University of Perpetual Help School of Laguna

Sto. Nino St., San Vicente, City of Binan

College of Business & Accountancy

Preliminary Examination on Government Accounting

GENERAL INSTRUCTIONS:
1. Follow all instructions carefully. Failure to do so will warrant a substantial deduction from your
final score.
2. Write everything in non – red ink. Use the back page of the questionnaire for computation.
3. No borrowing of pens, papers, calculators, etc.
4. Do not leave your seat unless you are through with the exam. If you have any questions, just
raise your hand and the proctor will attend you.
5. Talking or looking at your seatmate (and his/her paper) is automatically considered as cheating
which is subject to very serious sanctions as stipulated in the student handbook.

DIRECTION: Read and analyze the question carefully and choose the best answer. On your answer
sheet, find the number of the question and write the letter (capital letter) that corresponds to the
letter of the answer you have chosen. Any erasure in your answer sheet is automatically wrong.
Exams begin here . . .

____ 1. It is the process 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 c. Government budgeting

b. National government d. Government accounting
____ 2. What is the accounting system under of the new government accounting system?

a. Accrual basis c. Cash basis

b. Modified accrual basis d. Modified cash basis
____ 3. The modified accrual basis means

a. All expenses are recognized when incurred and all income is recognized when earned
b. All expenses are recognized when paid and all income is recognized when earned
c. All expenses are recognized when paid and all income is recognized when received
d. All expenses are recognized when incurred and all income is recognized when earned
except for transactions where accrual basis is impractical or when other method is required
by law
____ 4. Which is not a basic feature of the new government accounting system?

a. For a more simplified accounting, only one fund is maintained.

b. A new coding structure and a new chart of accounts with a three-digit numbering system
shall be adopted.
c. Depreciation is regularly taken up in government accounting using the straight line
method with a 20% residual value.
d. The use of the corollary and negative entry shall be stopped.
____ 5. What is the legal basis of the COA in prescribing the New Government Accounting System?

a. Presidential Decree
b. Legislative Act
c. Constitution of the Republic of the Philippines
d. Recommendation of the International Monetary Fund
____ 6. The objectives of the NGAS include all of the following except

a. To simply government accounting

b. To conform with International Accounting Standards
c. To comply with the requirement of the International Monetary Fund
d. To generate periodic and relevant financial reports for better monitoring of performance
____ 7. The NGAS cannot be applied to which of the following?

a. City of Manila
b. Department of Tourism
c. Department of Finance
d. Barangay Pitong Gatang
____ 8. The accounting reports of the government include all of the following, except

a. Pre-closing and post-closing trial balance

b. Statement of financial position and statement of income and expenses
c. Statement of cash flows
d. Statement of retained earnings
____ 9. In government accounting, supplies and materials purchased for inventory purposes shall be recorded
using

a. FIFO c. Moving average

b. Weighted average d. LIFO
____ 10. The objectives of government accounting include all of the following, except

a. To produce information concerning past and present operations

b. To provide for control of the acts of public bodies and offices in the receipt, disposition
and utilization of funds and property
c. To report on the financial position, performance and cash flows of government agencies
d. To provide information about financial position, performance and cash flows of public
enterprises as a basis for making economic decisions
____ 11. The accounting books to be maintained under the NGAS include

I. Regular Agency Books - cash receipts journal, cash disbursements journal, check disbursements
journal, general journal, general ledger and subsidiary ledger.

II. National Government Books - cash journal, general journal, general ledger and subsidiary ledger.

a. I only c. Both I and II

b. II only d. Neither I nor II
____ 12. Which of the following is not a Regular Agency Book?

a. General Journal c. Cash Journal

b. General Ledger d. Check disbursements journal
____ 13. Which of the following journals shall be used under the NGAS?

a. Journal of checks issued c. Journal and analysis of obligations

b. Journal of nills rendered d. General journal
____ 14. What is the basis in recording transactions in the journals?

a. Journal entry voucher

b. Journal of checks issued
c. Journal and analysis of obligations
d. Journal of bills rendered
____ 15. It is the basis for the preparation of journal entry voucher for final reporting in the cash disbursements
journal.

a. Report of disbursement c. Notice of cash allocation

b. Report of cash allocation d. Cash book
____ 16. It is the formal document issued by DBM to the head of the agency containing the authorization,
condition and amount of allocation.

a. Allotment Release Order c. Notice of Cash Allocation

b. Allotment and Obligation Slip d. Registry of Allotment and Obligation
____ 17. The Notice of Cash Allocation is

I. An authorization by the DBM to an agency to withdraw cash from the National Treasury through the
issuance of Modified Disbursement System checks.

II. An authorization by the legislative body to make payments out of government funds under specified
conditions and specific purposes.

a. I only c. Both I and II

b. II only d. Neither I nor II
____ 18. The journal entry to be made by the government agency upon receipt of the Notice of Cash Allocation is

a. Cash - National Treasury, MDS

Subsidiary income from National Government
b. Cash in bank - local currency, current account
Subsidy income from National Government
c. Cash in bank - local currency, savings account
Subsidy income from National Government
d. Cash in bank - local currency, time deposit
Subsidy income from National Government
____ 19. A feature of government accounting that provides for the ceiling or maximum amount an agency can
spend or incur in the performance of its functions is known as

a. Budgetary accounting c. Obligation accounting

b. Responsibility accounting d. Fund accounting
____ 20. It is a system of prescribing the procedures for recording appropriations, allotments and obligations.

a. Fund accounting c. Obligation accounting

b. Budgetary accounting d. Treasury disbursement coding system
____ 21. Which constitutional provision is incorrect?

a. All money collected on any tax levied for a special purpose shall be treated as a general
fund and paid out for the special purpose only.
b. No money shall be paid out of the National Treasury except in pursuance of an
appropriation made by law.
c. A special appropriation bill shall specify the purpose for which it is intended and shall be
supported by funds actually available as certified by the National Treasurer or to be raised
by a corresponding revenue proposal therein.
d. No law shall be passed authorizing transfer of appropriations.
____ 22. The President of the Philippines shall submit to Congress as a basis of the general appropriation bill a
budget of expenditures and sources of financing within how many days?

a. 30 days from the opening of every regular session

b. 30 days from the beginning of the fiscal year
c. 60 days from the opening of every regular session
d. 60 days from the beginning of the fiscal year
____ 23. The President may contract or guarantee foreign loans on behalf of the Republic of the Philippines with
the prior concurrence of

a. Monetary Board
b. Monetary Board and subject to such limitations as may be provided by law
c. Congress of the Republic of the Philippines
d. Supreme Court and subject to such limitations as may be provided by law
____ 24. All appropriation, revenue or tariff bills, authorizing increase of the public debt, bills of local application,
and private bills shall originate exclusively in the

a.
House of Representative but the Senate may propose or concur with amendments.
b.
Senate but the House of Representatives may propose or concur with amendments.
c.
Executive Department but congress may propose and concur with amendments.
d.
Department of Budget and Management subject to the approval of the Commission on
Audit.
____ 25. When a government official, disburses government funds beyond the approved budget, the official may be
charged with

a. Technical malversation c. An administrative case

b. Graft and corruption d. Estafa
____ 26. This consists of the methods and practices of the government for planning, programming and budgeting,
and its primary concern is the availability and use of money to provide the necessary services expected of
the government.

a. New Government Accounting System c. Modern Accounting System

b. National Budget System d. Computerized Accounting System
____ 27. It is a statement of estimated receipts and estimated expenses of the government which serves as basis for
a general appropriation bill.

a. National government budget c. Statement of financial position

b. Local government budget d. Statement of operations
____ 28. Which statement is incorrect concerning budget preparation?

a. Budget preparation is done by the Congress of the Republic of the Philippines

b. The budget preparation begins with the issuance of a “budget call” issued by the
Department of Budget and Management.
c. Budget preparation covers estimation of government revenue, determination of budgetary
priorities and activities and the translation of approved priorities and activities into
expenditure levels.
d. Zero base budgeting may be used in the budget preparation.
____ 29. It is the enactment of the general appropriation bill into law by Congress

a. Budget preparation c. Budget execution

b. Budget authorization d. Budget accountability
____ 30. It is the implementation of the national government budget by different departments and release of
allotments

a. Budget preparation c. Budget execution

b. Budget authorization d. Budget accountability
____ 31. Budget accountability means any of the following, except

a. Periodic reporting by the government agencies of performance under the approved budget.
b. Top management review of government activities and the fiscal and policy implication
thereof.
c. The action of COA in assuring fidelity of government officials and employees by carrying
out the intent of Congress in regard to their handling of receipts and expenditures.
d. Establishments of obligational authority ceilings, and regulation of fund release and
implementation of cash payment schedule.
____ 32. The phase in the national budget cycle which involves the comparison of performance with predetermined
plans and the evaluation of expenditures and performance is called

a. Execution c. Preparation
b. Authorization d. Accountability
____ 33. Zero Base Budgeting

I. Is a process in the budget preparation which requires consideration of all programs, projects and
activities with the use of defined ranking procedures.

II. Focuses on the objects of expenditures, such as salaries and wages, traveling expenses, freight,
supplies, materials and equipment.

a. I only c. Both I and II

b. II only d. Neither I nor II
____ 34. It is the preparation of the national government budget where the total estimated revenue must be more
than the total estimated expenditures.

a. Balanced budget c. Zero base budget

b. Supplemental budget d. Line item budget
____ 35. This is defined as the services, products or benefit accruing to the public estimated in term of performance
target.

a. Expected results c. Project

b. Program d. Resources
____ 36. This is defined as cash and other resources of the government which are available for any purpose and
which are not by law or contractual agreement specifically designated to another fund.

a. General fund c. Trust fund

b. Special fund d. Depository fund
____ 37. Which is not charged with the government accounting responsibility?

a. Commission on Audit
b. Department of Budget and Management
c. Bureau of Treasury
d. Chief Accountant of each government agency
____ 38. Which government body keeps the general accounts of the government?

a. Commission on Audit
b. State Accounting and Auditing Center
c. Department of Finance
d. Department of Budget and Management
____ 39. The government entity charged with the responsibility and approval of accounting system for government
agencies is the

a. Commission on Audit
b. Department of Budget and Management
c. Bureau of Treasury
d. Bangko Sentral ng Pilipinas
____ 40. What is the role of the Bureau of Treasury in relation to government accounting responsibility?

a.
To receive and keep national funds and manage or control disbursements thereof.
b.
To design, prepare and approve the accounting system of government agencies.
c.
To keep the general accounts of the national government.
d.
To prepare the annual financial report of the national government, its instrumentalities and
government-owned or controlled corporations.
____ 41. Which government body prepares the annual financial statements of the national government, local
government, government agencies and government-owned or controlled corporations?

a. Commission on Audit
b. Department of Budget and Management
c. Bureau of Treasury
d. Chief Accountant of each government agency
____ 42. It is the authorization from the Department of Budget and Management to an agency to incur obligation
up to a specified amount that must be within the legislative appropriation.

a. Obligation c. Allotment
b. Appropriation d. Fund release
____ 43. Allotments are recorded in the registries

a. At beginning of the year c. Semiannually

b. At the end of the year d. Quarterly
____ 44. This term represents the allotment by Central office to its Regional office.

a. Special allotment c. Sub allotment

b. Regular allotment d. Allotment advice
____ 45. This is the notice of the allotment transferred by Regional Office to its operating unit.

a. Letter of advice of allotment c. Special allotment

b. Sub allotment d. Regular allotment
____ 46. Congressional authorization in the form of law to make payment out of the public treasury for specific
purposes after compliance with certain conditions is known as

a. Appropriation c. Budgeting
b. Allotment d. Obligation
____ 47. It is a continuing appropriation for an indefinite period in excess of one fiscal year.

a. Annual appropriation c. Multi-year appropriation

b. Continuing appropriation d. No-year appropriation
____ 48. It is the amount committed to be paid by the government arising from an act of a duly authorized
administrative officer and which binds the government to the immediate and eventual payment of money.

a. Obligation c. Allotment
b. Appropriation d. Commitment
____ 49. It is a list of ledger accounts for use of the national government, local government and government-owned
or controlled corporations except financial institutions.

a. Standard government chart of accounts

b. Chart of accounts
c. Statement of financial position
d. Statement of income and expenses
____ 50. The standard government chart of accounts for the use of the national government, local government and
government-owned or controlled corporations, except financial institutions, is prescribed by

a. Commissions on Audit
b. Department of Budget and Management
c. Department of Finance
d. Bureau of Treasury
____ 51. These accounts are closed to the government equity account at the end of the period.

a. Statement of financial position accounts

b. Intermediate accounts
c. Guarantee deposits
d. Allowance for doubtful accounts
____ 52. General income accounts of the government encompass

I. All types of revenue or income generated by agencies in the exercise of their administrative and
regulatory function, income from public enterprises or income from public enterprises or income
from investments and income from grants and donations.

II. All taxes imposed on income, properties and use or sale of goods and services, taxes on international
trade and transactions and other taxes including fines and penalties.

a. I only c. Both I and II

b. II only d. Neither I nor II
____ 53. Specific income accounts of the government include all of the following, except

a. Taxes imposed on income

b. Taxes imposed on properties and use or sale of goods and services
 c. Fines and penalties
d. Foreign government grants
____ 54. Personal services include

a. Salaries, allowances and bonuses

b. Traveling, training and seminar, telephone and internet
c. Advertising, rent, insurance and gasoline
d. Bank charges, interest and losses on foreign exchange transactions
____ 55. The checks issued by an agency chargeable against the accounts of the National Treasurer which are
maintained with different government servicing banks are called

a. Commercial checks c. Agency disbursement checks

b. Treasury disbursement check d. Modified disbursement system checks
____ 56. This serves as the covering letter in transmitting the agency’s financial statements to the COA, DBM and
other oversight agency.

a. Pre-closing trial balance

b. Post-losing trial balance
c. Statement of management responsibility
d. Note to financial statements
____ 57. This financial statement is prepared from information taken directly from the year-end post closing trial
balance.

a. Statement of financial position c. Statement of cash flows

b. Statement of income and expenses d. Statement of government equity
____ 58. Disbursement of local funds must be approved by

a.
Division head
b.
Administrator
c.
Accountant
d.
Local chief executive, except for regularly recurring administrative expenses where the
authority to approve may be delegated
____ 59. Which is not a characteristic of the local government accounting system?

a. The fundamental principles of government fiscal operations governing the national

government.
b. The local government is not required to formulate its budget for the fiscal year.
c. The local government follows the standard government chart of accounts.
d. The fundamental accounting principles and procedures observed by the local government
do not differ from those adopted by the national government.
____ 60. This fund constitutes the annual contribution from each province, city or municipality in the amounts
approved by law for each barrio which is spent solely for community development projects.

a. Infrastructure fund c. Trust fund

b. Special education fund d. Barrio development fund