Acctg 322N

Accounting for Government and NPO

Mock Test

TEST I: Multiple Choice Questions / Identification

1. Determine the correct standard code of the following
a. PPSAS 32-Revenue from Exchange Transactions and PPSAS 9-Revenue from
Non-exchange Transactions.
b. PPSAS 23-Revenue from Exchange Transactions and PPSAS 23-Revenue from
Non-exchange Transactions.
c. PPSAS 9-Revenue from Exchange Transactions and PPSAS 23-Revenue from
Non-exchange Transactions.
d. PPSAS 9- Revenue from Non-exchange Transactions and PPSAS 23- Revenue
from Exchange Transactions
2. This refers to is a transfer made according to the provisions of a deceased person’s will.
The past event giving rise to the control of resources embodying future economic
benefits or service potential for a bequest occurs when the entity has an enforceable
claim, for example on the death of the testator, or the granting of probate, depending on
the laws of the jurisdiction. (Par. 90, PPSAS 23)
a. Gifts, Donations and Goods In-kind
b. Services in-kind
c. Pledges
d. Bequest
3. This refers to loans received by an entity at below market terms.
a. Special, Fiduciary and Trust Funds
b. Shares, Grants and Donations
c. Royalties
d. Concessionary loans
4. These economic benefits or service potential received or receivable by NGAs, from an
individual or other entity, as determined by a court or other law enforcement body, as a
consequence of the individual or other entity breaching the requirements of laws or
regulations. (Par. 88, PPSAS 23)
a. Fines
b. Revenue
c. Pledges
d. Money
5. This refers to voluntary transfers of assets, including cash or other monetary assets,
goods in-kind and services in-kind that one entity makes to another, normally free from
stipulations. The transferor may be an entity or an individual. For gifts and donations of
cash or other monetary assets and goods in-kind, the past event giving rise to the
control of resources embodying future economic benefits or service potential is normally
the receipt of the gift or donation. (Par. 93, PPSAS 23)
a. Services in-kind
b. Gifts, Donations and Goods In-kind
6. It is a transaction in which an entity either receives value from another entity without
directly giving approximately equal value in exchange, or gives value to another entity
without directly receiving approximately equal value in exchange. (Par. 11, PPSAS 9)
a. Exchange Transactions
b. Non-exchange Transactions
7. It refers to the gross inflow of economic benefits or service potential during the reporting
period when those inflows result in an increase in net assets/equity, other than increases
relating to contributions from owners.
a. Revenue
b. Fines
c. Exchange Transactions
d. Imprest Fund System
8. Which of the following would not be considered a government or nonprofit organization?
 a. A software company that sells software exclusively to state and local
governments
b. A public elementary school
c. A church
d. A private trust organized for charitable purposes
9. Which of the following activities would most likely be accounted for as a business type
activity?
a. Fire protection
b. Recreation
c. Water Operations
d. Street Maintenance
10. Which of the following characteristics best distinguishes a government entity from a
business entity?
a. Governments operate in a very small section of the economy while businesses
operate globally
b. Cost Analysis and other control and evaluation techniques are essential to
ensure that resources are used economically and efficiently
c. Those contributing resources to the entity do not necessarily receive a direct or
proportionate share the services
d. Businesses must acquire and convert scarce resources while governments can
demand whatever they need
11. Which of the following activities is performed by governments but not by not-for-profit
organizations?
a. Issuing tax-free debt
b. Receiving grants
c. Preparing budgets
d. Providing services to constituents
12. Which of the following is included in service income?
a. Spectrum Usage Fee
b. Communication network fees
c. Rent/Lease income
d. Affiliation Fees
13. This refers to charges for the use of cash and cash equivalents
a. Cash and cash equivalents
b. Royalties
c. Interest income
d. Dividends
14. Agency A, a government entity, wants to make disbursement. Arrange the following
events in the correct sequence before Agency A can make a valid disbursement: I.
Allotment; II. Disbursement authority; III. Appropriation; IV. Incurrence of obligation
a. III, IV, I, II
b. III, I, IV, II
c. III, I, II, IV
d. I, III, II, IV
e. None of the choices
15. These are examples of Automatic Appropriations, except:
a. Domestic Grant Proceeds
b. Retirement and Life Insurance Premiums
c. Pension under R.A. No. 2087, as amended by P.D. No. 1625 and R.A. No. 5159
d. Tax Refunds
e. None of the choices
16. The key elements of the coding framework for UACS, except:
a. Organization codes
b. Location codes
c. Object Codes for Assets, Liabilities, Equity, Income and Expenses.
d. MFO/Program, Activity and Project (PAP) codes
e. Financing Source codes
17. This further classifies the account within the major account group, e.g. for cash and cash
equivalents: Cash on Hand, Cash in Bank-Local Currency, Cash in Bank-Foreign
Currency.
a. General Ledger Account
b. UACS Sub-Object Code
c. Major Account Group
d. Account Group
e. Sub-Major Account Group
18. Reporting requirements that will be best served by the UACS includes the following,
except:
a. Financial Statements as required by the Public Sector Accounting Standards
Board of the Philippines,
b. Financial reports as required by the Department of Budget and Management
(DBM) and the Commission on Audit (COA),
c. Economic statistics consistent with the Government Finance Statistics (GFS)
Manual 2001.
d. Management reports as required by the executive officials/heads of departments
and agencies, and
e. None of these options
19. The COA, through the Government Accountancy Sector (GAS) is responsible to, except:
a. consolidates the FSs and budget accountability reports of all NGAs and the BTr
with COA’s records to come up with an Annual Financial Report (AFR) for the
NG as required in Section 4, Article IX-D of the 1987 Philippine Constitution;
b. maintains budget records showing the overall approved budget of the NG and its
execution/implementation;
c. prepares other financial reports required by law for submission to oversight
agencies
d. All of these option
e. None of these option
20. The major group account group code of Investments is:
a. 01
b. 02
c. 03
d. 04
21. The Basic Government Accounting and Budget Reporting Principles. Each entity shall
recognize and present its financial transactions and operations conformably to the
following, except:
a. single entry bookkeeping
b. accrual basis of accounting in accordance with the PPSAS;
c. budget basis for presentation of budget information in the financial statements
(FSs) in accordance with PPSAS
d. generally accepted government accounting principles in accordance with the
PPSAS and pertinent laws, rules and regulations;
e. None of these options
22. This serves as instruction to the Modified Disbursement System, Government Servicing
Banks to debit a specified amount from its available NCA balance under regular MDS
sub-account for payment of creditors/payees through the Expanded Modified
Disbursement Payment Scheme.
a. Advice to Debit Account
b. Authorized Card Holder
c. Direct Payment System
d. Commercial Check
23. These are authorizations made annually or for some other period prescribed by law, by
virtue of standing legislation, which do not require periodic action by the Congress.
These are automatically and annually included in the National Expenditure Program of
the National Government.
a. Continuing Appropriations
b. Automatic Appropriations
 c. Supplemental Appropriations
d. New General Appropriations
e. None of these options
24. What is not included as responsibility for UACS?
a. Consistency of account classification and coding standards with the Government
Finance Statistics shall be the responsibility of DOF – BTr.
b. The DBM, Department of Finance-Bureau of the Treasury (DOF-BTr), and COA
are collectively responsible for the UACS.
c. Validation and assignment of new codes for a funding source, organization,
subobject codes for expenditure items shall be the responsibility of DBM.
d. Validation and assignment of new Program, Activity, Project Codes shall be
decided jointly by the proponent agency and DBM.
e. None of these options
25. These are funds available for any purpose that Congress may choose to apply, and is
composed of all receipts or revenues that do not otherwise accrue to other funds.
a. Off-budgetary fund
b. Retained fund
c. General Funds
d. Revolving fund
e. Custodial fund
26. This shall be maintained by the Budget Division/ Unit of NGA to monitor the revenue and
other receipts estimated/ budgeted, collected and remitted/deposited.
a. Registry of Revenue and Other Receipts -- Regular Agency and Foreign Assisted
Project Fund (RROR -- RA & FAP)
b. Registry of Revenue and Other Receipts -- Internally Generated Funds (Off-
Budgetary Funds -- Retained Income Funds)/Business Related Funds (RROR-
IGF/BRF)
c. Registry of Revenue and Other Receipts -- Trust Receipts/lnter-Agency
Transferred Funds (RROR-TR/IATF)
d. Registry of Revenue and Other Receipts -Special Account Locally
Funded/Domestic Grants Fund and Special Account Foreign Assisted/Foreign
Grants Fund (RROR -- SADFGF)
e. Registry of Revenue and Other Receipts -- Summary (RRORS)
27. COA Circular No. 2013-002 dated January 30, 2013 prescribing the adoption of the RCA
for National Government Agencies (NGAs) was effective on___
a. January 1, 2018
b. January 1, 2014
c. January 1, 2013
d. January 1, 2016
e. Some other answer
28. The UACS Object Code structure consists of ten (10) mandatory digits include (indicate
the order):I. UACS Sub-Object Code; II. Sub-Major Account Group; III. Major Account
Group; IV. General Ledger Contra Account; V. General Ledger Account; VI. Account
Group
a. VI, III, II, V, I, IV
b. I, V, IV, I, V, IV
c. VI, III, I, IV, II, V
d. III, VI, II, I, V, IV
e. None of these options
29. This is a part, segment, unit or function of a government agency, headed by a manager,
who is accountable for a specified set of activities. Except for some, which derive most
of their income from collection of taxes and fees
a. Cost Center
b. Responsibility Center
c. Responsibility Accounting
d. Revenue Center
e. Investment Center
30. This registry shall be used to record the allotments received, obligations incurred and
disbursements classified under PS.
a. Registry of Budget, Utilization and Disbursements-Personnel Services (RBUD-
PS)
b. Registry of Allotments, Obligations and Disbursements-Personnel Services
(RAODPS)
c. Registry of Appropriation and Allotment (RAPAL)
d. Registry of Allotment and Notice of Transfer of Allocation (RANTA)
e. Registry of Budget, Utilization and Allotment-Personnel Services (RBUA-PS)
31. The Direct Labor as a RCA is classified as__
a. Personnel services
b. Financial expense
c. Maintenance and other operating expenses
d. Non-cash expense
e. None of these options
32. These are additional appropriations authorized by law to augment the original
appropriations which proved to be insufficient for their intended purpose due to
economic, political or social conditions supported by a Certification of Availability of
Funds (CAF) from the BTr
a. Annual appropriation
b. Supplemental Appropriations
c. Continuing appropriation
d. Automatic appropriation
e. None of these options
33. The Government Accounting Manual (GAM) is prescribed by COA pursuant to ___.
a. 1987 Constitution of the Republic of the Philippines and Sec. 109, Presidential
Decree (P.D.) No. 1445)
b. 1987 Constitution of the Republic of the Philippines
c. Sec. 109, Presidential Decree (P.D.) No. 1445)
d. Sec. 110, Presidential Decree (P.D.) No. 1445)
e. None of these options
34. The fund cluster code of Special Account-Foreign Assisted/Foreign Grants Fund is ___.
a. 01
b. 02
c. 03
d. 04
e. 05
35. This shows the overall accounting system of a government agency/unit. It includes the
source documents, the flow of transactions and its accumulation in the books of
accounts and finally their conversion into financial information/data presented in the
financial reports.
a. GAD
b. GAA
c. GAP
d. GAM
e. Some other answer
36. This account is credited for the allocation of cost of watercrafts in accordance with the
prescribed policy on depreciation. This account is debited upon derecognition of the
asset and/or adjustments.
a. Watercrafts
b. Depreciation-Watercrafts
c. Accumulated Impairment Losses-Watercrafts
d. Accumulated Depreciation-Watercrafts
e. None of these options
37. Identify which statement/s is/ are incorrect: I. Funding Source codes consist of 8 digits;
II. Organization codes consist of 12 digits; III. Location codes consist of 10 digits; IV.
MFO/Program, Activity and Project (PAP) codes consist of 9 digits; V. Object Codes for
Assets, Liabilities, Equity, Income and Expense consist of 8 digits
 a. I, II, III
b. I, II, IV
c. III, V
d. III, I
e. None of these options
38. The Manual presents the basic accounting policies and principles in accordance with the
Philippine Public Sector Accounting Standards (PPSAS) adopted thru COA Resolution
_____dated January 24, 2014, and other pertinent laws, rules and regulations.
a. No. 2014-004
b. No. 2014-002
c. No. 2014-001
d. No. 2014-003
e. None of these options
39. This an authorization made by law or other legislative enactment, directing payment of
goods and services out of government fund under specific condition or for special
purpose.
a. Appropriation
b. Allotment
c. Obligation
d. Allocation
e. Budget
40. Provide the order of Budget Cycle: I. Budget Operation; II. Budget Accountability; III.
Budget Preparation; IV. Budget Legislation
a. I, II, III, IV
b. IV, III, II, I
c. IV, II, III, I
d. II, III, IV, I
e. III, IV, I, II
41. Fundamental Principles for Disbursement of Public Funds, Section 4 of P.D. No. 1445,
the Government Auditing Code of the Philippines, provides that all financial transactions
and operations of any government entity shall be governed by the following fundamental
principles, includes: I. No money shall be paid out of any public treasury or depository
except in pursuance of an appropriation law or other specific statutory authority; II.
Government funds or property shall be spent or used solely for public purposes; III. Trust
funds shall be available and may be spent only for the specific purpose for which the
trust was created or the funds received; IV. Fiscal responsibility shall, to the greatest
extent, be shared by all those exercising authority over the financial affairs, transactions,
and operations of the government agency; V. Claims against government funds shall be
supported with complete documentation.
a. I, II, III, IV, V
b. I, II, III, IV
c. I, III
d. II, IV
e. None of these options
42. What statement is incorrect?
a. COA Circular No. 2015-007 dated October 22, 2015, prescribing the Government
Accounting Manual (GAM) for NGAs;
b. COA Circular No. 2014-003 dated April 15, 2014, providing the implementing
rules and guidelines on the Conversion from the Philippine Government Chart of
Accounts under the New Government Accounting System prescribed through
COA Circular No. 2004-008 dated September 20, 2004, as amended, to the RCA
for NGAs;
c. COA Resolution No. 2014-003 dated January 24, 2014, prescribing the adoption
of 24 Philippine Public Sector Accounting Standards (PPSAS);
d. COA-DBM-DOF Joint Circular No. 2014-1 dated November 7, 2014, providing
the enhancement of UACS prescribed under COA-DBM-DOF Joint Circular No.
2013- 1;
e. None of these options
43. These are decreases in economic benefits or service potential during the reporting
period in the form of outflows or consumption of assets or incurrence of liabilities that
result in decreases in net assets/equity, other than those relating to distributions to
owners.
a. Assets
b. Liabilities
c. Equity
d. Income
e. Expenses
44. This refers to the accounting unit of the concerned participating agency responsible in
the consolidation of the billing statement from the Credit Card Company (CCC) and
payment of the said billing agency.
a. Credit Card Company
b. Agency
c. Billing Entity
d. Direct Payment System
45. This refers to the payment procedure whereby the MDS-GSB shall, upon receipt of NCA
an LDDAP-ADA from DBM pay the CCC not earlier than 24 hours but not later than 48
hours, through direct credit to the CCC current account
a. Disbursements
b. Expanded Modified Direct Payment Scheme
c. Modified Disbursement System
d. Purchase Limit
e. None of the options
46. Which of the following is incorrect?
a. Cardholder Monthly Purchase Limit – refers to the limit established by the
Program Administrator and approved by the Steering Committee for the total
value of purchases that a cardholder can make in one month.
b. Cardholder Single Purchase Limit – refers to the maximum amount allowed the
cardholder for each transaction.
c. Maximum Purchase Card Limit – refers to the maximum amount that the
unit/office is authorized to utilize as stated in the Purchase Card application
d. Regular Cash Advance – refers to the amount granted to cashiers, disbursing
officers, paymasters, and/or other accountable officers for the payment of
expenses such as salaries and wages, commutable allowances, honoraria and
other similar payments to officials and employees.
e. None of the choices
47. S1: Notice of Cash Allocation .The NCA shall be the authority of an agency to pay
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. S2: Notice of Transfer of Allocation. The NTA shall be
the authority of the 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.
a. S1 is true
b. S2 is false
c. Both statements are true
d. Both Statements are false
48. Which of the following is not included in the revenue from non-exchange transactions?
a. Tax revenue
b. Fines and penalties
c. Shares, grants and donations
d. Seaport System Fees
e. None of the choices
49. S1: Cash shortage discovered by the Auditor that cannot be satisfactorily explained by
the Collecting Officer shall be forfeited in favor of the government and an official receipt
shall be issued by the Collecting Officer/Cashier. S2: Cash overage which is not
 restituted by the Collecting Officer despite demand in writing by the Auditor shall be
taken up as receivable from the Collecting Officer.
a. S1 is true
b. S2 is false
c. Both statements are true
d. Both Statements are false
50. These are funds available for any purpose that Congress may choose to apply, and is
composed of all receipts or revenues that do not otherwise accrue to other funds.
a. Retained fund
b. General fund
c. Off-budgetary fund
d. Revolving fund
e. Custodian fund

TEST II: True or False

1. Exchange transactions are transactions in which an entity either receives value from
another entity without directly giving approximately equal value in exchange, or gives
value to another entity without directly receiving approximately equal value in exchange.
(Par. 11, PPSAS 9)
2. Market Value is the amount for which an asset could be exchanged, or a liability settled,
between knowledgeable, willing parties in an arm’s length transaction.
3. Pledges are unenforceable undertakings to transfer assets to the recipient entity
4. Gifts, Donations and Goods In-kind are services provided by individuals to public sector
agencies in a non-exchange transaction.
5. Carlos Dominguez III holds the DoF
6. Eduardo M. Año – DoJ
7. Dakila Fonacier – bir
8. Patent are fees paid for the use of entity’s assets such as trademarks, patents, software,
and copyrights
9. The PCF shall be replenished as soon as disbursements reach at least 90% or as
needed.
10. Additional cash advance may be granted to any official or employee even if the previous
cash advance given to him/her for travel is not yet liquidated and accounted for in the
book.
11. The Tax Remittance Advice (TRA) refers to a serially-numbered document prescribed by
the DBM that should be used by the NGAs in the remittance of withheld taxes on funds
coming from DBM.
12. Field/Extension/Satellite Offices are some of the government units under the
central/regional/district offices without complete set of books of accounts. Those offices
may be granted cash advances covering two (2) months requirements for
MOOE/authorized expenses to finance their operations.
13. Commercial Checks are checks issued by NGAs chargeable against the Treasury
14. Cash overage discovered by the Auditor that cannot be satisfactorily explained by the
Disbursing Officer shall be forfeited in favor of the government officer and an official
receipt shall be issued by the Collecting Officer/Cashier
15. Cash Distribution Register (CDReg)shall be maintained to record, monitor and report
transactions involving the grant, utilization and liquidation of the cash advance.
16. No MDS check/ADA shall be issued without the covering NCA.
17. The journal entry to record the receipt on NCA in the book of government agencies
involves a credit to Subsidy income from national government.
18. The responsibility for disaggregation and sub-coding of the following accounts Agency
Responsible for Disaggregation: Personnel Services assigned to DBM; Maintenance and
Other Operating Expenses assigned DBM/COA; Financial Expenses assigned BTr; and
Capital Outlays assigned DBM
19. The head of any agency of the government is immediately and primarily responsible for
all government funds and property pertaining to his agency
20. Each entity of the National Government (NG) maintains a complete set of accounting
books by fund cluster which is reconciled with the records of cash transactions
maintained by the DBM.
21. RANTA This registry shall be maintained by the Budget Division to determine the
amount of allotments not covered by NTA and monitor available NTA
22. The UACS object code of Cash-Collecting Officers is 10101010.
23. In line with No. 22, Sales Revenue 40202160
24. In line with No. 22, Notes Receivable 10301020
25. Expenditures of government funds or uses of government property in violation of law or
regulations shall be a personal liability of the official or employee found to be directly
responsible therefor
26. The journal entry to record the replenishment of petty cash fund includes a debit of
expenses.
27. MDS Check/ ADA can be issued without the covering NCA.
28. The DBM 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
29. As a general rule, code 01 is assigned to a Lower-Level operating unit classified as
Central Office. As an exception, the DOTC-Office of the Secretary (OSEC), which has
three central offices, shall be assigned the following codes: DOTC-OSEC Central Office
– 01, Land Transportation Office - Central Office – 19 and Land Transportation
Franchising and Regulatory Board - Central Office – 20.
30. Impairment Loss-Investments in Joint Venture is non-cash expense.
31. Agency is organizational entities charged with carrying out specific substantive functions
or with directly implementing programs/projects of a department, such as line bureaus
and field units.
32. The assignment of fund codes is based on representations by Agencies concerned that
the creation of funds, i.e., Special Accounts in the General Fund, Trust Receipts,
Revolving Funds, among others, as well as the use/s thereof are authorized by law.
33. The head of any agency of the government is immediately and primarily responsible for
all government funds and property pertaining to his agency. Persons entrusted with the
possession or custody of the funds or property under the agency head shall be
immediately responsible to him, without prejudice to the liability of either party to the
government.
34. Special Account in the General Fund (SAGF) are lump-sum funds included in the GAA
which are not within the approved appropriations of Departments/Agencies/Lower Level
Operating Units, and which are available for allocation to any Department/Agency/Lower
Level Operating Unit or Local Government Unit for a specific purpose, as may be duly
approved in accordance with special provisions on the use of these funds.
35. The Government Accounting Manual aims to update the following: a. standards and
procedures in accounting for government funds and property; b. coding structure and
accounts; and c. accounting books, registries, records, forms, reports and financial
statements. d. , policies and guidelines eliminate all the errors in accounting and
reporting
36. The objectives of special purpose financial statements 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
37. The RCA code of Allowance for Impairment-Food Supplies for Distribution is 10402010.
38. The Commission on Audit (COA) Department of Budget and Management (DBM)
Department of Finance (DOF) on Joint Circular No. 2013-1 dated August 6, 2014,
prescribes the use of UACS, as amended/updated.
39. Modified Accrual basis means a basis of accounting under which transactions and other
events are recognized when they occur (and not only when cash or its equivalent is
received or paid).
40. Government Accounting encompasses the processes of analyzing, recording,
classifying, summarizing and communicating all transactions involving the receipt and
 disposition of government funds and property, and interpreting the results thereof. (Sec.
110, Presidential Decree (P.D.) No. 1445)
41. The following are the fund cluster and their respective UACS code: New General
Appropriations 01 Supplemental Appropriations 02, Continuing Appropriations 03,
Automatic Appropriations 04, Unprogrammed Funds 05, Retained Income/Funds 06,
Revolving Funds 07 and Trust Receipts 08.
42. 20401010, the major account group of this RCA code is Deferred credits.
43. Starting CY 2013 until further amended, however, all appropriations for Personnel
Services (PS),MOOE and CO shall be valid only for two (2) fiscal year.
44. The UACS Object Code (10 digits), which consists of the RCA Code (eight digits) and
the UACS Sub-Object Code (two digits), is used in the recognition of transactions in the
books of accounts and in the generation of financial reports which requires details by
sub-object codes.
45. Revolving Funds are receipts derived from business-type activities of
departments/agencies as authorized by law, and which are deposited in an authorized
government depository bank.
46. Fundamental Principles of Fiscal Operations includes: No money shall be paid out of the
public treasury or depository except in pursuance of an appropriation law or other
specific statutory authority; Government funds or property shall be spent or used solely
for personal purposes; Trust funds shall be available and may be spent only for the
specific purpose for which the trust was created.
47. Michael G. Aguinaldo is the commissioner of the Commission on Audit (COA).
48. GFS coding will generally not be shown to be part of the UACS
49. The Revised Chart of Accounts does not include classification and codes for budgetary
accounts.
50. The first digit of the Funding Source indicates whether the expenditure is sourced inside
or outside the general fund

TEST III: Journal Entry Preparation

Answer Key

TEST I: Multiple Choice Questions TEST II: True or False

1.
2.
3.
4.
5.
6.
7.
8. a
9. c f
10. c f
11. a t
12. t
13. f
14. t
15. t
16. t