NAME: DATE:

SECTION: SCORE:

FINAL TERM LONG EXAM # 2: OVERVIEW OF GOVERNMENT ACCOUNTING AND THE GOVERNMENT
BUDGETING PROCESS

GENERAL DIRECTIONS: Use black permanent ink pen in writing your final answers in the answer sheet.
Erasure and/or superimposition of any kind is strictly not allowed. Doing such shall automatically render
your answers INCORRECT. If you have any query or clarification as to anything about the examination,
kindly approach the facilitators. DO NOT CHEAT. GOD IS WATCHING YOU.

THEORETICAL

1. Statement 1: Compared to the accounting of government entities, business accounting places greater
emphasis on the Sources and utilization of government fund and responsibility, accountability and
liability of entities entrusted with government funds and properties.
Statement 2: Fiscal responsibility shall, to the greatest extent, be assumed solely by the head of the
government agency.
a. Only Statement 1 is true
b. Only Statement 2 is true
c. Both statements are true
d. Both statements are false

2. Statement 1: 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
Statement 2: 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.
a. Only Statement 1 is true
b. Only Statement 2 is true
c. Both statements are true
d. Both statements are false

3. Statement 1: Government budgeting pertains to the allocation of public funds to attain the economic
and social goals of the country.
Statement 2: National Government Agencies (NGAs) prepares the national budget, which serves as
the basis of the GAA.
a. Only Statement 1 is true
b. Only Statement 2 is true
c. Both statements are true
d. Both statements are false

4. Statement 1: The submission of the National Expenditure Program (NEP) and Budget of Expenditures
and Sources of Financing (BESF) to the Congress by the President of the Philippines, through the
assistance of the DBM, is under the Budget Legislation.
Statement 2: Notice of Cash Allocation is an authorization issued by the DBM to government agencies
to withdraw cash from National Treasury through the issuance of Modified Disbursement System
checks or other authorized mode of disbursements.
a. Only Statement 1 is true
b. Only Statement 2 is true
c. Both statements are true
d. Both statements are false

5. Statement 1: Allotment is the legislative authorization to make payments out of government funds
under specified conditions and specific purposes.
Statement 2: Appropriation is the authorization from the DBM to an agency to incur an obligation up
to a specified amount that must be within the legislative appropriation.
a. On
b. ly Statement 1 is true
c. Only Statement 2 is true
d. Both statements are true
e. Both statements are false

amsl, cpa, mba Advanced Financial Accounting and Reporting Page 1 | 5

 6. Statement 1: The president’s budget explains the policy framework and priorities in the budget.
Statement 2: The budget preparation phase ends with the submission of the proposed national
budget –the “President’s Budget” to the senate.
a. Only Statement 1 is true
b. Only Statement 2 is true
c. Both statements are true
d. Both statements are false

7. Statement 1: The Philippine government has incorporated the provisions of Philippine Public Sector
Accounting Standards (PPSAS) to the GAM for NGAs.
Statement 2: The PPSAS are based on International Public Sector Accounting Standards (IPSAS) which
are in turn based on International Financial and Reporting Standards (IFRS)/ Philippine Financial and
Reporting Standards (PFRS).
a. Only Statement 1 is true
b. Only Statement 2 is true
c. Both statements are true
d. Both statements are false

8. Statement 1: When the GAA is not enacted before the fiscal year starts, the previous year’s GAA is
automatically reenacted.
Statement 2: The House of Representatives prepares the General Appropriations Bill (GAB) after
scrutinizing the various agencies’ respective proposed programs and expenditures.
a. Only Statement 1 is true
b. Only Statement 2 is true
c. Both statements are true
d. Both statements are false

9. Statement 1: As soon as the GAA is enacted, the government can implement its priority programs
and project.
Statement 2: The President shall have the power to veto any particular item or items in an
appropriation, but the veto shall not affect the item or items to which he does not object.
a. Only Statement 1 is true
b. Only Statement 2 is true
c. Both statements are true
d. Both statements are false

10. Statement 1: Government resources must be utilized efficiently and effectively in accordance with
the GAM for NGAs.
Statement 2: Each agency (entity) shall maintain accounting books and budget registries which are
reconciled with the cash records of the BTr and the budget records of the COA and DBM.
a. Only Statement 1 is true
b. Only Statement 2 is true
c. Both statements are true
d. Both statements are false

11. What is the title of the revised government accounting system for national government agencies
which will be effective starting January 1, 2016?
a. Government Accounting Manual (GAM)
b. New Government Accounting System (NGAS)
c. Philippine Government Accounting System (PGAS)
d. National Government Accounting Manual (NGAM)

12. The National Government Agencies (NGAs) are responsible for

a. Promulgating accounting and auditing rules and regulations.
b. Implementing the national budget with the goal of attaining the nation’s socio-economic
objectives.
c. Receiving and keeping national funds and managing and controlling the disbursements
thereof.
d. Directly implementing the projects of, and performing the functions delegated by, the
government.

13. Under Article IX-D Section 2 of the 1987 Constitution of the Republic of the Philippines, it shall have
the exclusive authority, subject to the limitations in this Article, to define the scope of its audit and
examination, establish the techniques and methods required therefore, and promulgate accounting
amsl, cpa, mba Advanced Financial Accounting and Reporting Page 2 | 5
 and auditing rules and regulations, including those for the prevention and disallowance of irregular,
unnecessary, excessive, extravagant, or unconscionable expenditures, or uses of government funds
and properties. It shall also be responsible to 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.
a. Commission on Audit
b. Civil Service Commission
c. Commission on Election
d. Commission on Human Rights

14. It 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.
a. Government auditing
b. Government reporting
c. Government accounting
d. Government analyzing

15. It refers to the financial plan of a government for a given period, usually for a fiscal year, which shows
what its resources are, and how they will be generated and used over the fiscal period.
a. Government budget
b. Government financial position
c. Government financial statements
d. Government financial performance

16. It refers to the first step in the government budgetary process wherein the President, through the
assistance of the Department of Budget and Management, shall prepare and submit to the Congress
within 30 days from the opening of regular session of Congress a budget of expenditures and sources
of financing, including receipts from existing and proposed revenue measures.
a. Budget Preparation
b. Budget Legislation or Authorization
c. Budget Execution
d. Budget Accountability

17. It refers to the second step in the government budgetary process which involves the enactment by
the Congress of the General Appropriation Act (GAA) based on the budget submitted by the President
which cannot be increased by the Congress. The initiative for the enactment of the appropriation law
shall come from the House of Representatives.
a. Budget Preparation
b. Budget Legislation or Authorization
c. Budget Execution
d. Budget Accountability

18. Additional appropriation authorized by law to augment the original appropriations which proved to
be inadequate or insufficient for the particular purpose intended due to current economic, political
or social conditions.
a. General Appropriation
b. Unprogrammed Appropriation
c. Supplemental Appropriation
d. Automatic Appropriation

19. Arrange the following steps according to the sequence that they appear in the budget cycle.
I. Allotment
II. Disbursement Authority
III. Disbursement
IV. Appropriation
V. Incurrence of obligation
a. IV, I, II, V and III
b. IV, I V, III and II
c. IV, I, V, II and III
d. IV, V, I, II and III

amsl, cpa, mba Advanced Financial Accounting and Reporting Page 3 | 5

 20. What is the correct sequence of the following steps in the budget process?
I. Budget Legislation
II. Budget Accountability
III. Budget Preparation
IV. Budget Execution
a. II, III, I and IV
b. III, I, IV and II
c. III, I, II and IV
d. III, IV, I and II

COMPUTATIONAL

The following account balances were taken from the books of a government agency: Salaries & Wages –
Regular, P7,950,000; PERA, P300,000; Other Supplies & Materials Expense, P412,500; Water Expenses,
P45,000; Electricity Expenses, P75,000; Telephone Expenses, P22,500; Travelling Expenses, P127,500;
Representation Allowance & Transportation Allowance (RATA), P225,000; Depreciation Expenses,
P150,000; Subsidy from National Government, P10,750,000; Interest Income, P7,500; Interest Expense,
P12,000; Bank Charges, P2,250; Retirement & Life Insurance Premiums, P795,000; PAG-IBIG
Contributions, P100,000; PHILHEALTH Contributions, P79,500; Employees Compensation Insurance
Premiums, P50,000.

21. How much is the total amount of expenses under Personnel Services (PS)? 9,499,500

The following are the selected transactions of a national government agency for the month of March
2020:

Total allotment for MOOE 10,000,000

Total NCA for MOOE 7,500,000
Total obligation for MOOE 8,000,000
Total obligation liquidated (disbursement) for MOOE 7,000,000

22. What is the total amount of unobligated allotment for MOOE? 2,000,000
23. What is the total amount of unliquidated obligation for MOOE? 1,000,000

The following account balances were taken from the books of a government agency: Salaries & Wages –
Regular, P7,950,000; PERA, P300,000; Other Supplies & Materials Expense, P412,500; Water Expenses,
P45,000; Electricity Expenses, P75,000; Telephone Expenses, P22,500; Travelling Expenses, P127,500;
Representation Allowance & Transportation Allowance (RATA), P225,000; Representation Expenses,
P150,000; Subsidy from National Government, P10,750,000; Interest Income, P7,500; Interest Expense,
P12,000; Bank Charges, P2,250; Retirement & Life Insurance Premiums, P795,000; PAG-IBIG
Contributions, P100,000; PHILHEALTH Contributions, P79,500; Employees Compensation Insurance
Premiums, P50,000.

24. How much is the total amount of expenses under MOOE? 832,500

The approved budget of a government agency consists of the following:

Appropriation for annual incurring obligations:

Basic Salary 60,356,000
Personal Economic Relief Allowance 2,472,000
Legal Services 6,500,000
Information and Communications Technology Equipment 2,825,000
Quarters Allowance 618,000
Overtime and Night Pay 422,000
Fidelity Bond Premiums 272,000
Telephone Expenses 259,000
Semi-Expendable Machinery and Equipment Expenses 346,000

Appropriation for multi-year construction projects:

Road Networks 26,359,000

Appropriation which is made automatically available and does not require periodic action of the legislative
body:
Retirement and Life Insurance Premiums 7,243,000

amsl, cpa, mba Advanced Financial Accounting and Reporting Page 4 | 5

 25. How much is the total capital outlay from all appropriations?29,184,000
26. How much is the total personnel services from all appropriations? 71,111,000
27. How much is the new general appropriation? 74,070,000
28. How much is the automatic appropriation? 7,243,000
29. How much is the supplemental appropriation? 0

The allocation of P1,500,000 funds to support Entity A's (a government entity) activities for the upcoming
fiscal year has been approved by the President of the Philippines. At the start of the first quarter, the
Department of Budget and Management (DBM) issued an authorization document to Entity A to incur
obligations for a maximum amount of P450,000 in that quarter. Entity A, the central office, extends half
of that authorization to its regional district offices. During the quarter, Entity A receives monthly
authorization to disburse funds not to exceed P150,000 per month. Entity A transfers half of those
monthly authorizations to its regional district offices. At the end of the quarter, total obligations incurred
amounted to P400,000 while total disbursements amounted to P350,000.

30. If the RDOs of Entity A have fully utilized all of the transferred disbursement authority, how much is
the unpaid obligation of the regional district offices for the first quarter? 50,000
31. How much is the unused NCA of Entity A for the first quarter? 100,000
32. How much is the total amount of Notice of Transfer Allocation of transferred by Entity A to regional
district offices for the first quarter? 225,000
33. How much is the unobligated allotment of Entity A for the first quarter? 50,000

Bonus Question (2 points). Give your best joke for this term :D

Your answer: __________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

NAME: DATE:
SECTION: SCORE:

Theoretical Computational
1 ________ 21 ____________
2 ________ 22 ____________
3 ________ 23 ____________
4 ________ 24 ____________
5 ________ 25 ____________
6 ________ 26 ____________
7 ________ 27 ____________
8 ________ 28 ____________
9 ________ 29 ____________
10 ________ 30 ____________
11 ________ 31 ____________
12 ________ 32 ____________
13 ________ 33 ____________
14 ________
15 ________
16 ________
17 ________
18 ________
19 ________
20 ________

amsl, cpa, mba Advanced Financial Accounting and Reporting Page 5 | 5