INDION, EDRIAN NICHOLE A.

BS in Accountancy II

Governmental and Not-for-Profit Accounting

Activity No. 1

Multiple Choice: Nahihirapan ka na bang pumili kung sino or alin sa kanila? Pero mas mahirap piliing
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ANSWER AND HIGHLIGHT IN FULL YOUR CHOICE INSTEAD OF DRAWING A STAR/CIRCLE AROUND THE
LETTER. YOU CAN SHOW YOUR ARTISTIC SKILLS IN YOUR PHOTO EDITS.

1. It is the system of prescribing the procedures for recording appropriations, allotments and
obligations.
a. Fund Accounting
b. Budgetary Accounting
c. Obligation Accounting
d. Government Accounting
2. Its main concern is the availability and use of funds for public services.
a. Commission on Audit
b. Department of Finance
c. Bureau of Treasury
d. National Budgetary System
3. It is a statement of estimated receipts and estimated expenses of the government, which serves
as basis for a General Appreciation Act.
a. Statement of financial position
b. Statement of operations
c. National government budget
d. Local government budget
4. Which department prepares the national budget, which serves as the basis of the General
Appropriation Act?
a. Executive Department
b. Legislative Department
c. Judiciary Department
d. National Government Agencies/ Units
5. It is the legislative consideration, review and approval of the national budget.
a. Preparation
b. Authorization
c. Execution
d. Accountability
6. It is the implementation of the national budget by different departments and release of
allotments.
a. Budget preparation
b. Budget authorization
c. Budget execution
d. Budget accountability
7. It denotes the responsibility to others that one or more persons have for their actions and
behavior.
a. Preparation
b. Accountability
c. Authorization
d. Execution
8. As specifically provided for in the New Constitution, no money shall be paid out of the National
Treasury EXCEPT in the pursuance of
a. Budget
b. President’s executive order
c. Fund
d. Appropriation
9. It is the legislative authorization to make payments out of government funds under specified
conditions and specific purposes.
a. Appropriation
b. Allotment
c. Obligation
d. Budgeting
10. It is the authorization from the Department of Budget and Management to an agency to incur
obligation up to specified amount that must be within the legislative appropriation
a. Obligation
b. Appropriation
c. Allotment
d. Fund release
11. It is the amount committed to be paid by the government arising from an act of a duly
authorized administrative officer and which binds the government to the immediate and
eventual payment of money.
a. Obligation
b. Appropriation
c. Allotment
d. Commitment
12. It is the functions and activities necessary for the performance of a major purpose for which a
government entity is established.
a. program
b. project
c. resources
d. internal control
13. The journal entry to be made in the books of government agencies/units upon receipt of Notice
of Cash Allocation is
a. Cash – MDS, Regular
Subsidy from National Government
b. Cash in bank – Local Currency, Current Account
Subsidy from National Government
c. Cash in bank – Local Currency, Savings Account
Subsidy from National Government
d. Cash in bank – Local Currency, Time Deposit
Subsidy from National Government
14. The budgetary accounts in government accounting is consist of the following:
a. Allotment, obligation, and liquidation
b. Appropriation, liquidation, and Notice of Cash Allocation
c. Appropriation, allotment, and obligation
d. Allotment, liquidation, and Notice of Cash Allocation
15. It is the formal document issued by the Department of Budget and Management to the head of
the agency containing the authorization, conditions and amount of allocation.
a. Special Allotment Release Order
b. Allotment and Obligation Slip
c. Notice of Cash Allocation
d. Registry Allotment and Obligation
16. In government accounting, which of the following is a Personal Service?
a. Telephone charge
b. Rent
c. Meal allowance for overtime work
d. Salaries and wages
17. In government accounting, which of the following is a capital outlay?
a. Salaries and wages
b. Repairs and maintenance
c. Land improvement
d. Merchandise inventory
18. It is the annual documents required at the onset of the budget execution phase, which contain
the agencies’ targets and plans for the current year.
a. Agency budget matrix (ABM)
 b. Annual Cash Program (ACP)
c. Budget Execution Documents (BEDs)
d. Budget Accountability Report (BARs)
19. It is a budget execution document that serves as an overall plan of the government agency
encompassing the targeted outputs and estimated obligations broken down by quarter.
a. Physical and Financial Plan (PFP)
b. Monthly Cash Program (MCP)
c. Estimate Monthly Income (
d. List not yet due and demandable obligations
20. It is a component of Budget Accountability Reports (BARs) that should be reported on monthly
basis.
a. Monthly Cash Program
b. List not yet due and demandable obligations
c. Estimate of monthly income
d. Statement of allotments, obligations and balances
21. It is a disbursement authority representing Modified Disbursement Checks issued and direct
payments to external creditors per validated advice to debit account in the list of due and
demandable accounts payable.
a. Tax remittance advice (TRA)
b. Notice of Cash Allocation (NCA)
c. Non-Cash Availment Authority (NCAA)
d. Cash Disbursement Ceiling (CDC)
22. According to NBC No.551 dated January 2,2014, government agencies are required to submit to
the Department of Budget and Management their plans, programs and targets for the year using
the Budget Execution Documents (BEDs) on or before
a. January 1
b. January 31
c. November 30
d. December 31
23. It is a budget where the proposed expenditures are equal or less than the estimated revenues.
a. Annual budget
b. Supplemental budget
c. Balanced budget
d. Line-item budget
24. It is a budgeting approach that uses performance information to assist in deciding where the
funds will go.
a. Performance informed budgeting
b. Zero-based budgeting
c. Performance-based budgeting
d. Line-item budgeting
25. It is a phase of budget cycle that starts upon the receipt of President’s budget by the House of
Speaker and ends with the President’s enactment of the General Appropriation Act.
a. Budget preparation
b. Budget legislation
c. Budget execution and operation
d. Budget accountability
26. A budget, the basis of which are objects of expenditure.
a. Annual budget
b. Special budget
c. Line-item budget
d. Supplemental budget
27. A budget of special nature and generally submitted in special forms on account that itemizations
are not adequately provided in Appropriations Act or that the amount are not at all included in
the Appropriations Act.
a. Annual budget
b. Special budget
c. Line-item budget
d. Supplemental budget
28. This document outlines the priority areas of government activity applicable to the budget year.
 a. Budget message
b. Budget proposal
c. Budget call
d. Budget calendar

29. In government accounting which of the following is Maintenance and Other Operating Expense
(MOOE).
a. Night Shift Differential
b. Janitorial Services
c. Honorarium
d. Salaries and wages
30. It Is the budget release document that shall serve as obligational authority that replaced the
Agency Budget Matrix.
a. General Appropriations Act Release Document (GAARD)
b. Allotment Release Program (ARP)
c. Budget Execution Documents (BED)
d. Budget Accountability Reports (BAR)
31. It is the expenditure authority derived from laws, appropriations, bills, government ordinances
and other decisions related to anticipated revenue or receipts for the budgetary period.
a. Annual budget
b. Approved budget
c. Appropriation
d. Allotment
32. This form shall be used by the requesting offices in the utilization of their approved budget
allocation per General Appropriations Act Release Document (GAARD) and other budgetary
laws/authority; and shall be maintained by fund cluster.
a. Budgetary Utilization Requests and Status
b. Request Obligation and Allotment
c. Obligation Requests and Status
d. Notice of Obligation Requests and Status Adjustments

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ng bayan gaya ng mga katanungang nakalahad dito:

1) What is the General Accounting Plan of government agencies/units?

Enumerate and explain the accounting systems in the NGAS national.

The General Accounting Plan (GAP) shows the overall accounting system of a government
agency/unit. It includes the following;
a. the source documents;
b. the flow of transactions and its accumulation in the books of accounts; and,
c. finally the conversion into financial information/data presented in the financial reports.

The following are the accounting systems:

1. Budgetary Accounts System

The budgetary accounts system encompasses the processes of preparing the budget
released document (formerly known as Agency Budget Matrix, but was replaced by
2014 General Appropriations Act starting 2014), monitoring and recording of
allotments received by the agency from the Department of Budget and
Management, releasing of Sub-Allotment Advices (SAAs) to Regional Offices (RO) by
 the Central Office (CO), issuance of SAAs/LAAs to Operating Units (OU) by the
Regional Office, and recording and monitoring of obligations.

2. Receipts/Income and Depository System

This system covers the processes of Acknowledging and reporting
income/collections, deposits of collections with Authorized Government Depository
Bank (AGDB) or through the AGDB for the account of Treasurer of the Philippines,
and recording of collections and deposits in the books of accounts of the agency. All
collecting officers shall deposit intact all their collections, as well as collections
turned over to them by sub-collectors/tellers, with their AGDB daily or not later
than the next banking day. They shall record all deposits made in the Cash Receipts
Record. At the end of each business day, the collecting officers shall accomplish the
Report of Collections and Deposits (RCD).

3. Disbursement System

Disbursements constitute all cash paid out during a given period either in currency
(cash) or by check. It may also mean the settlement of government
payables/obligations by cash or by check. It shall be covered by Disbursement
Voucher (DV)/Petty Cash Voucher (PCV) or Payroll. The Disbursement System
involves the preparation and processing of disbursement voucher, preparation and
issuance of check; payment by cash; granting, utilization, and
liquidation/replenishment of cash advances.

4. Financial Reporting System

Generally, there are eight steps in the accounting cycle: analyzing the transactions,
journalizing the transactions, posting the journal entries, preparation of trial
balance, adjusting the accounts, closing the accounts, preparation of the financial
statements, and reversing the accounts. Under the New Government Accounting
System, financial reporting includes the preparation and submission of trial
balances, financial statements and other reports needed by fiscal and regulatory
agencies. The sub-systems are as follows:
a. preparation and submission of trial balances and other reports; and
b. preparation and submission of financial statements.

2) Explain the national budget.

The National (Government) Budget is a plan for financing the government activities for a
fiscal year prepared and submitted by responsible executive to a representative body whose
approval and authorization are necessary before the plan can be executed. It is a definite
proposal of estimate or statement of receipts and expenditures that may be approved or
rejected. As such, it should present a detailed demonstration of the revenues and
expenditures of the government for the past and ensuing years, and should furnish not only
definite information regarding the general character, purpose and amount of government
expenditures, but also detailed data regarding the cost entailed in maintaining particular
units of organization and in performing particular units of organization and in performing
particular activities. In other words, it is the financial blueprint of a country’s development
plan.

To strengthen the link between planning and budgeting and to simplify the presentation of
the budget, the DBM introduced, in the preparation of the proposed National Budget for FY
2014, a new approach to budgeting. Through National Budget Memorandum (NBM) No.
117, the DBM introduced Performance-Informed Budgeting (PIB), which will ensure that
public resources are managed more efficiently and with the greatest degree of discipline by
re-directing funds to programs that would be responsive to the needs of the people
especially those in regions beset by poverty.
3) Discuss briefly the budget process/cycle.

1. Budget Preparation

This covers estimation of government revenues, the determination of budgetary

priorities and activities within the constraints imposed by available revenues and by
borrowing limits, and the translation of approved priorities and activities into
expenditure levels. Estimates are prepared by the various government agencies,
reviewed and finalized by the President of the Philippines, and then submitted to the
Legislative Department as basis for the preparation of the annual Appropriation Act.

The budget preparation begins with the issuance of a “budget call” by the Department
of Budget and Management. To ensure that the National Budget is enacted on time, the
DBM, under the Aquino Administration, has established a new tradition of beginning the
Budget Preparation phase earlier. Under the new Budget Preparation Calendar, the
Budget Call is issued in December, unlike in the past where it was issued in April; and
the submission of the President’s budget a day after the State of the Nation Address, in
contrast to earlier practice where it is submitted to Congress within 30 days from the
opening of every regular session.

2. Legislative Authorization

It is the second phase of the budget process relative to the enactment of the General
Appropriation Bills based on the budget of receipts and expenditures submitted by the
President of the Philippines. This phase starts upon the receipt of the President’s Budget
by the House Speaker and ends with the President’s enactment of the General
Appropriation Act.

The House of Representatives, in plenary, assigns the President’s Budget to the House
Appropriations Committee, which conduct hearing and scrutinize their respective
programs and projects. It then crafts the General Appropriation Bill (GAB). In plenary
session, the GAB is sponsored, presented and defended by the Appropriations
Committee and Sub-Committee Chairmen.

Normally, after receiving the GAB from the House of Representatives, the Senate
conducts its own committee hearings and plenary deliberations on the GAB. Once both
Houses of Congress have finished their deliberations, they will each constitute a panel to
the Bicameral Conference Committee. This committee will then discuss and harmonize
the conflicting provisions of the House and Senate Versions of the GAB.

The Harmonized or “Bicam” Version is then submitted to both Houses, which will then
vote to ratify the final GAB for submission to the President. Once submitted to the
President for his approval, the GAB is considered enrolled. The President and DBM then
review the GAB and prepare a Veto Message, where budget items subjected to direct
veto or conditional implementation are identified, and where general observations are
made. Under the Constitution, the GAB is the only legislative measure where the
President can impose a line-veto (in all other cases, a law is either approved or vetoed in
full).

Appropriations are approved by the legislative body in form of

a) A General Appropriation Law which covers most of the expenditures of
government;
b) Continuing Appropriations for various public works projects;
c) Supplemental Appropriations laws that are passed from time to time, to
augment or correct an already existing appropriation; and
d) Certain automatic appropriations intended for fixed and specific purposes.

3. Budget Execution and Operation

 The third phase of the budget process covers the various operational aspects of
budgeting. This phase of budget cycle begins with DBM’s issuance of guidelines on the
release and utilization of funds. Agencies are required to submit their Budget Execution
Documents (BEDs) at the start of budget execution. These documents outline agency
plans and performance targets. The DBM set a limit for allotments issued to an agency
and on the aggregate by preparing an Allotment Release Program (ARP). A Cash Release
Program (CRP) is also formulated alongside to set a guide for disbursement levels for the
year and for every month and quarter.

In implementing programs, activities and projects, agencies incur liabilities on behalf of

the government. Obligations are liabilities legally incurred, which the government will
pay for. To authorize an agency to pay the obligations it incurs, DBM issues a
disbursement authority. Most of the time, it takes the form of a Notice of Cash
Allocation ( NCA); and in special cases, the Non-Cash Availment Authority (NCAA) and
Cash Disbursement Ceiling (CDC).

4. Budget Accountability

The last phase of budget process consists of the following: (1) periodic reporting by the
government agencies of performances under their approved budget; (2) top
management review of government activities and the fiscal policy implementations
thereof; and (3) the actions of Commission on Audit in assuring the fidelity of officials
and employees by carrying out the intent of the National Assembly regarding the
handling of receipts and expenditures.

This phase happens alongside the Budget Execution phase. Through Budget
Accountability, the DBM monitors the efficiency of fund utilization, assesses agency
performance and provides a vital basis for reforms and new policies. Agencies are held
accountable not only for how these use public funds ethically, but also on how these
attain performance targets and outcomes using available resources. Submitted by
agencies on a monthly and quarterly basis, 1) Budget Accountability Reports (BARs) are
required reports that show how agencies used their funds and identify their
corresponding physical accomplishments. 2) An annual Budget Performance Assessment
Review (BPAR) is conducted to determine each agency’s accomplishments and
performance by the year-end. The DBM regularly reports results to the President.

Auditing is not within the DBM’s jurisdiction, and is instead lodged under the
Commission on Audit (COA). Nonetheless, auditing is critical in ensuring agency
accountability in the use of public funds. The DBM uses COA’s audit reports in
confirming agency performance, determining budgetary levels for agencies and
addressing issues in fund usage.

4) Enumerate and explain the obligational authorities prescribed by the Government

Accounting Manual (GAM).

The following are the documents which authorize the entity to incur obligations:

1. General Appropriation Act Release Document (GAARD)

This serves as the obligational authority for the comprehensive release of budgetary
items appropriated in the General Appropriation Act (GAA), categorized as For
Comprehensive Release (FCR).

This will abolish the lengthy process of releasing allotments to departments and
agencies; thereby, enhancing the operational efficiency of all agencies across the
bureaucracy, allowing the DBM to speed up government disbursements and fast-track
the implementation of programs and projects set for the year.
 2. Special Allotment Release Order (SARO)

This covers budgetary items under For Later Release (FLR) (negative list) in the entity
submitted Budget Execution Documents (BEDs), subject to compliance of required
documents/clearances. Releases of allotments for Special Purpose Funds (SPFs) (e.g.,
Calamity Fund, Contingent Fund, E-Government Fund, Feasibility Studies Fund,
International Commitments Fund, Miscellaneous Personnel Benefits Fund, and Pension
and Gratuity Fund) are also covered by SAROs.

3. General Allotment Release Order (GARO)

This is a comprehensive authority issued to all national government agencies, in general,

to incur obligations not exceeding an authorized amount during a specified period for
the purpose indicated therein. It covers automatically appropriated expenditures
common to most, if not all, agencies without need of special clearance or approval from
competent authority.

5) Enumerate and explain the disbursement authorities prescribed by the Government

Accounting Manual (GAM).

The following documents authorize the entity to pay obligations and payables:

1. Notice of Cash Allocation (NCA)

This is the authority issued by the DBM to central, regional, and provincial offices and
operating units to pay operating expenses, purchases of supplies and materials,
acquisition of PPE, accounts payable, and other authorized disbursements through the
issue of Modified Disbursements System (MDS) checks, Authority to Debit Account
(ADA) or other modes of disbursements.

2. Non-Cash Availment Authority (NCAA)

This is the authority issued by the DBM to agencies to cover the liquidation of their
actual obligations incurred against available allotments for availment of proceeds
from loans/grants through supplier’s credit/constructive cash.

3. Cash Disbursements Ceiling (CDC)

This is the authority issued by the DBM to the Department of Foreign Affairs (DFA) and
Department of Labor and Employment (DOLE) to utilize their income collected/retained
by their Foreign Service Posts (FSPs) to cover their operating requirements, but not to
exceed the released allotment to the said post.

4. Notice of Transfer of Allocation (NTA)

This is the authority issued by the Central Office to its regional and operating units to
pay their operating expenses, purchases of supplies and materials, acquisition of PPE,
accounts payable, and other authorized disbursements through the issue of MDS
checks, ADA or other modes of disbursements.

Deadline of Submission: April 25, 2020

Where to submit: joyeulaliaugale@gmail.com
P.S.: Do not forget to state your name and section in the file. And no cheating/ sharing of
answer sheet files.