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PROBLEM 01:
1. What is the role of the Bureau of Treasury in relation to government
accounting responsibility?
A. To receive and keep national funds and manage or control
disbursement thereof.
B. To design, prepare and approve the accounting systems of
government agencies.
C. To keep the general accounts of the national government.
D. To prepare the annual financial report of the national government, its
instrumentalities and government-owned or controlled corporations.

2. It refers to an accounting entity for recording expenditures and

revenue associated with a specific activity for which accounting
records are maintained and periodic reports are prepared.
A. Financial accounting and reporting
B. Public sector accounting and reporting
C. Fund cluster accounting
D. Responsibility accounting

3. It represents the accounts classification as to assets, liabilities,

equity, income and expenses.
A. Code
B. Account group
C. Major account group
D. Sub-major account group

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 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
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B. Appropriation
C. Allotment
D. Commitment

PROBLEM 02:
Entity A is a newly formed government agency. Entity A ‘s transactions
and events during the calendar year 20x1 are as follows:
A. Received appropriation of P500,000.
B. Received allotment of P450,000.
C. Incurred obligations amounting to P440,000.
D. Received Notice of Cash Allocation of P430,000.
E. Accrued P80,000 salaries through granting, and liquidation, of cash
advance. The breakdown of the salaries is as follows:
Salaries and Wages P 70,000
Personal Economic Relief Allowance (PERA) 10,000
Gross Compensation P 80,000
Withholding Tax P 18,000
GSIS 4,000
Pag-IBIG 1,000
PhilHealth 2,000
Total Salary Deduction P 25,000
F. Received delivery of purchased office equipment worth P200,000.
The equipment has an estimated useful life of 5 years and a 5%
residual value. Entity A recognizes monthly depreciation every end
of the month using the straight-line method. The equipment is
acquired on January 1, 20X 1.
G. Paid the accounts payable from the purchase of equipment above.
Taxes withheld amount to P12,000.
H. Received delivery of purchased offices supplies worth P100,000.
The office supplies were purchased through check. Taxes withheld
amount to P5,000.
I. Issued office supplies worth P90,000 to end user.
J. Granted P20,00 cash advance to an employee for travelling expenses
on an official local travel. The employee liquidated P17,00 and
remitted the excess cash advance.
K. Collected unbilled service income for Permit Fees of P40,000 and
remitted P30,000 of the total collection.
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L. Paid water and electricity expenses amounting to P5,000 and

P10,000, respectively. Taxes withheld amount to P2,000.
M. Remitted the taxes withheld amount to the BIR.
N. Remitted contributions to GSIS, PhilHealth and Pag-IBIG.
Requirement:
a. Record the transactions and events above. If no journal entry is
needed, state the registry or the other document where the
transaction or event is recorded.
b. Post the transactions in the ledger. Use T-accounts.
c. Prepare the unadjusted trial balance.
d. Prepare the adjustments, if any.
e. Prepare the closing entries.

Requirement (a): Recordings

a. The appropriation is posted (recorded) in the Registry of
Appropriations and Allotments (RAPAL).
b. The allotment is posted (recorded) in the Registry of Appropriations
and Allotments (RAPAL) and Registries of Allotments, Obligations and
Disbursements (RAOD).
c. The obligations are recorded in the Obligation Request and Status
(ORS) and Registries of Allotments, Obligations and Disbursements
(RAOD).
d. Journal entry
Date Cash-Modified Disbursement System (MDS), 430,000
(d)
Regular 430,000
Subsidy from National Government
To recognize receipt of NCA from the
DBM

e. Journal entries
(e.1) Salaries and Wages, Regular 70,000
Personal Economic Relief Allowance (PERA) 10,000
Due to BIR 18,000
Due to GSIS 4,000
Due to Pag-IBIG 1,000
Due to PhilHealth 2,000
Due to Officers and Employees 55,000
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To recognize payable to officers and

employees upon approval of payroll
(e.2) Advances for Payroll 55,000
Cash-Modified Disbursement
System (MDS), Regular 55,000
To recognize grant of cash advance for
payroll
(e.3) Due to Officers and Employees 55,000
Advances for Payroll 55,000
To recognize liquidation of Payroll Fund

f. Journal entries
(f.1) Office Equipment 200,000
Accounts Payable 200,000
To recognize delivery of office
equipment
(f.2) Depreciation-Machinery and Equipment 38,000
Accumulated Depreciation – O.E. 38,000
To recognize depreciation of office
equipment
g. Journal entry
(g) Accounts Payable 200,000
Due to BIR 12,000
Cash – Modified Disbursement
System (MDS), Regular 188,000
To recognize payment of accounts
payable
h. Journal entry
(h) Office Supplies Inventory 100,000
Due to BIR 5,000
Cash – Modified Disbursement
System (MDS), Regular 95,000
To recognize delivery of office supplies
i. Journal entry
(i) Office Supplies Expense 90,000
Office Supplies Inventory 90,000
To record the issuance of office supplies
to end users
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j. Journal entry
(j.1) Advances to Officers and Employees 20,000
Cash – Modified Disbursement
System (MDS), Regular 20,000
To recognize grant of cash advance for
travel
(j.2) Traveling Expenses - Local 17,000
Advances to Officers and Employees 17,000
To recognize liquidation of cash advance
for travel
(j.3) Cash – Collecting Officers 3,000
Advances to Officers and Employees 3,000
To recognize refund of excess cash
advance for travel
(j.4) Cash – Treasury/Agency Deposit, Regular
Cash – Collecting Officers 3,000
To recognize remittance of the refund of 3,000
excess cash advance for travel

k. Journal entry
(k.1) Cash – Collecting Officers 40,000
Permit fees 40,000
To recognize collection of unbilled
service income
(k.2) Cash-Treasury/Agency Deposit, Regular 30,000
Cash – Collecting Officers 30,000
To recognize remittance of income to
the BTr

l. Journal entry
(l) Water Expenses 5,000
Electricity Expenses 10,000
Due to BIR 2,000
Cash – Modified Disbursement
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System (MDS), Regular 13,000

To recognize issuance of MDS checks as
payment for expenses

m. Journal entry
(m.1) Cash-Tax Remittance Advice 37,000
Subsidy from National Government 37,000
To recognize the constructive receipt of
NCA for TRA
(m.2) Due to BIR 37,000
Cash-Tax Remittance Advice 37,000
To recognize constructive remittance to
BIR of taxes withheld through TRA

n. Journal entry
(n) Due to GSIS 4,000
Due to Pag-IBIG 1,000
Due to PhilHealth 2,000
Cash-Modified Disbursement 7,000
System (MDS), Regular
To recognize remittance to GSIS,
Pag-IBIG and PhilHealth

Requirement (b): Posting in the ledger

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Requirement (c): Unadjusted Trial Balance

Accounts Debit Credit

Cash - Collecting Officers 10,000

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Cash-Treasury/Agency Dep., Reg. 33,000

Cash-MDS, Regular 52,000

Cash-Tax Remittance Advice -

Office Supplies Inventory 10,000

Office Equipment 200,000

Accumulated Depreciation - Equipment 38,000

Advances for Payroll -

Advances to Officers and Employees -

Accounts Payable -

Due to Officers and Employees -

Due to BIR -

Due to GSIS -

Due to Pag-IBIG -

Due to PhilHealth -

Accumulated Surplus (Deficit) -

Permit Fees 40,000

Subsidy from NG 467,000

Salaries and Wages, Regular 70,000

PERA 10,000

Travelling Expenses - Local 17,000

Office Supplies Expense 90,000

Water Expenses 5,000

Electricity Expenses 10,000

Depreciation-Machinery & Equipment 38,000

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Totals 545,000 545,000

Requirement (d): Adjusting Entry

(AJE) Subsidy from National Government 52,000

Cash-Modified Disbursement
System (MDS), Regular 52,000
To recognize reversion of unused NCA
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QUIZ 01:
NAME: _______________________________ID No.: __________
Requirement (e): Closing entries

(CL1) Accumulated Surplus/(Deficit) 33,000

Cash-Treasury/Agency Deposit,
Regular 33,000
To recognize closing of cash deposit account
(CL2) Permit Fees 40,000
Subsidy from National Government 415,000
Salaries and Wages, Regular 70,000
PERA 10,000
Travelling Expenses - Local 17,000
Office Supplies Expense 90,000
Water Expenses 5,000
Electricity Expenses 10,000
Depreciation-Mac. & Equipt. 38,000
Revenue and Expense Summary 215,000
To recognize closing of income and expense accounts
(CL3) Revenue and Expense Summary 215,000
Accumulated Surplus/(Deficit) 215,000
To recognize closing of revenue and expense summary