A legislation approves the allocation of P100B funds to support the operation of Entity A (a government

agency) in the current year. At the start of first quarter, Entity A receives authorization to incur
obligations for a maximum amount of P45B in that quarter. Entity A extends half of that authorization to
its lower operating units. During the quarter, Entity A receives monthly authorization to disburse funds
not to exceed P15B per month. Entity A extends half of those monthly authorizations to its lower
operating units. at the end of the quarter, total obligations incurred amounted to P40B while total
disbursements amounted to P35B.

The P15B monthly authorizations are received The P45B authorization is referred to as
by Entity A from
a. Obligation
a. BTr c. Congress
b. Allotment
b. DBM d. COA
c. Appropriation

a. DBM d. Sub-allotment

b. BTr
The P45B authorization is received by Entity A
c. COA from

d. Congress a. DBM

b. COA

The allocation of the P100B funds to Entity A is c. BTr

authorized by
d. Congress
a. Congress

b. Department of Budget and Management The half of the P45B authorization extended by
(DBM) Entity A (Central Office) to its lower operating
units is referred to as
c. Bureau of Treasury (BTr)
a. Allotment
d. Commission on Audit (COA)
b. Sub-Allotment

c. Appropriation
Select one:
d. Obligation
a. 230,000.00

b. (200,000.00) The allocation of the P100B funds to Entity A is

referred to as
c. 190,000.00
a. Appropriation
d. 215,000.00
b. Sub-allotment

Which of the following best describes the P15B c. Allotment

monthly authorizations?
d. Obligation
a. Allotment

b. Disbursement authority (ex. Notice of

Transfer of Allocation "NTA") In Entity A's first quarter Statement of
Appropriations Allotments, Obligations,
c. Disbursement authority (ex. Notice of Cash Disbursements and Balances, how much is
Allocation "NCA") shown as "unreleased appropriations"?

d. Obligation Authority (ex. Notice of Cash a. P65B c. 60B

Allocation "NCA")
b. P55B d. 45B
a. P6B
In Entity A's first quarter Statement of
Appropriations, Allotments, Obligations, b. P10B
Disbursements and Balances, how much is
c. P5B
shown as "unobligated allotments"?
d. P15B
a. P15B

b. P10B
The half of the P15B monthly authorizations
c. P6B extended by Entity A (Central Office) to its
lower operating units is referred to as
d. P5B
a. NCAA

In Entity A's first quarter Statement of b. NTA

Appropriations, Allotments, Obligations,
c. Cash Disbursement Ceiling
Disbursements and Balances, how much is
shown as "unpaid allotments"? d. NCA

a. P6B The half of the P15B monthly authorizations

extended by Entity A (Central Office) to its
b. P10B lower operating units is referred to as
c. P5B a. NCAA
d. P15B b. NTA

c. Cash Disbursement Ceiling

Which of the following is not charged with b. Horizontal comparability
government accounting responsibility?
c. Intra-comparability
a. Bureau of Internal Revenue
d. Inter-comparability
b. Non-stock, non-profit private hospital

c. Commission on Audit
This refers to charges for the use of cash or cash
d. Department of Budget and Management equivalents, or amounts due to the entity.

a. Financial expenses

Which of the following transactions is not b. Personnel services

recorded through a credit to the “Cash-
c. Capital outlays
Modified Disbursement System (MDS), Regular”
account? d. Interest income
a. Payment of accounts payable wherein the tax
portion is withheld. Compared to the accounting for business
entities, government accounting places greater
b. Constructive remittance of taxes withheld to
emphasis on the sources and utilization of
the BIR.
government funds and the management's
c. Granting of cash advance for payroll. stewardship

d. Reversion of unused NCA at the end of the True

period.
False

An item is recognized as an asset if it meets

both the "probable future economic benefits"
and "reliable measurement" criteria regardless The various registries maintained by the
of whether the item is a resource controlled government entities primarily serve as internal
arising from past events. control for controlling and monitoring the
conformance of actual results with the
True
approved budget.
False
True
Entity A, a government entity, has an unused
False
NCA of ₱50,000 at the end of the current year.
The entry to record the reversion of unused Feedback
NCA is

a.
Both the ORS and RAOD are updated each time
b. No journal entry. an obligation is incurred, a payable is recorded
for the obligation incurred, and disbursements
c.
are made to settle the recorded payables.
d.
True

False
This refers to the comparability between the
financial statements of different entities?
Revenues of a government entity arise from
a. Vertical comparability
exchange transactions only.
True

False This accounting concept is necessary so that

Which of the following accounts is credited
when a government entity remits contributions
to the GSIS, Philhealth and PAG-IBIG?
users can use information in the financial
statements in noting differences and similarities
between that information presented and
information from other sources that the user
may have.

a. Cash-Treasury/Agency Deposit, Regular a. Financial statement analysis and ratios

b. Cash-Collecting Officers b. Feedback value or confirmatory value

c. Cash-Modified Disbursement System, Regular c. Understandability

d. Cash-Tax Remittance Advice d. Comparability

Taxes are the main source of funds of the Which of the following reflects a Non-Cash
government. Availment Authority (NCAA) mode of
disbursement?
True
a.
False
b.

c. None of these

d.
Which of the following is correct regarding zero-
based budgeting?

a. Several parties participate in the budget

preparation starting from the lowest levels of
the government to the highest levels.
Budget deliberations in the Congress start in the
b. All zeroes in the budget are omitted. House of Senate.
c. All proposed programs and expenditures in True
the upcoming year must be new. Programs and
expenditures in the previous year should never False
be carried over to the next year.

d. The current year’s budget is formulated

without regard to the previous year’s budget. The constructive remittance of taxes withheld
through the TRA gives rise to the recognition of
revenue.

Which of the following best describes the P15B True

monthly authorizations?
False
a. Allotment

b. Disbursement authority (ex. Notice of

Transfer of Allocation "NTA")
The journal entry to record the collection of
c. Disbursement authority (ex. Notice of Cash
Allocation "NCA") unbilled tax revenue (e.g., Travel Tax) through
direct deposit in Authorized Agent Banks is
d. Obligation Authority (ex. Notice of Cash
Allocation "NCA") a.

b.
c. False

d. Feedback

According to the GAM for NGAs, information Entity A, a government entity, grants a ₱10,000
has this qualitative characteristic if it can be cash advance for the travelling expenses of an
used to assist in evaluating past, present or employee. The employee liquidates ₱8,000 of
future events or in confirming or correcting past the cash advance and remits the excess cash
evaluations. advance of ₱2,000. After recording the grant of
cash advance and the liquidation thereof but
a. Feedback value before adjustment for the collection of the
b. Predictive value excess cash advance, how much is the recorded
expense in the books of accounts?
c. Relevance
a.
d. Materiality
b.

During the period, Entity A, a government
entity, withheld ₱100,000 taxes from its
payments to employees and suppliers. On
September 14 of the current year, Entity A
remitted the taxes withheld to the BIR through
Tax Remittance Advice. The entry to record the
remittance includes
a.
b. None of these
c.
d. a and b
c.
d.
Compared to the accounting for business
entities, government accounting places greater
emphasis on the sources and utilization of
government funds and the management's
stewardship over government resources.
True
False
The principles in the GAM for NGAs are similar
to the principles in the PFRs.

True

False

This type of budget is prepared in such a way The GAM for NGAs aims to update all of the
that estimated revenues exceed estimated following except
expenditures. a. rules and regulations regarding the filing and
a. Balanced Budget payment of taxes by government employees

b. Excess Budget b. accounting books, registries, records, forms,

reports and financial statements
c. Obligation Budget
c. coding structure and accounts
d. Budget meal
d. standards, policies, guidelines and
procedures in accounting for government funds
and property
The budget preparation in the Philippines uses a
"bottom-up" approach. Under this approach,
the budget preparation starts from the highest
levels of the government down to the lowest Taxes are the main source of funds of the
levels. government.

True True
False
The Principles used in the financial reporting of
government entities is based on NGAS.
True
False
The Commission on Audit (COA) is responsible
for
a. the formulation and implementation of the
national budget with the goal of attaining the
nation’s socio-economic objectives
b. directly implementing the projects of the
government
c. promulgating accounting and auditing rules
and regulations
d. receiving and keeping national funds and
managing and controlling the disbursements
thereof
Obligations recorded in the registries but not
yet in the accounting books are referred to as
a. Erroneous Recording
b. Unpaid Obligations
c. Not Yet Due and Demandable
d. Contingent Liabilities
In the financial reporting system of the national
government, to which of the following shall an
entity reconciles its cash records?
a. Bureau of Treasury
b. Office of the President
c. Department of Budget and Management
d. Commission on Audit
The GAM for NGAs is promulgated by the
Philippine Congress under the authority
conferred to it under the Philippine
Constitution.
True
False
Which of the following approaches to budget
preparation provides the best internal control?
a. Top-down budgeting
b. Incremental budgeting
c. Zero-based budgeting
d. Zero-sum budgeting
Which of the following does not properly
describe the budget process used in the
Philippines?
a. Zero-based budgeting
b. Top-down budgeting
c. Non-incremental budgeting
d. Bottom-up budgeting
Which of the following statements is incorrect
regarding the GAM for NGAs?
a. The COA shall 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,
pursuant to Section 2, par. (1), Article IX-D of
the 1987 Philippine Constitution.
b. The objectives of general purpose financial
statements (GPFSs) are to provide information
about the financial position, financial
performance, and cash flows of an entity that is
useful to a wide range of users in making and
evaluating decisions about the allocation of
resources. Specifically, the objectives of general
purpose financial reporting in the public sector
are to provide information useful for decision-
making, and to demonstrate the accountability
of the entity for the resources entrusted to it.
c. The DBM accounts for the cash, public debt
and related transactions of the NG.
d. 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 NGAs, Bureau of the
Treasury (BTr), Department of Budget and
Management (DBM), and the COA.

Arrange the following steps according to the
sequence that the appear in the budget cycle.
I. Allotment
II. Bicameral deliberations
III. Budget accountability reports
IV. President's enactment of the GAA
V. Budget hearings with the DBM
a. II, V, IV, I and III
b. V, IV, II, I and III
c. V, II, IV, I and III
d. V, I, II, IV and III
It refers to the amount contracted by a duly
authorized administrative officer for which the
government is heal liable.
a. Obligation
b. Appropriation
c. Disbursment
d. Allotment
Taxes are compulsory payments, imposed on
persons, properties or activities, intended to
provide revenue to the government. Taxes
include fees, fines and penalties.
True
False
The entry to record the granting of cash
advance for payroll fund is
a.
b.
c.
d.
Which of the following statements is correct
regarding the Fundamental Principles for
Disbursement of Public Funds under P.D. No.
1445?
a. Generally accepted principles and practices of
accounting as well as of sound management
and fiscal administration shall be observed and
shall be presumed to have higher authority in
cases where these principles conflict with the
law.
b. All disbursements or dispositions of
government funds or property shall invariably
bear the approval of the COA.
c. Trust funds shall be available and may be
spent only for the specific purpose for which
the trust was created or the funds received.
d. No money shall be paid out of any public
treasury or depository except through the
issuance of Modified Disbursement System
Checks.
A government entity can make disbursements
even before it receives a disbursement
authority.
True
False
The GAM for NGAs is promulgated primarily to
harmonize government accounting standards
with the U.S. GAAP.
True
False a. Special Journal

According to the GAM for NGAs, revenue from b. Cash Disbursement Journal
exchange transactions are measured at the
c. Check Disbursement Journal
amount of cash received.

True d. General Journal

False

The main source of revenue for the government Which of the following accounts is debited
when a government entity remits its collections
is taxes.
to the National Treasury?
True
a. Cash-Tax Remittance Advice
False
b. Cash-Collecting Officers

c. Cash-Treasury/Agency Deposit, Regular

Entity A, a government entity, made
disbursements for the travelling expenses of its d. Cash-Modified Disbursement System (MDS),
Regular
personnel. These expenditures are most likely
classified as

a. MOOE In Entity A's first quarter Statement of

b. Financial Expenses Appropriations, Allotments, Obligations,
Disbursements and Balances, how much is
c. Personnel Services shown as "unobligated allotments"?

d. Capital Outlays a. P15B

b. P10B

The receipt of a disbursement authority in the c. P6B

form of Non-Cash Availment Authority (NCAA)
is debited to which of the following accounts? d. P5B

a. Subsidy from National Government

b. Accounts Payable Which of the following principles is not in

accordance with the Basic Government
c. Cash-Modified Disbursement System (MDS), Accounting and Budget Reporting Principles
Regular under the GAM for NGAs?

d. Cash-Constructive Income Remittance a. RCA prescribed by COA

b. modified accrual basis of accounting in

Which of the following is recorded in the accordance with the PPSAS
Obligation Request and Status (ORS)?
c. fund cluster accounting
a. Entering into employment contracts with
employees d. financial statements based on both
accounting and budgetary records
b. Receipt of allotment from DBM
e. budget basis for presentation of budget
c. Receipt of notice of appropriations information in the financial statements (FSs) in
accordance with PPSAS 24
d. Receipt of Notice of Cash Allocation from the
DBM

A journal entry with a credit to the "Cash- All checks/ADA drawn during the day, whether
Modified Disbursement System (MDS), Regular" released or unreleased including cancelled
account will most likely be recorded in the checks shall be recognized chronologically in
the Checks/ADA Disbursement Record
maintained by the Cash/Treasury Unit.
a. Reporting of Disbursements.
b. Authority to Disburse/Pay.
c. Disbursement Voucher/Payroll.
d. Maintenance of Records.
According to the GAM for NGAs, the receipt of
concessionary loans by government entities
may give rise to revenue recognition.
True
False
After receiving its obligational authority
amounting to ₱4B, Entity J enters into binding
agreements for the eventual payments of a
total sum of ₱3B. The “₱3B” event can be
described as
a. Disbursement
b. Allotment
c. Disbursement authority
d. Obligation
Which of the following accounts is credited
when a government entity remits contributions
to the BIR?
a. Cash-Treasury/Agency Deposit, Regular
b. Cash-Tax Remittance Advice
c. Cash-Collecting Officers
d. Cash-Modified Disbursement System, Regular
Other sources of funds of the government
include fees, borrowings, and grants from other
governments and international bodies.
True
False
When the substance of a transaction or event
differs from its legal form, the entity should
report the
a. legal form
b. substance
c. a trade-off between a and b
d. either a or b, based on their significance
The Notice of Cash Allocation (NCA) is an
authority issued by the DBM to central, regional
and provincial offices and operating units to
cover their cash requirements.
True
False
Other sources of funds of the government
include fees, borrowings, and grants from other
governments and international bodies.
True
False
Currently, the financial reporting of the
government entities is based on NGAs.
True
False
After the budget call from the DBM, the
proposed budget of various agencies are
submitted immediately to the Office of the
President for review.
True
False
According to the GAM for NGAs, the basis of
accounting to be applied by government is the
a. Any of these as a policy choice
b. Cash Basis
c. Modified accrual basis
d. Accrual Basis
Which of the following is not one of the
registries maintained by a government entity?
a. All of these are maintained by a government provided that, an official receipt is issued within
entity a short period of time as may be prescribed by
the COA.
b. Registry of Appropriations and Allotments

c. Registries of Allotments, Obligations and

Disbursements
d. Registries of Budget, Utilization and
Disbursements
e. Registries of Journals and Ledgers
Which of the following qualitative
characteristics may be sacrificed when
reporting information on a timely basis?
a. Substance over form
b. Relevance

The GAM for NGAs is promulgated by the c. Reliability

a. Bureau of Internal Revenue (BIR) d. Faithful representation

b. Commission on Audit (COA)

c. Commission on Accounting (COA)

d. Board of Accountancy (BOA)

Which of the following is charged with the

responsibility of keeping the general accounts,
and related documents, of the Government It is an authorization issued by the DBM to
NGAs to incur obligations. It is also referred to
a. BTr as Obligatory Authority.

b. NGAs a. Appropriation

c. DBM b. Budget Hearings

d. COA c. Budget Call

d. Allotment

Which of the following is one of the

Fundamental Principles for Revenue under the
GAM for NGAs? When cash flows are deferred, the fair value of
the consideration receivable is its present value.
a. Money in the hands of the Collecting Officer
may be utilized for the purpose of cashing True
private checks, upon proper endorsement and
False
identification of the payee or endorsee. Checks
drawn in favor of the government in payment
of any such indebtedness shall likewise be
accepted by the officer concerned. The NGAs are responsible for

b. No payment of any nature shall be received
by a collecting officer without immediately
issuing an official receipt in acknowledgement
thereof. The receipt may be in the form of
postage, internal revenue or documentary
stamps and the like, officially numbered
receipts, subject to proper custody,
accountability, and audit.
c. All of these
a. implementing the national budget with the
goal of attaining the nation’s socio-economic
objectives.
b. directly implementing the projects of, and
performing the functions delegated by, the
government.
c. promulgating accounting and auditing rules
and regulations.

d. Temporary receipts may be issued to

acknowledge the receipt of public funds;
d. receiving and keeping national funds and
managing and controlling the disbursements
thereof.
All revenues shall be remitted to the BTr and
included in the Special Fund, unless another law
specifically requires otherwise.
True
False
The taxable event for income tax is the passage
of the time period for which the tax is levied.
True
False
The principles used in the financial reporting of
government entities are very unique that only a
very few of these principles are similar to those
that are applied to business entities.
True
False
Which of the following events or transactions
requires recording in the books of accounts of a
government entity?
a. Disbursement Authority
b. Incurrence of Obligation
c. Appropriation
d. Allotment
e. None of these
The GAM for NGAs requires the Collecting
Officer to issue an official receipt to
acknowledge the receipt of the Notice of Cash
Allocation.
True
False
No journal entry is made for the receipt of this
type of disbursement authority.
a. NCAA
b. CDC
c. NCA
d. NONE OF THESE
The remittance of amounts withheld to the
other government agencies, such as the BIR,
BOC, GSIS, Philhealth, and Pag-IBIG, is done
through the TRA.
True
False
This type of expenditure pertains to all types of
employee benefits.
a. Maintenance and Other Operating Expenses
b. Financial Expenses
c. Personnel Services
d. Capital Outlay
The “Cash – Treasury/Agency Deposit, Regular”
account is used in which of the following
transactions?
a. A disbursement authority in the form of Cash
Disbursement Ceiling is received.
b. Collections from customers are made
through direct deposit in the entity’s account
maintained with a Government Servicing Bank
(GSB).
c. Collections of revenue are remitted to the
BTr.
d. Taxes withheld are remitted to the BIR.
A unique financial reporting requirement of
government entities is the use of fund cluster
accounting. Under the fund cluster accounting,
separate books and reports are prepared for
each type of fund held by a government entity.
True
False
What is the legal basis of the COA in
promulgating the GAM for NGAs?
a. Article IX-D, Section 2 par. (2) of the 1987
Constitution of the Republic of the Philippines
The various registries maintained by
government entites are considered, technically
as
a. Budget records

b. Revised Penal Code, Art. 217 b. Log Books

c. State Audit Code of the Philippines, P.D. No. c. Book of Accounts

1445, Sec. 109
d. General Ledgers
d. R.A. 9298

Separate accounting records and budget

Which of the following is not one of the registries are maintained for each fund cluster.
Fundamental Principles for Disbursement of
True
Public Funds under the GAM for NGAs?

a. Fiscal responsibility shall, to the greatest False

extent, be assumed solely by the Head of the
government agency.
Payments to government entities in the form of
b. Trust funds shall be available and may be checks are not allowed.
spent only for the specific purpose forwhich the
trust was created or the funds received. True

c. Government funds or property shall be spent False

or used solely for public purposes.

d. No money shall be paid out of any public

Entity A acquires equipment from a supplier, on
treasury or depository except in pursuance of
account. A lender settles the account of Entity A
an appropriation law or other specific statutory
by directly paying the supplier the proceeds of a
authority.
loan payable that is recorded in the BTr’s books.
This mode of disbursement is called

This approach to budgeting requires the a. Advice to Debit Account (ADA)

justification of items in the budget irrespective
b. Cash Disbursement Ceiling (CDC)
of whether they are new or carried over from
the previous year. c. Non-Cash Availment Authority (NCAA)
a. Incremental budgeting d. Notice of Transfer of Allocation (NTA)
b. Bottoms-down budgeting

c. Bottoms-up budgeting

d. Zero-based budgeting

Choose the correct statement (Tax Type -

Taxable Event)

a. Income tax - Purchase or sale of taxable

goods or services

b. Value added Tax - Earning of taxable income

c. Property Tax - Passage of the time period of

which is tax is levied

d. Customs Duty - Undertaking of a taxable

activity