Ateneo De Naga University / College of Business and Accountancy / FINALS

Government Accounting

Multiple Choice

INSTRUCTIONS:
-Read carefully the questions
- Answer the questions with the best answer
- Write your answer on the answer sheet provided

Multiple Choice / Problem Solving

1. The following are the major expenses incurred by the city of Naga in the execution of the program/ project
considered indispensable to its operations except:
a. Capital Outlay
b. Finance Cost
c. Maintenance and Other Operating Expenses
d. Personnel Services

2. Statement 1. PSALM is a wholly-owned and controlled government entity, a secured, quality-oriented

government corporation, composed of highly professional and socially responsible human resources,
dedicated to upholding the corporation’s vision and mission.
Statement 2. PSALM has less than 1 in current ratio.
a. Statement 1 is true
b. Statement 2 is true
c. Both Statements are true
d. Both Statements are false

3. The Record of Appropriation and Obligations (RAO) for barangays shall show the annual and
supplemental appropriations and obligations charged. Separate RAO shall be maintained for the
following except
а. Continuing appropriations
b. Sangguniang kabataan Fund
C. Gender and Development Fund
D. Local Disaster Risk Reduction Management Fund (LDRRMF)

4 . Which of the following is NOT true regarding cash advance for payroll?
a. Any unclaimed salaries/allowances shall be refunded and issued official receipt to close the
account.
b. Advances for Payroll may be used for encashment of checks or for liquidation of previous or other
types of cash advances.
C. Liquidation of the advances shall be made within five (5) days after the end of the pay period.
d. Advances for Payroll shall be equal to the net amount of the processed payroll corresponding to
the pay period

5. This constitutes all cash paid out during a given period in currency check/ADA. It may also mean the
settlement of government payables by cash, check or ADA.
a. Commercial Check
b. Disbursements
C. Special Cash Advance
d. Regular Cash Advance.

6. Which of the following rule in granting and liquidation of cash advance is not true?
Ateneo De Naga University / College of Business and Accountancy / FINALS
Government Accounting
a Cash advance shall be given only for legally authorized specific purpose
b. No officer or employee shall be granted cash advance unless he is properly bonded in accordance
with existing laws or regulations cash advance for official travel. The amount of cash advance which maybe
granted shall not exceed the maximum cash accountability covered bond
C. Additional cash advance may be allowed to any official or employee even if the previous cash
advance given to him/her is not settled/liquidated
d. Disbursing functions shall be performed only by duly appointed or designated disbursing officer,
Officers and employees who are given cash advances for official travel need not he designated as
Disbursing Officers

7. Which of the following entry is NOT used to recognize the receipt

a. Cash - MDS, Regular
Subsidy from National Government
B Cash - MDS, Special Account
Cash - Treasury/Agency Deposit, Special Account
C. Cash - MDS, Special Account
Subsidy from National Government
d. Cash - MDS, Trust
Cash - Treasury/Agency Deposit, Trust

8. This shall be the authority of the regional and operating units to 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. Notice of Cash Allocation
b. Appropriation
C. Allotment
d. Notice of Transfer of Allocation

9. The journal entry to be made in the books of government agencies/units upon receipt of Notice of Cash
Allocation is
a. Cash - MDS, Regular
Subsidy from National Government
b. Cash in Bank - Local Currency, Current Account
Subsidy from National Government
C. Cash in Bank - Local Currency, Savings Account
Subsidy from National Government
d. Cash in Bank - Local Currency, Time Deposit
Subsidy from National Government

10. It is a disbursement authority representing Modified Disbursement Checks issued and direct payments
to external creditors per validated advice to debit account in the list of due and demandable accounts
payable.
a. Tax Remittance Advice (TRA)
b. Notice of Cash Allocation (NCA)
C. Non-Cash Availment Authority (NCAA)
d. Cash disbursement Ceiling (CDC)

11. Which of the following is an incorrect statement? The objectives of general purpose financial reporting
in the public sector should be to provide information useful for decision making, by:
a. Providing information about the sources, allocation, uses of financial resources
b. Providing information about how the entity financed its activities and met is cash requirements
c. Providing information about the financial condition of the entity and changes in it.
Ateneo De Naga University / College of Business and Accountancy / FINALS
Government Accounting
d. Indicating whether resources were obtained in conformity with the fiscal responsibility of the
personnel involved.

12. Cash advances may be classified into:

a. advances to officers and employees
b. advances to operating expenses
c. advances to interest expenses
d. advances to payroll

13. Fundamental Principles for revenue include the following, except:

a. Pre-numbering of ORs in strict numerical sequence
b. Copies of each receipt shall be the exact reproduction
c. COA does not have an authority to approve exemption from accountable forms
d. No payment shall be received without immediately using an OR

14. Revenue recognition point for spectrum usage fees are when.
a. When services are rendered or when tickets or relevant document representing
violation are issued or, if not practicable, when fees are collected.
b. When bills are rendered for the use, allocation and assignment of radio frequency wave
lengths or, if not practicable, when fees are collected.
c. When bills are rendered for the conduct of inspection by authorized government
official or, if not practicable, when fees are collected.
d. When filing fees are billed.

15. Recognition of revenue from Non-exchange transaction shall be recognized using:

a. Accrual basis
b. Cash basis
c. modified accrual basis
d. hybrid basis

16. When an uncertainty arises about the collectability of an amount already included in revenue, the
uncollectible amount, or the amount in respect of which recovery has ceased to be probable, is recognized
as
a. an adjustment of the amount of revenue originally recognized
b. an impairment loss
c. an allowance for uncollectible account
d. any of the above

17. Which among the following are NOT reasons for the reversion to the General Fund of all other funds of
the NG other than General Fund itself?
a. Funds are no longer necessary for the attainment of the purposes for which
said Funds were established
b Funds needed by the GF in times of emergency
C. None of the above
d. All of the above
18 . These are 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.
a. Royalties b. Taxes
C. Fines D Bequest
Ateneo De Naga University / College of Business and Accountancy / FINALS
Government Accounting
19.Statement 1: Interest shall be recognized as they are earned in accordance with
the substance of the relevant agreement; and
Statement I: Dividends or similar distributions shall be recognized when the
shareholder's or the entity's right to receive payment is established.
A Only statement I is true
b. Only statement Il is true
C. Both statements are true
d. Both statements are false

20. These are transactions in which one entity receives assets or services, or has liabilities extinguished,
and directly give approximately equal value (primarily in the form of cash, goods, services, or use of assets)
to another entity in exchange.
a. Exchange transactions b. Non-exchange transactions
C. Transfers d. None of the above

For Items 21-27 (1 complete journal entry = 1 point)

The accounting records of Barangay Jose Rizal, Dinalupihan, Bataan showed the following Property,
Plant and Equipment (at cost):
Office equipment P 20,000
IT equipment 35,000
Withholding tax 5,500

Assume the following ways of acquiring the above PPEs:

a. Cash purchase (2 points)
b. Purchase on account
C. Donation from NGO
d. Donation from LGU

please prepare 7 complete journal entries to record these transactions from the acquisition, payment
and remittance for all modes of acquisition (a-d).

28. Which of the following is a component of the General Fund of barangay?

a. Personnel services
b. 20% Development Fund
C. 10% Sangguniang Kabataan Fund
d. 5% Local Disaster Risk Reduction Management Fund

29. Closing entries

a. are optional steps
b. affect only balance sheet accounts
c. permit the government agency to analyze routine and repetitive transactions the same way all the time
d. remove the balances from the agency's temporary accounts

30. These are financial statements that are required to be prepared at any given period or at a financial
reporting period without closing the books of accounts.
a. Pre-closing trial balance
b. Statement of management responsibility
C. Interim reports
d. Notes to financial statements

31. This is also termed as the Adjusted Trial Balance.

a. Trial Balance
b. Pre-Closing Trial Balance
Ateneo De Naga University / College of Business and Accountancy / FINALS
Government Accounting
c. Post-Closing Trial Balance
d. None of the above

32. Statement I: If Management strongly believes that compliance with the requirement of PPSAS would
result in misleading presentation that it would contradict the objective of the financial statements set
forth in PPSAS, the entity will not depart from that requirement but instead disclose in the notes to
financial statements the possible misleading presentation that will result in following the
PPSAS requirement.

Statement II: When financial statements are not prepared on a going concern basis, that fact shall be
disclosed, together with the basis on which the financial statements are prepared and the reason why
the entity is not regarded as a going concern.

a.Only Statement I is true

b. Only Statement II is true
C. Both Statements are true
d. Both Statements are false

For Items 33-56

Entity XYZ discovered in 2022 that the revenue from its bulk sales to be recognized in 2021 has been
inadvertently omitted in the amount of P3,500,000.

The entity's Statement of Financial Performance and Statement of Changes in Net Assets/Equity before
adjustment of the error for 2022 and 2021 are as follows:

Entity XYZ
Statement of Financial Performance

2022 2021
Revenue ₽ 40,000,000 P 30,500,000
Other Operating Revenue 10,000.000 15,000,000
Total Revenue 50,000,000 45,500,000
Expenses (45.000.000) (35,000,000)
Surplus P 5,000,000 P10,500,000

Entity XYZ
Statement of Changes in Net Assets/Equity

Particular 2022 2021

Opening accumulated surpluses ₽ 80,500,000 P 70,000,000
Surplus for the period 5,000,000 10,500,000
Closing accumulated surplus P 85,500,000 P 80,500,000

33. Please prepare a complete adjusting entry. (1 point)

34-45. Please prepare the Comparative 2022 and 2021 Restated Statement of Financial Performance (11
points. 1 point per correct account and amount and 1point for the form)
46-56. Please prepare the Comparative 2022 and 2021 Restated Statement of Net Assets / Equity (11
points. 1 point per correct account and amount and 1point for the form)
Ateneo De Naga University / College of Business and Accountancy / FINALS
Government Accounting

For items 57- 62

The National Government received a foreign grant amounting to PS million for the construction of a
railroad system. Under the terms of the grant, the construction project shall be completed within a
period of two years from the receipt of the grant, otherwise, the money shall be returned to the grantor.
The money can only be used as stipulated and the NG is required to include a note in the financial
statement detailing how the money was spent. The Department of Public Works and Highways (DPWH)
will be the implementing entity.

57-58. Please prepare complete journal entries on the receipt of the grant for both the books of National
Government and Implementing Agency (2 points)
59-60. Please prepare complete journal entries on the purchase of construction materials and payment
for labor for the construction of a railroad system for both the books of National Government and
Implementing Agency (2 points)
61. Please prepare complete journal entry on the receipt of the report from DPWH for the completion of
the construction of a railroad system for both the books of National Government (1 point)
62. Please prepare complete journal entry on the turnover and acceptance of completed railroad system
for the book of the Implementing Agency (1 point)

63. The following are the major advocacies of ABS-CBN Lingkod Kapamilya Foundation, Inc except:

a. Disaster Management (Sagip Kapamilya)

b. Environment (Bantay Kalikasan)
c. Livelihood and Social Entrepreneurship (Integrated Area
Development)
d. Gender and Development (Programa Genio)

64. On the Statement of Assets, Liabilities and Fund Balances of ABS-CBN Lingkod Kapamilya
Foundation, Inc, the Net Assets decreased at least 20%.
a. True
b. False
c. Can’t Tell
d. Maybe

65. Statement 1. The fund raising activities of the UNICEF is solely source thru the private sector.
Statement 2. One of the services of UNICEF is thru Water, Sanitation and Hygiene
(WATER) program

a. Statement 1 is correct
b. Statement 2 is correct
c. Both Statements are correct
d. Both Statements are incorrect

66. Statement 1. 72% of UNICEF expenses came from Program Expenses

Statement 2. Only 4% of the UNICEF expenses are for Administration

a. Statement 1 is correct
b. Statement 2 is correct
c. Both Statements are correct
d. Both Statements are incorrect

67. The following are the 7 areas of focus of Rotary International, except:
Ateneo De Naga University / College of Business and Accountancy / FINALS
Government Accounting
a. Peacebuilding and Conflict Prevention
b. Water, Sanitation and Hygiene
c. Community Economic Development
d. Disease Acceleration and Control

68. Statement 1. On the Statement of Financial Position of Rotary International the Net Assets
decreased at least 2.5%.
Statement 2. The Without Donor Restriction of the Net Assets of Rotary International has been higher for
2022 and 2021 as compared With Donor Restriction.
a. Statement 1 is correct
b. Statement 2 is correct
c. Both Statements are correct
d. Both Statements are incorrect

69. According to the Barangay Accounting Plan of barangay Bagumbayan Sur, the following are their
types of transactions except:
a. Appropriations and Obligations
b. Collections and Deposits
c. Disbursements
d. Maintenance of Other Operative Expenses (MOOE)

70. Base on the financial figures of Barangay Bagumbayan Sur, they are heavily reliant on the IRA?
a. True
b. False
c. Can’t Tell
d. Maybe

71. Statement 1. Mandanas Ruling became effective on January 1, 2022.

Statement 2. Personnel Services accounted for 35% of the budget of Barangay Sta Cruz.
a. Statement 1 is correct
b. Statement 2 is correct
c. Both Statements are correct
d. Both Statements are incorrect

72. Barangays can impose their own taxes even if the treasurer is not bonded.
a. True
b. False
c. Can’t Tell
d. Maybe

73. Base on the financial statement for 2020 vs 2019 of LGU Canaman, the major increase in their assets
is due to the addition / increase in:
a. Cash and Cash Equivalent
b. Receivables
c. Inventories
d. Property, Plant and Equipment

74. Statement 1. For the years 2022 and 2019, the Department of Agriculture’s operation incurred
deficits from current operations.
Statement 2. Part of the Financial Statement provided by Department of Agriculture is the Consolidated
Statement of Comparison of Budget and Actual Amount

a. Statement 1 is correct
b. Statement 2 is correct
Ateneo De Naga University / College of Business and Accountancy / FINALS
Government Accounting
c. Both Statements are correct
d. Both Statements are incorrect

75. The following are Bureaus attached with the Department of Agriculture, except:
a. Bureau of Animal Industry (BAI)
b. Bureau of Agricultural Research (BAR)
c. Bureau of Plant Industry (BPI)
d. Bureau of Treasury