100 wer 5 PROBLEMS PROBLEM 3-1: TRUE OR FALSE 1, Technically, only the Journals and Ledgers are conside accounting records; the Registries are budget records, red Separate accounting records and budget registries are maintained for each fund cluster. . Government entities and business entities use the term “obligation” or the phrase “incurrence of obligation” similarly 4, The various registries maintained by government entities primarily serve as internal control for controlling and monitoring the conformance of actual results with the approved budget. 5, A check disbursement is normally recorded as a credit to the “Cash-Modified Disbursement System (MDS), Regular” account, 6. Both the ORS and RAOD are updated each time an obligation is incurred, a payable is recorded for the obligation incurred, and disbursements are made to settle the recorded payables. 7. At the end of each year, an adjustment is made to revert any unused NCA of a government entity. 8. The GAM for NGAs requires the Collecting Officer to issue an official receipt to acknowledge the receipt of the Notice of Cash Allocation. . 9. The entry to record the reversion of unused NCA at the end of the period is the exact opposite of the entry used to record the Teceipt of NCA.The Government Accounting Process 101 10. 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. PROBLEM 3-2: MULTIPLE CHOICE 1. The various registries maintained by government entities are considered, technically, as a. Books of accounts c. General Ledgers b. Budget records d, Log books 2. Which of the following is recorded in the Obligation Request and Status (ORS)? a. Receipt of notice of appropriation b. Receipt of allotment from the DBM c. Receipt of Notice of Cash Allocation from the DBM d. Entering into employment contracts with employees 3. This type of expenditure pertains to all types of employee benefits. a. Personnel Services (PS) b. Maintenance and Other Operating Expenses (MOOE) c. Financial Expenses (FE) d. Capital Outlays (CO) 4. Entity A, a government entity, made disbursements for the travelling expenses of its personnel. These expenditures are most likely classified as a. Personnel Services (PS) b. Maintenance and Other Operating Expenses (MOOE) _,¢. Financial Expenses (FE) d. Capital Outlays (CO) 5. Which of the following is charged with the responsibility of keeping the general accounts, and related documents, of the Government?2 ___ Chapter j ~ 10. a. COA c. NGAs b. BTr d, DBM A journal entry with a credit to the “Cash-Modified Disbursement System (MDS), Regular” account will most likely be recorded in the a. General Journal c, Cash Disbursements Journal b. Special Journal d. Check Disbursements Journal . Which of the following accounts is debited when a goverment entity remits its collections to the National Treasury? a, Cash-Tax Remittance Advice b. Cash-Modified Disbursement System (MDS), Regular c. Cash-Treasury/Agency Deposit, Regular d. Cash- Collecting Officers . Which of the following accounts is credited when a government entity remits taxes withheld to the BIR? a. Cash-Tax Remittance Advice b. Cash-Modified Disbursement System (MDS), Regular c. Cash-Treasury/Agency Deposit, Regular d. Cash - Collecting Officers . Which of the following accounts is credited when a government entity remits contributions to the GSIS, PhilHealth and Pag-IBIG? a. Cash-Tax Remittance Advice b. Cash-Modified Disbursement’System (MDS), Regular c. Cash-Treasury/Agency Deposit, Regular d, Cash- Collecting Officers 4 Obligations recorded in the registries but not yet in the accounting books are referred to as a. Not Yet Due and Demandable. b. Contingent liabilities c. Erroneous recording d. Unpaid obligations| rhe Government Accounting Process a i: 103 PROBLEM 3-3; MULTIPLE CHOICE 1, The receipt of an allotment is recorded by a government entity in the a. RAOD c. RAPAL b. ORS d.aande rp The incurrence of an obligation for future delivery or performance by the obligee is recorded by a government entity in the a. RAOD c. RAPAL b. ORS d.aandb 3. The receipt of an appropriation is recorded by a government entity in the a. RAOD c. RAPAL b. ORS d.aandb 4. The entry to record the receipt of Notice of Cash Allocation (NCA) by a government entity is: a. (Debit) Cash-Modified Disbursement System (MDS), Regular; (Credit) Accumulated ‘Surplus (Deficit) b. (Debit) Cash-Modified Disbursement System (MDS), Regular; (Credit) Subsidy from National Government c. (Debit) Cash-Collecting Officer; (Credit) Subsidy from National Government d. No journal entry. The event is recorded only in the Registries. According to the Revised Chart of Accounts (RCA).issued by the COA, the “Subsidy from National Government” account is a(an) a. Asset account c, Revenue account b. Liability account d, Equity account . Which of the following is not one of the necessary closing entries of a government entity?_ a. Closing of the "Cash-Treasury/Agency Deposit, Regular’ account to the “Accumulated Surplus/(Deficit)” account. b. Closing of the “Subsidy from National Government” account to the “Revenue and Expense Summary” account, c. Closing of income and expense accounts to the “Revenue and Expense Summary” account. d. Closing of the net balance of “Revenue and Expense Summary” account to the “Subsidy from National Government” account. A government entity pays an accounts payable, The entry to record the payment will most likely include a- debit to the “Cash-Modified Disbursement System (MDS), Regular” account. b. credit to the “Due to BIR’ account. c. credit to the “Cash-Treasury/Agency Deposit, Regular” account. d. None of these. The event is recorded only in the Registries and the Obligation Request and Status. a 3. In accordance with the GAM for NGAs and the Revised Chart of Accounts, how does a government entity recognize the uncollectability of accounts receivable?. * a. By debiting the “Bad Debts Expense” account. b. -By debiting the “Impairment Loss-Loans and Receivables’ account. c. By debiting the “Allowance for Impairment-Accounts Receivable” account. d. bande . The “Subsidy from National Government” account is credited when recording a a. receipt of NCA b. reversion of unused NCA . constructive remittance of customs duties or taxes withheld through TRA105 ne Government Accounting Pri d. aandc 0. Expenditures to acquire long-term assets are most likely classified as a. Personnel Services (PS) b. Maintenance and Other Operating Expenses (MOOE) ¢. Financial Expenses (FE) d. Capital Outlays (CO) ROBLEM 3-4: MULTIPLE CHOICE _ This is used to recognize the constructive remittance of taxes withheld to the BIR or customs duties withheld to the BOC. a. Tax Remittance Advice (TRA) b. Notice of Tax Allocation (NTA) c. Tax and Customs Remittance Advice (TCRA) d, Notice of Tax Remittance Advisory (NTRA) Which of the following does not affect the amount of surplus or deficit that is reported in the statement of financial performance? : a. receipt of NCA b. constructive remittance of taxes withheld through TRA c. closing of the “Cash-Treasury/Agency Deposit, Regular” account 2 d. adjustment of the “Cash-Modified Disbursement System (MDS), Regular” account for the unused Notice of Cash Allocation. e. All of these affect surplus or deficit. Entity A received Notice of Cash Allocation (NCA) amounting to 625,000 for the year. Unused NCA at the end of the period amounted to 6,000. Entity A remitted taxes withheld to the BIR amounting to 48,000 through Tax Remittance Advice (TRA). How much is the “Net Financial Assistance/Subsidy” to be reported in Entity A’s statement of financial performance?4 106 _ ae a, 667,000 ¢, 571,000 b. 619,000 dO 4. Entity A, a government entity, had the following transaction, during the period: «Received Notice of Cash Allocation (NCA) amounting to 750,000. « Eared total revenue of 290,000 from billings and collections of unbilled income, Incurred total expenses of ®885,000. e Remitted total taxes withheld of 140,000 to the BIR through Tax Remittance Advice (TRA). + The “Cash-Modified Disbursement System (MDS), Regular” has an unused balance of 43,000 at the end of the period. How much is the surplus (deficit) for the period? a. (595,000) c. 252,000 b. 155,000 112,000 5, The trial balances of Entity A, a government entity, show the following amounts: ¢ Unadjusted Trial Balance - 2,753,000 « Adjusted Trial Balance - 2,765,000 Statement of Financial Position (Debit Column) - P1,880,000 ¢ Statement of Financial Performance (Credit) - ®1,137,000 How much is the surplus (deficit) for the period? a. 252,000 . (252,000) b. 885,000 d. (743,000) . 6. Which of the following expenditures is not shown in the statement of financial performance a. Personnel Services (PS) b. Maintenance and Other Operating Expenses (MOOE) ¢. Capital Outlays (CO)Government Accounting Process 107 d. Financial Expenses (FE) e. All of these expenditures are shown in the statement of financial performance. _ The entries to record the constructive remittance of taxes withheld through Tax Remittance’ Advice include all of the following except a. A debit to the “Cash-Tax Remittance Advice” account b. Acredit to the “Cash-Tax Remittance Advice” account c. A debit to the “Subsidy from National Government” account d. A debit to the “Due to BIR” account e. Allof these are included. . The receipt of Notice of Cash Allocation is recorded in the a. Books of accounts (Journal and Ledger) b. Registry of Allotments and Notice of Cash Allocation (RANCA) c. aandb d. None of these . Which of the following is not one of the special journals prescribed by the GAM for NGAs? a. Sales Journal b. Cash Disbyrsements Journal c. Check Disbursements Journal d, Cash Receipts Journal The 8-digit Revised Chart of Accounts (RCA) Code for expenses starts with number a1 a5 b. 2 d. None of theseROBLEM 3-6: BASIC RECORDING DRILLS struction: Provide the journal entry to record each of the ndependent transactions or events below. If no journal entry is eeded, state the registry or other document where the transaction r event is recorded. . Receipt of ®1,000,000 NCA. . Remittance to the BIR of #100,000 taxes withheld. . Receipt of #1,000,000 Allotment . Receipt of #1,200,000 Appropriation Entering into a purchase contract for future delivery. The contract price is 500,000. Entering into employment contracts worth 200,000. Billing of ®250,000 revenue for Affiliation Fees, subsequent collection of #200,000 therefrom, and full remittance of the collection to the BTr. Reversion of #50,000 unused NCA. Receipt of office equipment purchased on account for 100,000. . Payment of accounts payable from purchase of office supplies worth 60,000. Tax withheld amount to ®3,000.