of Budget and Management, shall prepare and submit to the
Congress within 30 days from the opening of regular session of Congress a budget of
expenditures and sources of financing, including receipts from existing and proposed revenue
measures.
a. Budget Preparation
b. Budget Legislation or Authorization
c. Budget Execution
d. Budget Accountability
8720
 Page 2

7. It refers to the second step in the government budgetary process which involves the enactment
by the Congress of the General Appropriation Act (GAA) based on the budget submitted by the
President which cannot be increased by the Congress. The initiative for the enactment of the
appropriation law shall come from the House of Representatives.
a. Budget Preparation
b. Budget Legislation or Authorization
c. Budget Execution
d. Budget Accountability

8. It refers to the third step in the government budgetary process which involves that
implementation of the general appropriation act which includes the release of revenue allotment
under the supervision of Department of Budget and Management.
a. Budget Preparation
b. Budget Legislation or Authorization
c. Budget Execution
d. Budget Accountability

9. It refers to the final step in the government budgetary process which involves the submission of
proper documentary reports by responsible officer, liquidation of expenditures and audit
conducted by Commission on Audit to ensure the public funds are spent in accordance with the
appropriation act.
a. Budget Preparation
b. Budget Legislation or Authorization
c. Budget Execution
d. Budget Accountability

10. Under the Government Accounting Manual (GAM), the financial reporting system of the
Philippine government consists of accounting system on accrual basis and budget reporting
system on budget basis under the statutory responsibility of the National Government Agencies
(NGAs), Bureau of the Treasury (BTr), Department of Budget and Management (DBM), and
the Commission on Audit (COA). Which of the following is incorrect under the Government
Accounting Manual?
a. Each entity of the National Government (NG) maintains complete set of accounting books
by fund cluster which is reconciled with the records of cash transactions maintained by the
BTr.
b. The BTr accounts for the cash, public debt and related transactions of the NG.
c. Each entity maintains budget registries which are reconciled with the budget records
maintained by the DBM and the Government Accountancy Sector (GAS), COA.
d. Each entity shall maintain Regular Agency (RA) Books and National Government
(NG) Books for the recording of its transactions.

11. The General Accounting Manual enumerates the following components of the General Purpose
Financial Statements of National Government Agencies, except
a. Statement of Financial Position
b. Statement of Financial Performance
c. Statement of Retained Earnings
d. Statement of Cash Flows
e. Statement of Changes in Net Assets/Equity
f. Statement of Comparison of Budget and Actual Amounts
g. Notes to the Financial Statements, comprising a summary of significant accounting policies
and other explanatory notes.
 8720
Page 3

12. The books of accounts of National Government Agencies under the GAM shall consist of the
following, except
a. General Journal
b. Cash Receipts Journal
c. Cash Disbursement Journal
d. Regular Agency and National Government Books
e. Check Disbursements Journal
f. General Ledgers
g. Subsidiary Ledgers

13. The registries of National Government Agencies under the GAM shall consist of the following,
except
a. Registries of Revenue and Other Receipts. (RROR)
b. Registry of Appropriations and Allotments. (RAPAL)
c. Registries of Allotments, Obligations and Disbursements (RAOD)
d. Registries of Budget, Utilization and Disbursements (RBUD)
e. Registries of Priority Development Assistant Program (RPDAP)

14. It refers to the registry maintained by NGA unit to monitor the revenue and other receipts
estimated/budgeted, collected and remitted/deposited.
a. Registries of Revenue and Other Receipts. (RROR)
b. Registry of Appropriations and Allotments. (RAPAL)
c. Registries of Allotments, Obligations and Disbursements (RAOD)
d. Registries of Budget, Utilization and Disbursements (RBUD)

15. It refers to registry maintained by NGA unit to show the original, supplemental and final budget
for the year and all allotments received charged against the corresponding appropriation.
a. Registries of Revenue and Other Receipts. (RROR)
b. Registry of Appropriations and Allotments. (RAPAL)
c. Registries of Allotments, Obligations and Disbursements (RAOD)
d. Registries of Budget, Utilization and Disbursements (RBUD)

16. It refers to registry maintained by NGA unit to show the allotments received for the year,
obligations incurred against the corresponding allotment and the actual disbursements made.
a. Registries of Revenue and Other Receipts. (RROR)
b. Registry of Appropriations and Allotments. (RAPAL)
c. Registries of Allotments, Obligations and Disbursements (RAOD)
d. Registries of Budget, Utilization and Disbursements (RBUD)

17. It refers to registry maintained by NGA unit to record the approved special budget and the
corresponding utilizations and disbursements charged to retained income authorized under the
law and other retained income collection of a national government agency with similar
authority.
a. Registries of Revenue and Other Receipts. (RROR)
b. Registry of Appropriations and Allotments. (RAPAL)
c. Registries of Allotments, Obligations and Disbursements (RAOD)
d. Registries of Budget, Utilization and Disbursements (RBUD)

18. The following are the classifications of different RAPAL, RAOD and RBUD, except
a. RAPAL/RAOD/RBUD – Personal Services
b. RAPAL/RAOD/RBUD – Maintenance and Other Operating Expenses
c. RAPAL/RAOD/RBUD – Financial Expenses
d. RAPAL/RAOD/RBUD – Capital Outlays
 e. RAPAL/RAOD/RBUD – Noncash Expenses
8720
Page 4

19. Which of the following statements concerning the period of validity of Notice of Cash
Allocations (NCAs) is incorrect?
a. NCA issued and credited to the Regular MDS Sub-Accounts of agencies/OUs for their
regular operations, shall be valid until the last working day of the 3rd month of that quarter
pursuant to DBM Circular Letter (CL) No. 2013-12.
b. NCA issued and credited to the Special MDS Accounts of agencies specifically for payment
of RGITL benefits shall be valid until the last working day of the following month when the
NCA was issued, except when issued in December, pursuant to DBM Budget Circular No.
2013-1
c. NCA issued for trust receipts and credited to the Trust MDS Account of agencies shall be
valid until the last working day of the year.
d. NCA issued to the BTr for working funds of agencies shall be valid until the last working
day of the year.
e. NCA, regardless of source, shall be valid only for a period of 1-month from the date of
receipt.

20. On December 31, 2018, the Department of Finance billed its lessee on one of its buildings in the
amount of P10,000. On January 31, 2019, the Department of Finance collected all of the
accounts receivable. On February 28, 2019, the Department of Finance remitted the entire
collected amount to the Bureau of Treasury. What is the journal entry to record the remittance
by the Department of Finance to the Bureau of Treasury?
a. Debit – Accounts Receivable P10,000 and Credit – Rent Income P10,000
b. Debit – Accounts Receivable P10,000 and Credit – Retained Earnings P10,000
c. Debit – Cash Collecting Officers P10,000 and Credit – Accounts Receivable P10,000
d. Debit – Cash – Treasury/Agency Deposit, Regular – P10,000 and
Credit Cash – Collecting Officer – P10,000

21. On January 1, 2018, the Department of Public Works and Highways (DPWH) received a
P10,000,000 appropriation from the national government for the acquisition of machinery. On
February 1, 2018, DPWH received the allotment from the Department of Budget and
Management. On March 1, 2018, DPWH entered into a contract with CAT Inc. for the
acquisition of the machinery with a price of P8,000,000. On April 1, 2018, DPWH received the
Notice of Cash Allocation from Department of Budget and Management net of 1% withholding
tax for income tax of supplier and 5% withholding of Final Tax on VAT of supplier. On May 1,
2018, CAT Inc. delivered the machinery to DPWH. On June 1, 2018, DPWH paid the obligation
to CAT Inc. On July 1, 2018, DPWH remitted the withheld income tax and final VAT to BIR.

What is the journal entry on March 1, 2018?

a. No entry but just posting to appropriate RAPAL
b. No entry but just posting to appropriate RAPAL and to RAOD
c. No entry but just posting of ORS (Obligation Request and Status) to appropriate
RAOD
d. Debit Machinery P8,000,000 and credit Accounts Payable P8,000,000

22. Using the same data on number 21, what is the journal entry on April 1, 2018?
a. Debit Cash-MDS, Regular P7,520,000 and Credit Subsidy Income from National
Government P7,520,000.
b. Debit Machinery P8,000,000 and Credit Accounts Payable P8,000,000
c. Debit Accounts Payable P8,000,000 and Credit Due to BIR P480,000 and Cash-MDS,
Regular P7,520,000.
d. Debit Due to BIR P480,000 and Credit Subsidy Income from National Government
P480,000.
 8720
Page 5

23. The salary accountant of DENR provided the following data concerning the salaries of its
officers and Employees for the month ended December 31, 2016:
Salaries and wages P510,000
Personal Economic Relief Allowance (PERA) 55,000
Gross compensation 565,000
Withholding income tax 51,000
GSIS 15,300
PAG-IBIG 10,200
Philhealth 510
Net P487,990
DENR received the notice of cash allocation from the DBM net of 10% tax on basic salary.
Afterwards, DENR granted cash advance to the cashier for the payroll. Afterwards, the DENR
cashier paid the employees and submitted the liquidation report of the payroll fund with the
corresponding supporting documents. Afterwards, DENR remitted the withheld tax to BIR and
the withheld contribution to GSIS, PAG-IBIG and Philhealth
What is the journal entry to recognize grant of cash advance to the cashier for the payroll?
a. Cash – MDS, Regular 508,500
Subsidy Income from National Government 508,500
b. Salaries and Wages Regular 510,000
PERA 55,000
Due to BIR 51,000
Due to GSIS 15,300
Due to PAG-IBIG 10,200
Due to Philhealth 510
Due to officers and employees 487,990
c. Advances for payroll 487,990
Cash-MDS, Regular 487,990
d. Due to officers and employees 487,990
Advances for payroll 487,990
e. Due to BIR 51,000
Subsidy Income from National Government ` 51,000
f. Due to GSIS 15,300
Due to PAG-IBIG 10,200
Due to Philhealth 510
Cash – MDS, Regular 26,010

24. Department of Health (DOH) received Notice of Cash Allocation in the amount of P100,000
from Department of Budget and Management. DOH made a total cash disbursements in the
amount of P95,000. What is the journal entry to recognize reversion of unused Notice of Cash
Allocation by DOH in its books?
a. Debit Subsidy Income from National Government P5,000 and credit Cash-MDS,
Regular P5,000.
b. Debit Retained Earnings of DFA P5,000 and credit Cash-MDS, Regular P5,000.
c. Debit Expenses of DFA P5,000 and credit Cash-MDS, Regular P5,000.
d. Debit Investment of DFA P5,000 and credit Cash-MDS, Regular P5,000.
 8720

Page 6

25. Which of the following closing entries in the accounting book of Department of Tourism is
incorrect if the following data are provided by its chief accountant?

Total Income, aside from SING P1,598,000

Total expenses 791,652
Total Subsidy Income from National Government 1,181,882
a. Income account other than SING 1,598,000
Revenue and Expense Summary account 1,598,000
b. Revenue and Expense Summary account 791,652
Expense account 791,652
c. Subsidy Income from National Government 1,181,882
Revenue and Expense Summary Account 1,181,882
d. Revenue and Expense Summary Account 1,988,230
Accumulated Surplus/(Deficit) 1,988,230
e. Ordinary shares 3,931,534
Share premium 3,931,534

26. On January 31, 2016, the collecting officer of Bureau of Customs collected P350,000 import
duties plus fines of P10,000 on the goods of an importer. On February 28, 2016, the Bureau of
Customs remitted the P350,000 to the Bureau of Treasury. What is the journal entry to record
the collection of the import duties and fines?
a. Debit Cash-Collecting Officer P360,000 and Credit Import Duties P350,000 and
Fines/Penalties P10,000.
b. Debit Cash-Treasury/Agency Deposit, Regular P360,000 and Credit Cash-Collecting Officer
P360,000.
c. Debit Cash-Treasury/Agency Deposit, Regular P360,000 and Credit Import Duties P350,000
and Fines/Penalties P10,000.

27. Using the same data in number 26, but assuming the importer directly deposited the 350,000
import duties and P10,000 fines through Authorized Agent Banks instead of collection by a
customer collecting officer, what is the journal entry to record the collection/remittance of
import duties to Bureau of Treasury?
a. Debit Cash-Collecting Officer P360,000 and Credit Import Duties P350,000 and
Fines/Penalties P10,000.
b. Debit Cash-Treasury/Agency Deposit, Regular P360,000 and Credit Cash-Collecting
Officer P360,000.
c. Debit Cash-Treasury/Agency Deposit, Regular P360,000 and Credit Import Duties P350,000
and Fines/Penalties P10,000.

28. The Bureau of Treasury received P20,000 cash remittance from Department of Agrarian Reform
(DAR) from its miscellaneous income. What is the journal entry of the Bureau of Treasury in its
accounting books to record the receipt of cash remittance from the income of a national
government agency?
a. Debit Cash in Bank, Local Bank P20,000 and Credit Cash-Treasury/Agency Deposit,
Regular P20,000.
b. Debit Cash in Bank, Local Bank P20,000 and Credit Miscellaneous Income of DA P20,000.
c. Debit Cash in Bank, Local Bank P20,000 and Credit Savings of DA, Regular P20,000.
d. Debit Cash in Bank, Local Bank P20,000 and Credit Cash-Collecting Officer, DA P20,000.
 8720
Page 7

29. The Department of National Defense obtained a loan from Asian Development Bank to finance
the acquisition of Philippine’s first aircraft carrier. The principal of the loan is $1B. What is the
journal entry in the accounting book of Bureau of Treasury to record the receipt of loan
proceeds based on credit advice from BSP?
a. Debit Cash in Bank, Local Bank or BSP $1B and Credit Cash-Treasury/Agency Deposit,
Regular $1B.
b. Debit Cash in Bank, Foreign Currency BSP $1B and Credit Loans Payable-Foreign
$1B.
c. Debit Cash in Bank, Foreign Currency BSP $1B and Credit Subsidy Income From Asian
Development Bank $1B.
d. Debit Cash in Bank, Foreign Currency BSP $1B and Credit Capital Account, ADB $1B.

30. On February 1, 2016, the Department of Health received P10M cash from PLDT for medical
expenses of victims of calamities. The collection of the P10M donation is considered as
authorized special account. DOH remitted the donation to the Bureau of Treasury on March 1,
2016. What is the journal entry on March 1, 2016 in the accounting book of DOH?
a. Debit Cash-Collecting Officer P10M and Credit Medical Fees P10M.
b. Debit Cash-Treasury/Agency Deposit Special Account P10M and Credit Cash-
Collecting Officers P10M.
c. Debit Cash in Bank-Local Currency, Savings Account P10M and Credit-Treasury/Agency
Deposit, Special Account P10M
d. Debit Cash-Treasury/Agency Deposit P10M and Credit Medical Fees P10M.

31. On September 1, 2016 $10M donation is deposited directly by United Nations World Health
Organization to the Bureau of Treasury to help Philippine government battle Zika Virus. What
is the journal entry in the accounting book of Bureau of Treasury to record the receipt of grants
or donation from UN-WHO?
a. Debit Cash in Bank, Foreign Currency Savings Deposit $10M and Credit Income from
Grants and Donations $10M.
b. Debit Cash Collecting Officer $10M and Credit Income from Grants and Donations $10M.
c. Debit Cash in Bank, Foreign Currency Savings Deposit $10M and Credit Loans Payable
$10M.
d. Debit Cash Collecting Officer $10M and Credit Ordinary Share, UN WHO $10M.

32. On February 1, 2016, the Department of Environment and Natural Resources (DENR)
transferred P450,000 fund to Department of Public Works and Highway (DPWH) for the
construction of DENR’s irrigation project. The P450,000 fund was then remitted by DPWH to
Bureau of Treasury on May 1, 2016. The project was completed and turned over by DPWH to
DENR on October 31, 2016. What is the journal entry in DENR’s book to record the transfer of
funds on February 1, 2016?
a. Debit Due from DPWH P450,000 and Credit Cash, MDS, Regular P450,000.
b. Debit Cash-Treasury/Agency Deposit/Trust P450,000 and Credit Cash-Collecting Officers
P450,000.
c. Debit Cash Collecting Officers P450,000 and Credit Due to DENR P450,000
d. Debit Cash-Treasury/Agency Deposit/Trust P450,000 and Credit Cash-Collecting Officers
P450,000.

33. Using the same data in number 32, what is the journal entry of DPWH to record the turnover of
the irrigation project to DENR on October 31, 2016?
a. Debit Due to DENR P450,000 and Credit PPE Account P450,000
b. Debit PPE Account P450,000 and Credit Due from DPWH P450,000.
c. Debit Due to DENR P450,000 and Credit Cash-Collecting Officer P450,000
d. Debit Cash Collecting Officer P450,000 and Credit Due from DPWH P450,000.

END
8720