Government Accounting

Quiz 8

Write the letter pertaining to best answer.

1. Paulo Jake is the caretaker of the farm where the breeding stocks of Philippine
Council for Agriculture, Aquatic and Natural Resources Research and Development
is located. The caretaker receives P10,000 monthly salary. What is the entry to
recognize the payment of salary of the caretaker?

a. Salary and Wages 10,000

Cash in Bank-Local Currency, Current
Account 10,000
b. Salaries and Wages-Casual/Contractual 10,000
Cash in Bank-Local Currency, Current
Account 10,000
c. Salaries and Wages-Casual/Contractual 10,000
Cash-Modified Disbursement System,
Regular 10,000
d. Salary and Wages 10,000
Cash-Modified Disbursement System,
Regular 10,000

2. On January 1, 2020, the Department of Science and Technology decided to lease out
an owner-occupied building with the following information:

Cost P4,500,000
Accumulated Depreciation 2,250,000
Impairment 200,000
Residual Value 50,000
Original useful life 10 years
Remaining useful life 5 years

The journal entries shall to recognize transfer from Plant, Property and Equipment to
Investment Property includes the following, except:

a. A debit to Investment Property, Buildings for P4,500,000.

b. A debit to Impairment Losses – Buildings for P200,000.
c. A credit to Buildings for P4,500,000.
d. A credit to Accumulated Impairment Losses-Investment Property, Buildings for
P200,000.

3. Forest Management Bureau purchased a land for capital appreciation at a cash price
of P3,000,000. Professional fees and transfer taxes totaling to P120,000 were also
paid. The journal entry to recognize the purchase of investment property includes the
following, except:

a. A credit to Cash – Modified Disbursement System, Regular for P3,120,000.

b. A debit to Investment Property for P3,000,000.
c. A credit to Cash-Disbursing Officer for P3,120,000.
d. A debit to Professional fees and Transfer taxes for P120,000.

4. Which of the following is not correct with regards to the policies on idle,
unserviceable and fully depreciated PPE?

a. A PPE is said to be unserviceable if it is no longer capable of providing the entity

with future economic benefits or service potential.
b. The cost of fully depreciated assets remaining in service and the related accumulated
depreciation and accumulated impairment losses shall not be removed from the
accounts.
c. Temporary idle activity or abandonment of PPE precludes to depreciating the asset,
as future benefits are consumed not only through usage but also through
obsolescence, and wear and tear.
d. PPE reported in the Inventory and Inspection Report of Unserviceable Property shall
be dropped from the books by debiting Impairment Loss-Property, Plant and
Equipment.

5. Intellectual Property Office of the Philippines spent P750,000 (inclusive of VAT) in

acquiring a new software package from ITB Technologies Inc. The useful life of the
 software is determined to be 5 years with no residual value. The journal entry to
recognize the amortization of the software at the end of the first year?

a. Intangible Assets 150,000

Accumulated Amortization-Computer Software 150,000
b. Intangible Assets 150,000
Computer Software 150,000
c. Amortization-Intangible Assets 150,000
Computer Software 150,000
d. Amortization-Intangible Assets 150,000
Accumulated Amortization-Computer Software 150,000

6. On September 15, the Department of Finance remitted to the Bureau of Treasury the
P420,000 collections of their Collecting Officer for passports and visa fees from the
month of August. What is the journal entry to record the collection of passports and
visa fees?

a. Cash Collecting Officers 450,000

Cash in Bank-Local Currency Current
Account 450,000
b. Cash-Treasury/Agency Deposit, Regular 450,000
Passport and Visa Fees 450,000
c. Cash Collecting Officers 450,000
Passport and Visa Fees 450,000
d. Cash Collecting Officers 450,000
Cash-Treasury/Agency Deposit, Regular 450,000

7. Philippine Council for Agriculture, Aquatic and Natural Resources Research and
Development purchased an agricultural machine on account at P120, 000, with credit
terms of 3/10, n/30. What is the journal entry to record the purchase of machine on
account?

a. Agricultural and Forestry Equipment 120,000

Accounts Payable 120,000
b. Plant, Property and Equipment 120,000
 Accounts Payable 120,000
c. Agricultural and Forestry Equipment 116,400
Accounts Payable 116,400
d. Plant, Property and Equipment 116,400
Accounts Payable 116,400

8. During 2020, Bureau of Plant Industry transferred cash of P760,000 to Bureau of

Agricultural Research for a fertilizer testing project. What is the journal entry of
Bureau of Plant Industry to record the transfer of funds?

a. Cash-Treasury/Agency Deposit/Trust 760,000

Cash-Collecting Officers 760,000
b. Due from Bureau of Plant Industry 760,000
Cash-Modified Disbursement System,
Regular 760,000
c. Due from Bureau of Plant Industry 760,000
Cash-Treasury/Agency Deposit/Trust 760,000
d. Cash-Collecting Officers 760,000
Due to Bureau of Plant Industry 760,000

9. The collections of Bureau of Local Government Finance amounting to P900,000 was

remitted to the Bureau of Treasury. What is the journal entry of the Bureau of
Treasury (BTr) to record the receipt of remittance of income of Bureau of Local
Government Finance?
 Cash in Bank, Local Currency-Bangko Sentral ng
a. Pilipinas 900,000
Cash-Treasury/Agency Deposit, Regular 900,000

b. Cash-Treasury/Agency Deposit, Regular 900,000

Cash-Collecting Officer 900,000
Cash in Bank, Local Currency-Bangko Sentral ng
c. Pilipinas 900,000
Cash-Collecting Officer 900,000
d. Cash-Treasury/Agency Deposit, Regular 900,000
Cash in Bank, Local Currency-Bangko Sentral ng
Pilipinas 900,000

10. The The Secretary of Civil Aeronautics Board was granted cash advance amounting
to P150,000 for their travelling expenses to represent the country in an international
convention to be held in New York. What is the journal entry to record the grant of
cash advances?

a. Cash Disbursing Officer 150,000

Cash-Modified Disbursement System, Regular 150,000

b. Cash-Collecting Officers 150,000

Advances to Officers and Employees 150,000
c. Advances to Officers and Employees 150,000
Cash Disbursing Officer 150,000
d. Advances to Officers and Employees 150,000
Cash-Modified Disbursement System, Regular 150,000