QUIZ

1. It is a report that is prepared for the purpose of bringing the balances of cash per records and per
bank statement into agreement.
a. bank reconciliation statement
b. bank statement
c. bank balance report
d. all of these

2. If the unadjusted balance of cash per bank statement is greater than the adjusted balance and
there no other reconciling items or errors, the difference would most certainly be caused by a
a. Credit memo c. Deposits in transit
b. Debit memo d. Outstanding checks

3. Which of the following does not qualify as cash equivalent for a government entity?
a. Money market placement with an original term of 1 year but matureswithin 3 months after
the reporting date.
b. Money market placement with an original term of 3 months.
c. Temporary investments in stocks that are expected to be sold within 1 month after the
reporting date.
d. All of these qualify as cash equivalents.

4. Entity A estimates a risk of loss on a recognized asset at 20%. However, Entity A can only accept
a risk of 5%. Entity A then enters into a forward contract to offset the excess risk of 15%. This
process is best described as
a. Risk management
b. Forward hedging
c. Hedge accounting
d. Process risk hedge

5. Which of the following may not be included as part of cash in the note disclosures?
a. Post-dated checks drawn
b. Unreplenished petty cash fund consisting of only the coins and currencies held as at the
reporting date
c. Issued checks that were cancelled because they became stale
d. Treasury bills acquired 3 months before maturity date

6. The entry to record a disbursement from the petty cash fund is

a. Expense accounts xxx
Cash-Modified Disbursement System
(MDS), Regular xxx
b. Expense accounts xxx
Petty Cash xxx
c. Expense accounts xxx
Cash-Collecting Officers xxx
 d. Expense accounts xxx
Cash-Treasury/Agency Deposit, Regular xxx
e. None of these.

7. According to the GAM for NGAs, government entities shall prepare bank reconciliations
a. on a daily basis
b. on a monthly basis
c. only at year-end
d. only as needed

8. Which of the following statements is incorrect regarding the accounting for unreleased checks by
a government entity?
a. Unreleased checks are reverted back to cash.
b. Unreleased checks are physically cancelled.
c. The accounting procedures for unreleased checks prescribed under the GAM for NGAs
apply only to commercial checks.
d. At the start of the year, a reversing entry is made for the unreleased checks in the previous
year.

9. All of the following may cause the cancellation of a check drawn by a government entity except
a. The check becomes stale.
b. Wrong spelling or unnecessary markings on the check.
c. The check is dishonored.
d. The check is prepared using a pen with red ink.

10. It is a hedge of the exposure to changes in fair value of a recognized asset or liability or an
unrecognized firm commitment, or an identified portion of such an asset, liability or firm
commitment, that is attributable to a particular risk and could affect surplus or deficit.
a. Fair value hedge
b. Hedge of a recognized asset or liability
c. Cash flow hedge
d. Hedge of a net investment in a foreign operation
11. For government entities, inventories are assets (choose the incorrect one)
a. Held for sale, consumption, distribution, or exchange.
b. In the process of production for sale, consumption, distribution or exchange.
c. In the form of materials or supplies to be consumed in the production process or in the
rendering of services.
d. Used in the production of goods.

12. Entity A, a government entity, purchases office supplies. Entity A would most likely record the
purchase
a. by debiting the Purchases account
b. as Inventory Held for Consumption
c. as Inventory Held for Distribution
d. by debiting the Office Supplies Expense account
13. Who owns the goods in transit under FOB shipping point?
a. buyer
b. seller
c. either a or b
d. none

14. Which of the following documents is prepared when issuing semi-expendable property to end-
users?
a. Requisition and Issue Slip (RIS)
b. Inventory Custodian Slip
c. Supplies Ledger Card (SLC)
d. Waste Materials Report

15. The carrying amount of inventory is not recognized as expense in this type of event or
transaction.
a. The inventory is sold.
b. The inventory is used in the production of another asset.
c. The inventory is consumed by end users in providing service.
d. The inventory is written-off.

16. Which of the following is subsequently measured at the lower of cost and current replacement
cost?
a. Inventories held for sale
b. Inventories held for distribution
c. Inventories that are undergoing manufacturing process for completion as finished goods for
sale.
d. None of these.

17. The supply or property office of a government entity uses this to record and monitor the
movements and balances of inventories.
a. Stock Card
b. Inventory Listing
c. Stock Ledger Card
d. Registry of Inventory

18. The following information is available from Entity A’s (a government entity) accounting records:
Purchases ............................................ ₱530,000
Purchase discounts ................................... 10,000
Beginning inventory .................................. 160,000
Ending inventory ..................................... 215,000
Freight-out .......................................... 40,000

Entity A’s cost of sales is

a. 465,000
 b. 475,000
c. 505,000
d. 585,000

19. Entity A, a government entity and a manufacturer of military equipment, had inventories at the
beginning and end of its current year as follows:
Beginning End
Raw materials 11,000 15,000
Work in
20,000 24,000
process
Finished goods 12,500 9,000

During the year, the following costs and expenses were incurred:

Raw materials purchased 150,000

Direct labor cost 60,000
Indirect factory labor 30,000
Taxes and depreciation on factory building 10,000
Taxes and depreciation on sales room and office 7,500
Sales salaries 20,000
Office salaries 12,000
Utilities (60% applicable to factory, 20% to sales room, and 20% to office) 25,000

Entity A's cost of sales for the year is

a. 257,000
b. 260,500
c. 261,000
d. 269,500

20. Entity A, a government entity, is a wholesaler of Product A, a non-unique good. The activity for
Product A during July is shown below:
Balance/
Date Transaction Units Cost
July Inventory 2,000 ₱36.00
1
7 Purchase 3,000 37.00
12 Sales 3,600
21 Purchase 5,000 37.88
22 Sales 3,800
29 Purchase 1,600 38.11

How much is the ending inventory on July 31?

a. 153,400
b. 156,912
 c. 158,736
d. Answer cannot be determined due to insufficient information

II. Construct the Summary of Measurements for Financial Assets (16 pts.)

“Let us therefore come boldly to the throne of grace, that we may obtain mercy and find grace in time of
need.”
(Hebrews 4:16)

- END –