Answer KEY Prelim EXAM PDF

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ANSWER KEY PRELIM EXAMEXAM DATE: 9/ 16/ What is the legal basis of the COA in promulgating the GAM for NGAs? a. Revised Penal Code, Art. 217 b. State Audit Code of the Philippines, P. No. 1445, Sec. 109 c. Article IX-D, Section 2 par. (2) of the 1987 Constitution of the Republic of the Philippines d...

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ANSWER KEY PRELIM EXAM EXAM DATE: 9/16/2020

1. What is the legal basis of the COA in promulgating the GAM for NGAs? a. Revised Penal Code, Art. 217 b. State Audit Code of the Philippines, P.D. No. 1445, Sec. 109 c. Article IX-D, Section 2 par. (2) of the 1987 Constitution of the Republic of the Philippines d. R.A. 9298 2. The GAM for NGAs aims to update all of the following except a. standards, policies, guidelines and procedures in accounting for government funds and property b. coding structure and accounts c. accounting books, registries, records, forms, reports and financial statements d. rules and regulations regarding the filing and payment of taxes by government employees 3. Which of the following is one of the Fundamental Principles for Revenue under the GAM for NGAs? a. 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. b. Temporary receipts may be issued to acknowledge the receipt of public funds; provided that, an official receipt is issued within a short period of time as may be prescribed by the COA. c. Money in the hands of the Collecting Officer may be utilized for the purpose of cashing private checks, upon proper endorsement and identification of the payee or endorsee. Checks drawn in favor of the government in payment of any such indebtedness shall likewise be accepted by the officer concerne d. d. All of these 4. Which of the following is not one of the Fundamental Principles for Disbursement of Public Funds under the GAM for NGAs? a. No money shall be paid out of any public treasury or depository except in pursuance of an appropriation law or other specific statutory authority. b. Government funds or property shall be spent or used solely for public purposes. c. Trust funds shall be available and may be spent only for the specific purpose for which the trust was created or the funds received. d. Fiscal responsibility shall, to the greatest extent, be assumed solely by the Head of the government agency. 5. Which of the following statements is incorrect regarding the GAM for NGAs? a. 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. b. 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. c. The objectives of general purpose financial statements (GPFSs) are to provide information about the financial position, financial performance, and cash flows of an entity that is useful to a wide range of users in making and evaluating decisions about the allocation of resources. Specifically, the objectives of general purpose financial reporting in the public sector are to provide information useful for decision-making, and to demonstrate the accountability of the entity for the resources entrusted to it. d. The DBM accounts for the cash, public debt and related transactions of the NG.

6. 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. a. Financial statement analysis and ratios b. Understandability c. Comparability d. Feedback value or confirmatory value 7. Which of the following principles is not in accordance with the Basic Government Accounting and Budget Reporting Principles under the GAM for NGAs? a. modified accrual basis of accounting in accordance with the PPSAS b. budget basis for presentation of budget information in the financial statements (FSs) in accordance with PPSAS 24 c. RCA prescribed by COA d. financial statements based on both accounting and budgetary records e. fund cluster accounting 8. The 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. 9. The basis of accounting required by the GAM for NGAs is a. Budget basis b. Modified accrual basis c. Cash basis d. Accrual basis 10. The President’s explanation of the country’s fiscal policy and budget priorities is contained in a document called the a. National Expenditure Program b. President’s Budget Message c. President’s Fiscal Policy and Priorities d. Budget of Expenditures and Sources of Financing 11. After the incurrence of obligations, the next step in the budget cycle is a. Allotment b. Disbursement c. Appropriation d. Disbursement authority 12. 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. a. Notice of Cash Allocation b. Allotment c. Approved Budget d. General Appropriations Bill 13. After the budget call, budget hearings are made whereby agencies defend their proposed programs and expenditures for the upcoming year before the a. COA b. DBM c. Congress d. BTr 14. Under responsibility accounting, a cost is considered controllable at a given level of managerial responsibility if a. the manager has the power to incur it within a given period of time. b. the cost is non-recurring, can be measured with sufficient reliability and is not immaterial c. the cost is a fixed cost, such that its incurrence is reasonably certain. d. all of these.

15. Which of the following statements best differentiates the government accounting process from the accounting process of a business entity? a. The government accounting process involves numerous complicated steps or procedures that are beyond the understanding of a mere JPIA member, but not for a CPA. b. The government accounting process involves procedures that are not generally acceptable for business entities. c. The government accounting process is similar to that of a business entity, except that it incorporates budgetary controls, such as recording in the budget registries and preparing periodic budget accountability reports. d. Unlike for the accounting process of business entities which ends in the preparation of general purpose financial statements, the government accounting process ends with the audit by the COA. 16. This report, required of government entities, shows the names of creditors, the amounts owed to them, and the number of days these obligations are outstanding. This report is submitted to the COA and DBM within 30 days after the end of the year. a. List of Not Yet Due and Demandable Obligations b. Aging of Due and Demandable Obligations c. Percentage of Obligations Report d. Report on Allotments, Obligations and Disbursements 17. Under this approach to budgeting, several parties participate in the budget preparation, starting from the lowest levels of the government up to the highest levels. a. Bottoms-up budgeting b. Zero-based budgeting c. Incremental budgeting d. Bottom-up budgeting

18. 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 accounting b. Government reporting c. Government auditing d. Tax accounting 19. The GAM for NGAs is promulgated by the a. Commission on Accounting (COA) b. Commission on Audit (COA) c. Board of Accountancy (BOA) d. Bureau of Internal Revenue (BIR)

20. The Commission on Audit (COA) is responsible for a. the formulation and implementation of the national budget with the goal of attaining the nation’s socio-economic objectives. b. receiving and keeping national funds and managing and controlling the disbursements thereof. c. directly implementing the projects of the government. d. promulgating accounting and auditing rules and regulations. 21. Which of the following is not charged with government accounting responsibility? a. Commission on Audit b. Bureau of Internal Revenue c. Non-stock, non-profit private hospital d. Department of Budget and Management

22. Which of the following qualitative characteristics may be sacrificed when reporting information on a timely basis? a. Relevance b. Reliability c. Substance over form d. Faithful representation

23. 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. a. Feedback value b. Predictive value c. Materiality d. Relevance

24. This refers to the comparability between the financial statements of different entities? a. Inter-comparability b. Intra-comparability c. Horizontal comparability d. Vertical comparability

25. When the substance of a transaction or event differs from its legal form, the entity should report the transaction’s or event’s a. substance b. legal form c. a trade-off between a and b d. either a or b, based on their significance

26. The implication that users must be informed of the entity’s policies, changes to those policies, and the effects of those changes refers to a. Comparability b. Completeness c. Understandability d. Reliability

27. In the financial reporting system of the national government, to which of the following shall an entity reconciles its cash records? a. Commission on Audit b. Bureau of Treasury c. Department of Budget and Management d. Office of the President 28. Which of the following approaches to budget preparation provides the best internal control? a. Incremental budgeting b. Zero-sum budgeting c. Top-down budgeting d. Zero-based budgeting 29. 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. a. Zero-based budgeting b. Bottoms-up budgeting c. Incremental budgeting d. Bottoms-down budgeting

30. Which of the following is correct regarding zero-based budgeting? a. Several parties participate in the budget preparation starting from the lowest levels of the government to the highest levels. b. All zeroes in the budget are omitted. c. All proposed programs and expenditures in the upcoming year must be new. Programs and expenditures in the previous year should never be carried over to the next year. d. The current year’s budget is formulated without regard to the previous year’s budget. 31. Which of the following would most likely comes first in the budget process? a. Budget accountability report b. President’s enactment of the budget c. Presentation to the Office of the President d. Budget Call from the DBM 32. Which of the following would most likely comes last in the budget process? a. Budget accountability reports b. Allotment c. Disbursements d. Performance review 33. Entity A, a government entity, receives authorization to disburse funds not to exceed ₱1B in a specified period. This event can be described as a. Notice of Cash Allocation b. Allotment c. Appropriation d. Adontknowcation 34. 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 a. Notice of Cash Allocation b. Allotment c. Appropriation d. Amnotsurecation 35. 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 a. Notice of Cash Allocation b. Allotment c. Appropriation d. Budgetication 36. 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 a. Disbursement b. Allotment c. Disbursement authority d. Obligation 37. 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. a. Responsibility Accounting...