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Quizziz Midterm ExamQuestions Answers The carrying amount of inventory is not recognized as expense in this type of event or transaction. The inventory is used in the production of another asset. The President’s explanation of the country’s fiscal policy and budget priorities is contained in a docum...

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Quizziz Midterm Exam Questions 1. The carrying amount of inventory is not recognized as expense in this type of event or transaction. 2. The President’s explanation of the country’s fiscal policy and budget priorities is contained in a document called the 3. All of the above involves the physical transfer of cash except 4. The initial testing costs incurred on an item of property, plant and equipment are

5. The GAM for NGAs aims to update all of the following except

6. Which of the following may qualify as investment property? 7. The journal entry to record the collection of unbilled tax revenue (e.g., Travel Tax) through direct deposit in Authorized Agent Banks is 8. Entity A acquires equipment from a supplier, on account. A lender settles the account of Entity A by directly paying the supplier the proceeds of a loan payable that is recorded in the BTr’s books. This mode of disbursement is called 9. Entity A, a government entity, records purchases of items of inventory under the “Purchases” account and freight-in under the “Freight-in” account. Which of the following statements is correct? 10. According to the GAM for NGAs, revenue from exchange transactions are measured at the amount of cash received. 11. It is a report that is prepared for the purpose of bringing the balances of cash per records and per bank statement into agreement. 12. This refers to charges for the use of cash or cash equivalents, or amounts due to the entity. 13. Under this inventory system, purchases, sales, and other transactions affecting inventory are recorded in the “inventory” and “cost of sales” accounts, as appropriate. Moreover, stock cards and stock ledgers are maintained. 14. Which of the following is not one of the registries maintained by a government entity? 15. This account is debited when government

Answers The inventory is used in the production of another asset. President’s Budget Message

Remittance of taxes through the Tax Remittance Advice capitalized after deducting the disposal proceeds of samples generated during testing. rules and regulations regarding the filing and payment of taxes by government employees An agricultural land purchased for appreciation purposes Dr) Cash-Treasury/Agency Deposit, Regular. Cr)Travel Tax Non-Cash Availment Authority (NCAA)

Entity A is not compliant with the requirements of GAM for NGAs.

False

bank reconciliation statement

Interest income

Perpetual inventory system

Registries of Journals and Ledgers Cash-Treasury/Agency

entities remit collections to the National Treasury. 16. 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 17. It is a type of fund held by a government entity that is designated for special purposes. 18. This approach to budgeting requires the justification of items in the budget irrespective of whether they are new or carried over from the previous year. 19. All of the following may cause the cancellation of a check drawn by a government entity except 20. Entity A is a government hospital. Entity A would most likely recognize revenue from services rendered to a patient 21. Which of the following transactions is not recorded through a credit to the “CashModified Disbursement System (MDS), Regular” account? 22. The receipt of subsidy from the national government or other government agencies 23. These refer to transactions in which one entity receives assets or services, or has liabilities extinguished, and directly gives approximately equal value to another entity in exchange. 24. Entity A, a government entity, has an unused NCA of ₱50,000 at the end of the current year. The entry to record the reversion of unused NCA is 25. Which of the following statements is incorrect regarding the GAM for NGAs? 26. The GAM for NGAs is promulgated by the 27. According to the PPSAS, a financial asset is recognized when 28. The basis of accounting required by the GAM for NGAs is 29. Entity A, a government entity, purchases office supplies. Entity A would most likely record the purchase 30. Who owns the goods in transit under FOB shipping point? 31. Which of the following statements best describes the various Registries maintained by government entities?

32. Which of the following statements is incorrect regarding the accounting for unreleased

Deposit, Regular Outstanding checks

Special fund Zero-based budgeting

The check is dishonored.

when the services are rendered and the patient is billed. Constructive remittance of taxes withheld to the BIR.

gives rise to the recognition of revenue Exchange transactions

Dr) Subsidy from National Government Cr) CashModified Disbursement System (MDS), Regular The DBM accounts for the cash, public debt and related transactions of the NG. Commission on Audit (COA) an entity becomes a party to the contractual provisions of the instrument. Accrual basis as Inventory Held for Consumption Buyer The Registries primarily serve as an internal control for controlling and monitoring the conformance of actual results with the approved budget. Unreleased checks are physically cancelled.

checks by a government entity? 33. A government entity recognizes revenue from exchange or non-exchange transactions. In which of the following transactions does a government entity need not recognize revenue? 34. It is the expenditure authority derived from appropriation laws, government ordinances, and other decisions related to the anticipated revenue or receipts for the budgetary period. 35. After the budget call, budget hearings are made whereby agencies defend their proposed programs and expenditures for the upcoming year before the 36. According to the GAM for NGAs, the receipt of concessionary loans by government entities may give rise to revenue recognition. 37. The taxable event for income tax is the passage of the time period for which the tax is levied 38. For government entities, inventories are assets (choose the incorrect one) 39. A government entity remitting collections to the BTr will debit this account to record the remittance. 40. For government entities, the capitalization threshold for PPE is 41. This consolidates all issued Requisition and Issue Slips (RIS) for inventories and is used in updating both the Stock Card and the Stock Ledger Card 42. What is the legal basis of the COA in promulgating the GAM for NGAs? 43. 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. 44. After the incurrence of obligations, the next step in the budget cycle is 45. Which of the following statements is incorrect regarding the accounting for biological assets?

46. Entity A exchanges an item of PPE with Entity B. Assuming the exchange lacks commercial substance, how should Entity A measure the equipment received from the exchange? 47. The entry to record a disbursement from the petty cash fund is 48. Which of the following statements regarding

Receipt of a pledge.

Approved Budget

DBM

True

False

Used in the production of goods. Cash-Treasury/Agency Deposit, Regular ₱15,000 or more Report of Supplies and Materials Issued (RSMI)

Article IX-D, Section 2 par. (2) of the 1987 Constitution of the Republic of the Philippines Fair value hedge

Disbursement authority PAS 41 and the GAM for NGAs have the same accounting treatment for consumable and bearer plants. at the carrying amount of the asset given up, plus cash paid or minus cash received None of these. Officials and employees

the disbursement of government funds is incorrect?

49. Which of the following is one of the Fundamental Principles for Revenue under the GAM for NGAs?

50. It is an authority issued by an agency’s Central Office to its regional and operating units to cover the latter’s cash requirements. 51. Which of the following reflects a Non-Cash Availment Authority (NCAA) mode of disbursement? 52. Which of the following is considered a biological asset? 53. Which of the following measurement bases is acceptable for the subsequent measurement of an investment property held by a government entity? 54. Which of the following government agencies will most likely be able to obtain a disbursement authority in the form of Cash Disbursement Ceiling (CDC)? 55. This accounting concept is necessary so that users can use information in the financial statements in noting differences and similarities between those information presented and information from other sources that the user may have. 56. Entity A, a government entity, grants a ₱10,000 cash advance for the travelling expenses of an employee. The employee liquidates ₱8,000 of the cash advance and remits the excess cash advance of ₱2,000. After recording the grant of cash advance and the liquidation thereof but before adjustment for the collection of the excess cash advance, how much is the recorded expense in the books of accounts? 57. The constructive remittance of taxes withheld through the TRA gives rise to the recognition of revenue. 58. Which of the following statements is correct regarding investment properties?

authorized to travel shall be granted cash advance to cover traveling expenses. The amount granted shall be accounted for as “Due to Officers and Employees.” No payment of any nature shall be received by a collecting officer without immediately issuing an official receipt in acknowledgement thereof. The receipt may be in the form of postage, internal revenue or documentary stamps and the like, officially numbered receipts, subject to proper custody, accountability, and audit. Notice of Transfer of Allocation (NTA) Dr) Accounts Payable Cr)Subsidy from National Government Pig cost less accumulated impairment losses

DOLE

Comparability

₱8,000

true

A building being rented out to the entity’s employees who are paying rentals at market

59. The distinguishing characteristic that identifies an investment property from the other assets of an entity is? 60. It is an authority issued by an agency’s Central Office to its regional and operating units to cover the latter’s cash requirements. 61. Which of the following would result to an increase or decrease in the revenue reported by a government' 'entity in its statement of financial performance? 62. Which of the following is not one of the Fundamental Principles for Disbursement of Public Funds under the GAM for NGAs? 63. When cash flows are deferred, the fair value of the consideration receivable is its present value. 64. Which of the following statements is correct regarding the Fundamental Principles for Disbursement of Public Funds under P.D. No. 1445? 65. Which of the following does not qualify as cash equivalent for a government entity? 66. Which of the following documents is prepared when issuing semi-expendable property to end-users? 67. The Commission on Audit (COA) is responsible for 68. Which of the following is not charged with government accounting responsibility? 69. According to the GAM for NGAs, cash disbursements are made through 70. Which of the following modes of disbursements would result to the recognition of a loan payable in books of the BTr? 71. Which of the following items are classified by a government entity as Inventory Held for Consumption? 72. Which of the following may be capitalized as cost of property, plant and equipment? 73. Which of the following may not be included as part of cash in the note disclosures? 74. Entity A, a government entity, receives its ₱9M allotment. The journal entry to record this event is 75. The issuer of a financial instrument shall classify the instrument, or its component parts, on initial recognition as a 76. The taxable event for Value added tax (VAT) is the a undertaking of 77. Entity A estimates a risk of loss on a

rates is not an investment property. Generates separately identifiable cash flows from the other assets of the entity. Used in the production of goods. The repayment of a loan payable is forgiven.

Fiscal responsibility shall, to the greatest extent, be assumed solely by the Head of the government agency. True

Trust funds shall be available and may be spent only for the specific purpose for which the trust was created or the funds received. Money market placement with an original term of 3 months. Inventory Custodian Slip

promulgating accounting and auditing rules and regulations. Non-stock, non-profit private hospital cash advances to authorized personnel NCAA

Office supplies and similar materials. Professional fees Treasury bills acquired 3 months before maturity date No journal entry.

any of these

taxable activity. Risk management

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 78. Biological assets and agricultural produce are recognized when all of the following are present except 79. Relief and other welfare goods held for distribution are most likely to be classified by a government entity as 80. If the unadjusted balance of cash per bank statement is less than the adjusted balance and there no other reconciling items or errors, the difference is most likely caused by

probable future event

Inventory Held for Distribution

Deposits in transit

Quizziz- Non-proft Questions 1. ABC Organization, a non-profit entity, acquired shares of stocks to be held as investment for ₱200,000 using unrestricted net assets. During the year, ABC received cash dividends of ₱10,000. At year-end, the shares have a fair value of ₱220,000. What is the effect of the transactions described above on the year-end statement of activities of ABC? increase (decrease) 2. Private not-for-profit organizations should report a statement of cash flows using the 3. The machine of ABC Organization, a not-for-profit entity, has malfunctioned. Mang Tony, a professional mechanic, repaired the machine for free. The fair value of the services is estimated at ₱10,000. Which of the following statements is correct? 4. According to SFAS 117, the financial statements of a not-for-profit entity should focus on the 5. On the statement of activities of a private university, expenses are reported by (use SFAS 117 in answering this question) 6. Financial accounting (financial reporting) applies to which of the following? 7. According to US GAAP, the accounting requirement unique to Voluntary Health and Welfare Organizations (VHWO) is the

8. A non-profit organization receives donation of services in-kind from an accountant who was consulted regarding the NPO’s financial reporting system. The NPO will most likely recognize those services as 9. On the statement of operations of a health care organization, expenses are deducted from (use SFAS 117 in answering this question)

Answers 30,000

either direct method or Indirect method This event has a zero net effect on ABC’s net assets

Basic information on the organization as a whole. Function

All of these provision of a statement of functional expenses that reports expenses by both functional and natural classifications. expenses and revenues

Unrestricted revenues.

1. OVERVIEW OF GOVERNMENT ACCOUNTING 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. The GAM for NGAs is promulgated by the The Commission on Audit (COA) is responsible for Which of the following is not charged with government accounting responsibility? Which of the following qualitative characteristics may be sacrificed when reporting information on a timely basis? According to the GAM for NGAs, information has this qualitative characteristic if it can be used to assist in evaluating past, present or future events or in confirming or correcting past evaluations. This refers to the comparability between the financial statements of different entities? When the substance of a transaction or event differs from its legal form, the entity should report the transaction’s or event’s

Government accounting

Commission on Audit (COA) promulgating accounting and auditing rules and regulations. Non-stock, non-profit private hospital

Reliability

Relevance

Inter-comparability

Substance

The implication that users must be informed of the entity’s policies, changes to those policies, and the effects of those Comparability changes refers to In the financial reporting system of the national government, to which of the following shall an entity reconcile its cash Bureau of Treasury records?

2. BUDGET PROCESS & GOVERNMENT ACCOUNTING PROCESS

Which of the following approaches to budget preparation provides the best internal control? This approach to budgeting requires the justification of items in the budget irrespective of whether they are new or carried over from the previous year.

Zero-based budgeting

Which of the following is correct regarding zero-based budgeting?

The current year’s budget is formulated with regard to the previous year’s budget

Which of the following would most likely come first in the budget process?

Budget call to DBM

Which of the following would most likely come last in the budget process?

Performance review

Entity A, a government entity, receives authorization to disburse funds not to exceed ₱1B in a specified period. This event can be described as Entity A, a government entity, receives notice that out of its ₱10B approved budget for the year, Entity A can incur obligations up to ₱4B in the first quarter. This event can be described as

Notice of cash allocation

Entity A, a government entity, receives notice that for the current year, the maximum amount it can spend on maintenance and other operating expenses is ₱10B. This event can be described as After receiving its obligational authority amounting to ₱4B, Entity A enters into binding agreements for the eventual payments of a total sum of ₱3B. The “₱3B” event can be described as

Appropriation

It is a part, segment, unit or function of a government agency, headed by a manager, who is accountable for a specified set of activities.

Responsibility center

Zero-based budgeting

Allotment

Obligation

3. The Government Accounting Process The NCA is recorded in the

Registry of Allotments & Notice of Cash Allocation (RANCA) and Books of Accounts (Journal and Ledger)

This event is recorded in the books of accounts

Closing entries

Which of the following as (are) affected when a government entity incurs obligations? The 8-digit Revised Chart of Accounts (RCS) Code for the account “Subsidy from National Government” starts with number According to the GAM for NGAs, the Registries are (choose the incorrect statement)

ORS and RAOD

Which of the following is not a form of disbursement authority?

Allotment

The receipt of allotment is recorded in the

RAPAL and RAOD

Which of the following is (are) affected when a government entity makes disbursements to settle recorded obligations? The journal entry to record the billing of revenue (e.g., Communication Network fee) is

O...