Government accounting CHapter two practice test PDF

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Chapter 2: The Budget ProcessProblems 2-1: True or False FALSE 1. The budget preparation in the Philippines uses a “bottom-up” approach. Under this approach, the budget preparation starts from the highest levels of the government down to the lowest levels. FALSE 2. An entity prepares its budget by s...

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Chapter 2: The Budget Process

Problems 2-1: True or False FALSE 1. The budget preparation in the Philippines uses a “bottom-up” approach. Under this approach, the budget preparation starts from the highest levels of the government down to the lowest levels. FALSE 2. An entity prepares its budget by simply rolling-over the budget in the previous year-end and adjusting each line item by 10% increment to reflect inflation. This process is described as zero-based budgeting. FALSE 3. After the budget call from the DBM, the proposed budget of various agencies are submitted immediately to the office of the President for review. FALSE 4. An entity can incur obligations after receiving notice of its appropriation but before receiving allotment. FALSE 5. Budget deliberation in the Congress start in the House of Senate. TRUE 6. A government entity must first receive and allotment before it can incur obligation. FALSE 7. A government entity can make disbursements even before it can incur obligations. FALSE 8. Appropriation is also called obligational authority. TRUE 9. The Notice of Cash Allocation (NCA) is an authority issued by the DBM to central, regional and provincial offices and operating units to cover their cash requirements. TRUE 10. Responsibility accounting greatly enhances budget accountability because managers are evaluated only in terms of the costs or other variables that they control, and therefore, budget deviations can be readily attributed to the managers accountable thereof....