CPA REVIEW SCHOOL OF THE PHILIPPINES

Manila

ADVANCED FINANCIAL ACCOUNTING AND REPORTING GERMAN AND VALIX

Government Accounting Manual (GAM)

Numbers 1, 2 and 3

Agency A received an appropriation for the year 2024 based on its General Appropriation Act
(GAA) in the amount of P25,000,000. The following were its allotments:

Personnel services 2,500,000

Maintenance and other operating expenses 5,000,000
Financial expenses 500,000
Capital outlay 10,000,000

The Department of Budget and Management (DBM) issued a Notice of Cash Allocation (NCA)
to Agency A to cover its cash requirement for the given appropriation in the amount of
P12,500,000

1. What is the journal entry of Agency A upon receipt of the Notice of Cash Allocation
from the DBM?

A. Cash-National Treasury 12,500,000

Subsidy Income National Govt. 12,500,000

B. Subsidy Income National Govt. 12,500,000

Cash-MDS, Regular 12,500,000

C. Cash-MDS, Regular 12,500,000

Subsidy Income National Govt. 12,500,000

D. Notice of Cash Allocation, Regular 12,500,000

Subsidy Income National Govt. 12,500,000

2. Assuming Agency A only used P12,000,000 at the end of the fiscal period, what is the
journal entry for the reversion of the unutilized NCA?

A. Cash-National Treasury 500,000

Subsidy Income National Govt. 500,000

B. Subsidy Income National Govt. 500,000

Cash-MDS, Regular 500,000

C. Cash-MDS, Regular 500,000

Subsidy Income National Govt. 500,000

D. Notice of Cash Allocation, Regular 500,000

Subsidy Income National Govt. 500,000

3. Where will Agency A record the receipt of allotments from the DBM?
A. Registry of Allotments and Obligations
B. Registry of Allotments, Obligations and Disbursements
C. Registry of General Release Order
D. Registry of Special Allotment Release Order

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Numbers 4, 5, 6 and 7
Agency B issued a purchase order of an equipment costing P100,000. The equipment was
delivered and it was acquired on account. The withholding tax was 2%. Agency B remitted the
tax withheld to the BIR through Tax Remittance Advice (TRA).

4. The incurrence of the obligation was posted in

A. Obligation Request and Status, RAOD Capital Outlay
B. Obligation Request and Status, RAOD Personnel Services
C. Obligation Request and Status, RAOD Financial Expenses
D. Obligation Request and Status, RAOD Maintenance and Other Operating Expenses

5. What is the journal entry to record the receipt of the office equipment?
A. Office equipment 100,000
Accounts payable 100,000
B. Office equipment 100,000
Due to BIR 2,000
Cash-MDS, Regular 98,000
C. Office equipment 100,000
Due to BIR 2,000
Cash-MDS, Check Disbursement 98,000
D. Office equipment 98,000
Accounts payable 98,000

6. What is the journal entry to record the payment of accounts payable?

A. Accounts payable 100,000
Due to BIR 2,000
Cash-MDS, Check Disbursement 98,000
B. Accounts payable 98,000
Cash-MDS, Regular 98,000
C. Accounts payable 100,000
Cash-MDS, Regular 100,000
D. Accounts payable 100,000
Due to BIR 2,000
Cash-MDS, Regular 98,000

7. What is the journal entry to record the remittance of the tax withheld?
A. Due to BIR 2,000
Subsidy Income National Govt. 2,000
B. Due to BIR 2,000
Cash-Tax Remittance Advice 2,000
C. Due to BIR 2,000
Cash-MDS, Regular 2,000
D. Due to BIR 2,000
Cash-Check Disbursement, Regular 2,000

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Numbers 8, 9 and 10

A petty cash fund was established for Agency C in the amount of P40,000. The following were
the replenished expenses:

Office supplies 14,000

Other maintenance and operating expenses 6,000
Travel expenses 19,000

The unused petty cash fund was returned based on the Official Receipt (ORT)

8. What is the entry to record the establishment of the petty cash fund?
A. Petty cash fund 40,000
Cash-National Treasury-MDS 40,000
B. Petty cash fund 40,000
Cash Collecting Officer 40,000
C. Petty cash fund 40,000
Cash-MDS, Regular 40,000
D. Posting in ORS RAOD-Maintenance and Other Operating Expenses

9. What is the entry to record the replenishment of the petty cash fund?
A. Office supplies 14,000
Other maintenance and operating expenses 6,000
Travel expenses 19,000
Petty cash fund 39,000
B. Office supplies 14,000
Other maintenance and operating expenses 6,000
Travel expenses 19,000
Cash-MDS, Regular 39,000
C. Petty cash fund 39,000
Cash-MDS, Regular 39,000
D. Posting in Disbursement Column RAOD-Maintenance and Other Operating Expenses

10. What is the entry to record the return of the unused petty cash fund?
A. Cash-Collecting Officer 1,000
Petty cash fund 1,000
B. Cash-MDS, Regular 1,000
Petty cash fund 1,000
C. Cash-Collecting Officer 1,000
Cash-Disbursing Officer 1,000
D. Posting in Receipt Column RAOD-Maintenance and Other Operating Expenses

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Numbers 11, 12 and 13

Agency D prepares the following payroll for the month of September 30, 2024:

Salaries and wages 560,000

Personnel Economic Relief and Allowances (PERA) 60,000
Gross Payroll 620,000
Withholding tax (11,000)
GSIS (4,700)
Pag-ibig (4,300)
Philhealth (3,000)
Net payroll 597,000

11. What is the entry to record the liabilities to officers and employees?
A. Salaries and wages, Regular 560,000
Personnel Economic Relief and Allowances (PERA) 60,000
Due to BIR 11,000
Due to GSIS 4,700
Due to Pag-ibig 4,300
Due to Philhealth 3,000
Due to Officers and Employees 597,000
B. Salaries and wages, Regular 560,000
Personnel Economic Relief and Allowances (PERA) 60,000
Due to BIR 11,000
Due to GSIS 4,700
Due to Pag-ibig 4,300
Due to Philhealth 3,000
Accounts payable 597,000
C. Salaries and wages, Regular 597,000
Due to Officers and Employees 597,000
D. Posting in Payable Column RAOD-Personnel Services

12. What is the entry to record the cash advance for the payroll?
A. Cash-Disbursing Officer 597,000
Cash-MDS, Regular 597,000
B. Advances for payroll 597,000
Cash-MDS, Regular 597,000
C. Cash-Disbursing Officer 597,000
Cash-Check Disbursements 597,000
D. Posting in Disbursement Column RAOD-Personnel Services

13. What is the entry to record the liquidation of the payroll?

A. Due to officers and employees 597,000
Advances for payroll 597,000
B. Advances for payroll 597,000
Cash-MDS, Regular 597,000
C. Due to officers and employees 597,000
Cash-MDS, Regular 597,000
D. Posting in Disbursement Column RAOD-Personnel Services

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Numbers 14, 15 and 16

Agency E released cash advances for its head for travel expenses to attend a seminar in the USA
in the amount of P200,000. The cash advance was liquidated and P10,000 was refunded
representing the unused cash advance.

14. What is the journal entry to record the cash advance?

A. Cash-Collecting Officer 200,000
Advances to Officers and Employees 200,000
B. Cash-Treasury Agency Deposit, Regular 200,000
Advances to Officers and Employees 200,000
C. Advances to Officers and Employees 200,000
Cash-MDS, Regular 200,000
D. Advances to Officers and Employees 200,000
Cash-Collecting Officer 200,000

15. What is the journal entry to record the liquidation of the cash advance?
A. Travel expenses - foreign 190,000
Advances to Officers and Employees 190,000
B. Cash-Treasury Agency Deposit, Regular 190,000
Advances to Officers and Employees 190,000
C. Travel expenses - foreign 190,000
Cash-MDS, Regular 190,000
D. Travel expenses - foreign 190,000
Cash-Collecting Officer 190,000

16. What is the journal entry to record the refund of the unused cash advance?
A. Cash-Collecting Officer 10,000
Travel expenses - foreign 10,000
B. Cash-MDS, Regular 10,000
Advances to Officers and Employees 10,000

C. Cash-Treasury Agency Deposit, Regular 10,000

Travel expenses - foreign 10,000

D. Cash-Collecting Officer 10,000

Advances to Officers and Employees 10,000

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Numbers 17 and 18
On March 1, 2024, Agency F received a 60-day 10% interest bearing note, P24,000 from Entity
Z for some accounting manuals sold. On April 30, 2024, Entity Z settled the note.

17. What is the journal entry on March 1, 2024?

A. Notes receivable 24,000
Sales revenue 24,000
B. Cash-MDS, Regular 24,000
Sales revenue 24,000
C. Cash-Treasury Agency Deposit, Regular 24,000
Sales revenue 24,000
D. Cash-Collecting Officer 24,000
Sales revenue 24,000

18. What is the journal entry on April 30, 2024?

A. Cash-Collecting Officer 24,400
Sales revenue 24,400
B. Cash-Collecting Officer 24,400
Notes receivable 24,000
Interest income 400
C. Cash-Collecting Officer 24,000
Notes receivable 24,000
D. Cash-Collecting Officer 24,400
Sales revenue 24,000
Interest income 400

Numbers 19, 20 and 21

On April 1, 2024, the Bureau of Treasury received a credit advice amounting to $100,000 from
the BSP for a loan from the World Bank for the rehabilitation of roads in certain provinces
affected by the typhoon. The due date of the loan will be on March 31, 2025. The relevant
exchange rates were as follows: April 1, 2024: P51.00; December 31, 2024: P52.00; March 31,
2025: P50.50

19. What is the journal entry on April 1, 2024?

A. Cash in bank-Local currency 5,100,000
Loan payable-Local currency 5,100,000
B. Cash in bank-Foreign currency 5,100,000
Loan payable-Local currency 5,100,000
C. Cash in bank-Local currency 5,100,000
Loan payable-Foreign currency 5,100,000
D. Cash in bank-Foreign currency 5,100,000
Loan payable-Foreign currency 5,100,000

20. What is the journal entry on December 31, 2024?

A. Loss on foreign exchange 100,000
Loan payable-Foreign currency 100,000
B. Loss on foreign exchange 100,000
Loan payable-Local currency 100,000
C. Loan payable-Foreign currency 100,000
Gain on foreign exchange 100,000
D. Loan payable-Local currency 100,000
Gain on foreign exchange 100,000

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21. What is the journal entry on the settlement date?
A. Loan payable-Foreign currency 5,050,000
Cash in bank-Foreign currency 5,050,000
B. Loan payable-Foreign currency 5,200,000
Cash in bank-Foreign currency 5,050,000
Gain on foreign exchange 150,000
C. Loan payable-Foreign currency 5,050,000
Cash in bank-Local currency 5,050,000
D. Loan payable-Foreign currency 4,900,000
Loss on foreign exchange 150,000
Cash in bank-Foreign currency 5,050,000

Numbers 22 and 23

On February 1, 2024, the Department of Environment and Natural Resources (DENR)

transferred P450,000 fund to Department of Public Works and Highway (DPWH) for the
construction of DENR’s irrigation project. The P450,000 fund was then remitted by DPWH to
Bureau of Treasury on May 1, 2024. The project was completed and turned over by DPWH to
DENR on October 31, 2024.

22. What is the journal entry in DENR’s book to record the transfer of funds on February
1, 2024?
A. Debit Due from DPWH P450,000 and Credit Cash, MDS, Regular P450,000.
B. Debit Cash-Treasury/Agency Deposit/Trust P450,000 and Credit Cash-Collecting
Officers P450,000.
C. Debit Cash Collecting Officers P450,000 and Credit Due to DENR P450,000
D. Debit Cash-Treasury/Agency Deposit/Trust P450,000 and Credit Cash-Collecting
Officers P450,000.

23. Using the same data, what is the journal entry of DPWH to record the turnover of the
irrigation project to DENR on October 31, 2024?
A. Debit Due to DENR P450,000 and Credit PPE Account P450,000
B. Debit PPE Account P450,000 and Credit Due from DPWH P450,000.
C. Debit Due to DENR P450,000 and Credit Cash-Collecting Officer P450,000
D. Debit Cash Collecting Officer P450,000 and Credit Due from DPWH P450,000.

24. The Government Accounting Manual (GAM) took effect on

A. January 1, 2015
B. January 1, 2016
C. January 1, 2017
D. January 1, 2018

25. It encompasses the process of analyzing, recording, classifying, summarizing and

communicating all transactions involving the receipt and disposition of government funds
and property, and interpreting the results thereof.
A. Government Accounting
B. Government Budget
C. Government Funds
D. Government Accounts

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26. The coverage of the Government Accounting Manual include/s

A. basic accounting policies and principles in accordance with the Philippine Public Sector
Accounting Standards (PPSAS) adopted through COA Resolution No. 2014-003
B. Revised Chart of Accounts (RCA) prescribed under COA Circular No. 2013-002
C. the accounting procedures, books, registries, records, forms, reports, and financial
statements, and illustrative accounting entries
D. All of the above

27. It is the financial plan of the government for a given period, usually for a fiscal year, which
shows what resources are, and how they will be generated and used over the fiscal period.
A. Government Accounting
B. Government Budget
C. Government Funds
D. Government Accounts

28. It provides access to cost and revenue information under the supervision of a manager having
a direct responsibility for its performance. It is also a system that measures the plans (by
budgets) and actions (by actual results) of each responsibility center.
A. Responsibility Center
B. Responsibility Budget
C. Responsibility Accounting
D. Responsibility Agency

29. The objective of Responsibility Accounting is/are to

A. ensure that all costs and revenues are properly charged/credited to the correct
responsibility center so that deviations from the budget can be readily attributed to
managers accountable therefore
B. provide a basis for making decisions for future operations
C. facilitate review activities, monitoring the performance of each responsibility center and
evaluation of the effectiveness of agency’s operations
D. all of the above

30. When shall services of the Government Agency be recognized as revenue?

A. when the services are rendered
B. if not practicable, when fees are collected upon issuance of the respective permits,
certificates of registration plates, stickers, clearance, certification, franchises, and licenses
C. Both A and B
D. Neither A nor B

31. The following are included in the complete set of General Purpose Financial Statements,
except
A. Statement of Financial Position
B. Regular Agency Books
C. Statement of Comparison of Budget and Actual Amounts
D. Statement of Cash Flows

32. The following are the different fund clusters except

A. Regular Agency Fund
B. Foreign Assisted Projects Fund
C. Trust Receipts
D. Externally Generated Funds

-END-
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