ACCOUNTING FOR DISBURSEMENTS AND RELATED TRANSACTIONS

1. Statement 1: Government entities are allowed by law to make purchases using credit card.
Statement 2: The Department of National Defense is one government entity allowed to use credit card for
payments
Both statements are true.
2. Entity A purchases office supplies from an authorized merchant using an electronic card. The journal entry to
record this transaction includes a
Credit to Accounts Payable
3. Statement 1: According to the GAM for NGAs, the Advice to Debit Account (ADA) mode of disbursement can
be used only if the payee maintains an account in the same bank where the government entity maintains an
account
Statement 2: Land Bank of the Philippines is the sole government servicing bank where Advice to Debit Account
(ADA) mode of disbursement can be done
Both statements are false
4. According to the GAM for NGAs, cash disbursements are made through
Cash advances to authorized personnel
5. When a government agency pays an account and withholds tax, the journal entry includes a credit to
Due to BIR
6. Statement 1: Due to strict internal control measures, a government entity can only disburse funds via cash or
check
Statement 2: Checks can be MDS or commercial checks
Only statement 2 is true
7. Statement 1: No additional cash advance shall be given to any official or employee unless the previous cash
advance given to him/her is first liquidated.
Statement 2: Liquidation of cash advance for foreign travel should be done 30 days upon return to workstation.
Only statement 1 is true
8. All of the following are considered valid cashless disbursements except:
Payment to a supplier through GCash
9. Statement 1: The Non-Cash Availment Authority (NCAA) is a disbursement authority issued to a government
agency with foreign service posts.
Statement 2: The Department of Foreign Affairs has this kind of disbursement authority.
Both statements are false
10. Statement 1: Disbursements through the Cash Disbursement Ceiling (CDC) results in the recognition of a loan
payable in the books of accounts of the BTr.
Statement 2: Since liability is recognized, the Cash Disbursement Ceiling (CDC) involves cash inflow to the BTr.
Both statements are false.
11. Statement 1: Entity A may acquire equipment from a supplier, on account and a lender settles the account of A by
directly paying the supplier the proceeds of a loan payable that is recorded in the BTr’s books
Statement 2: this transaction is called Cash Disbursement Ceiling (CDC).
Only statement 1 is true.
12. A certification on the availability of allotment is required before a disbursement of government funds is made.
According to the GAM for NGAs, who shall issue the certification?
Budget officer
13. Which of the following results in the recognition of payroll?
Liquidation of cash advance for travel
14. Which of the following shall certify the availability of funds and completeness of supporting documents before
the Head of Agency or his/her authorized representative can enter into a contract that obligate the government for
the eventual payment of government funds?
 Chief accountant
15. Which of the following is not used in processing disbursements?
ORs
16. Statement 1: All disbursements shall be made through Disbursement Vouchers (DV) or payroll.
Statement 2: The head of the requisitioning unit shall approve any disbursements.
Only statement 1 is true
17. According to the GAM for NGAs, accounting for Petty Cash shall be done using
Imprest system
18. Statement 1: Under the Automatic Debit Arrangement (ADA) mode of disbursement, payments from a
government entity are directly debited to the accounts of the payees through fund bank transfers.
Statement 2: Automatic Debit Arrangement (ADA) works like a check, hence, once notified, the payee can go to
the bank to withdraw the cash by presenting the notification.
Both statements are false
19. Which of the following is not one of the modes of disbursements by a government entity?
Payment thru Gcash
20. Which of the following is not a signatory in the LDDAP-ADA?
Payee
21. The Chief Accountant shall charge obligations incurred against available allotment to ensure that
No overdraft is incurred
22. The Petty Cash shall be replenished when
Disbursements reach at least 75% or as needed
23. Which of the following accounts shall be debited in recording replenishment of PCF?
Appropriate expense account
24. Which of the following accounts is credited in the books of a government entity to reflect a non-cash availment
authority (NCAA) mode of disbursement?
Subsidy from National Government
25. Which of the following accounts shall be debited once cash advance has been granted?
Advances to Officers and Employees
26. When overpayment of expense related to the previous year is discovered, the journal entry to record the
overpayment includes a
Credit to accumulated surplus/(Deficit)
27. Which of the following statements regarding the disbursement of government funds is incorrect?
Officials and employees authorized to travel shall be granted cash advance to cover traveling expenses. The
amount granted shall be accounted for as “Due to Officers and Employees”
28. Which of the following is not true regarding cash advance for payroll?
Advances for payroll may be used for encashment of checks or for liquidation of previous or other types of
cash advances
29. This is used to recognize in the books of national government agencies, the constructive remittance to BIR and
BOC of taxes’ duties withheld
Tax Remittance Advice (TRA)
30. Statement 1: All disbursements require prior certification to establish their validity and legality
Statement 2: A certification for fictitious obligation is void and results to criminal liability by the certifying
officials.
Both statements are true.
31. Entity A disburses a check chargeable against its checking account maintained with Government Servicing Bank.
The journal entry to record disbursement involves a credit to which of the following accounts?
Cash in Bank-Local Currency, Current Account
32. Which of the following government agencies will most likely be able to obtain disbursement authority in the form
of Cash Disbursement Ceiling (CDC)?
 DFA
33. The entry in the books of a government agency with foreign service post to record the receipt of disbursement
authority called Cash Disbursement Ceiling (CDC) includes a
Credit to Subsidy from National Government
34. Which is the account credited when remitting government share for Pag-IBIG contribution?
Due to Pag-IBIG
35. Entity A makes payment through bank transfer. This mode of disbursement is most likely through the use of a(an)
Advice to Debit Account
36. Entity A has a foreign service post. During the period, it receives authorization from DBM allowing it to use the
collections of its foreign service post to pay for the necessary operating expenses. The entry to record the
disbursement authority includes a
Debit to Cash-Constructive Income Remittance
37. Payments of checks that are chargeable against the Treasury Account are credited to the
Cash-Modified Disbursement System (MDS) account
38. According to the GAM for NGAs, disbursements for salaries and wages shall be supported by
Payroll
39. The following disbursements are excluded from payment using LDDAP-ADA except
Payment of government employee salaries
40. Which of the following results to the recognition in the books of accounts classified as Personnel Services?
Set up of payable for payroll
41. Which of the following is true regarding disbursement through electronic Modified Disbursement System
(eMDS)?
The disbursement is made via an online transaction.
42. It is an authority by an agency’s Central Office to its regional and operating units to cover the latter’s cash
requirements.
Notice of Transfer of Allocation (NTA)
43. A government entity makes constructive remittance of taxes withheld to the BIR through Tax Remittance Advice
(TRA). The entry in recording the transaction includes a
Debit to Due to BIR
44. This is used to recognize in the books of national government agencies, the constructive remittance to BIR and
BOC of taxes and customs’ duties withheld.
Tax Remittance Advice (TRA)
45. When a government entity remits its collections to BTr, the journal entry to record the remittance includes a
Debit to Cash-Treasury/Agency Deposit, Regular
46. Entity A acquires an equipment on account and settles the account by debiting accounts payable and crediting
subsidy from national government. The mode of disbursement used is most likely a/an
Non cash availment authority
47. Statement I: Under the ADA mode of disbursement, payments from a government entity are directly debited to
the accounts of the payees through fund/bank
Statement II: ADA works like a check, hence, once notified, the payee can go to the back to withdraw the cash by
presenting the notification
Both statements are false
48. Which of the following is not a form of a disbursement authority?
CBC
49. Entity A wants to make disbursements online. Which of the following should Entity A do so that it can make
valid disbursements online?
Enroll with the eMDS of the LBP
50. All Disbursement Vouchers (DVs) or Payroll shall be approved by the
Head of agency
51. Which of the following shall certify the availability of allotment before obligations can be incurred and
disbursements are made?
Budget officer
52. A certification of availability of funds and completeness of supporting documents is required before a
disbursement of government funds is made. According to the GAM for NGAs, who shall issue this certification?
Chief accountant