Government Accounting and Non Profit Organizations

8. It is a statement of estimated receipts and estimated expenses of the government which serves as
Name:____________________________ basis for a general appropriation bill

PART 1 9. Which of the three major branches of the government prepare the national budget?

1. The New Government Accounting system was prescribed by 10. It is an authorization by the legislative body to make payments out of government funds under
a. Commission on Audit specified conditions and specific purposes.
b. Department of Budget and Management
c. Department of Finance 11. IFRS 4 applies virtually to
d. Bureau of treasury a. All insurance contracts except reinsurance contracts
2. The modified accrual basis means: b. All insurance contracts including reinsurance contracts
a. All expenses are recognized when incurred and all income is recognized when earned c. All insurance contracts except reinsurance contracts and other assets and liabilities of insurer
b. All expenses are recognized when paid and all income is recognized when earned d. All insurance contracts and other assets and liabilities of insurer except reinsurance contracts
c. All expenses are recognized when paid and all income is recognized when received C
d. All expenses are recognizes when incurred and all income is recognized when earned except 12. An insurance contract is
for transactions where accrual basis is impractical or when other method is required by law. a. Contract under which one party accepts significant insurance risk from another party by agreeing to
3. Which of the following is not a Regular Agency Book? compensate the policyholder if a specified uncertain future event adversely affects the policyholder.
a. General Journal b. Contract under which one party accepts significant insurance risk from another party by agreeing to
b. General ledger compensate the policyholder of some but not all of amounts from a specified uncertain future event
c. Cash journal that adversely affects the policyholder.
d. Check disbursements journal c. Contract under which one party accepts significant insurance risk from another party by agreeing to
compensate the policyholder if a specified uncertain future event favorably affects the policyholder.
4. The President may contract or guarantee foreign loans on behalf of the Republic of the Philippines
d. Contract under which one party accepts significant insurance risk from another party by agreeing to
with the prior concurrence of
compensate the policyholder of some but not all of amounts from a specified uncertain future event
a. Monetary board that favorably affects the policyholder.
b. Monetary board and subject to such limitations that may be provided by law A
c. Congress of the Republic of the Philippines 13. Which of the following is advised by IFRS 4?
d. Supreme Court and subject to such limitations as may be provided by law I. Prohibits provisions for possible claims under contracts that are not in existence at the
5. Which of the following is charged with government accounting responsibility? reporting date
I. Commission on Audit II. Requires a rest for the adequacy of recognized insurance liabilities and an impairment test for
II. Department of Budget and Management reinsurance assets
III. Bureau of Treasury a. I only
IV. National Government Agency b. II only
a. I and II only c. Both I and II
b. I, II and III only d. Neither I nor II
c. I only C
d. I, II, II and IV 14. Which is true?
I. An insurer has to change its accounting policies for insurance contracts to eliminate excessive
6. This financial statement is prepared from the information taken directly from the year-end post prudence.
closing trial balance. II. There is a rebuttable presumption that an insurer’s financial statements will become less
relevant and reliable if it introduces an accounting policy that reflects future investment
margins in the measurement of insurance contracts.
a. I only
7. The President of the Philippines shall submit to the Congress as a basis of the general
b. II only
appropriation bill a budget of expenditures and sources within what limit? c. Both I and II
 d. Neither I nor II III. Improved facilities such as irrigation for the benefit of an entire local community
B a. I only
15. Which are required disclosures under IFRS 4? b. I and II
a. The effects of changes in assumptions c. II and III
b. If the insurer is cedant, certain additional disclosures are required d. I, II and III
c. Risk management objectives and policies C
d. All of the above 21.
D
16. Which is true about environmental accounting? TRUE OR FALSE
a. It provides a framework for organizing information on the status, use and value of natural resources
and environmental assets 1. All money collected on any tax levied for a special purpose shall be treated as a general fund and
b. Included in its concerns are fisheries and forest accounts among others paid out for the special purpose only.
c. It is also concerned with expenditures on environmental protection and resource management
2. No money shall be paid out of the National Treasury except in pursuance of an appropriation made
d. Included in environmental accounts are natural resource asset account and not pollution and
by law.
material physical flow accounts.
D
3. A special appropriation bill shall specify the purpose for which it is intended and shall be supported
17. Which pertains to Environmental goods and services industry accounts? by funds actually available as certified by the National Treasurer or to be raised by a corresponding
a. Made by industry and government to protect the environment or manage resources revenue proposal therein.
b. Outline goods and services and their contributions to GDP, employment and exports 4. No law shall be passed authorizing transfer of appropriations.
c. Contains taxes and other fees collected by the government for pollution emissions and resource 5. Commission on Audit examines, audits and settles all account pertaining to the receipts and
use expenditures of the national government and its subdivisions, constitutional bodies, GOCCs and
d. Assign monetary value to the environmental costs and benefits tied to resource use and the non-governmental entities receiving subsidy from the government
generation of pollutants 6. The COA keeps the general accounts of the government.
18. What is government assistance? 7. Services when contributed are recognized when they enhance or create financial assets.
I. Assistance by government in the form of transfer of resources to an entity in return for part or 8. The contributed services require specialized skills, are provided by individuals possessing those
future compliance with certain conditions relating to the operating activities of the entity skills and would typically need to purchase if not provided by donation.
II. Action by government designed to provide an economic benefit specific to an entity or range 9. If a law firm contributes service which involve advice related to a foundation’s endowment, it is
of entities qualifying unde certain criteria recognized as contributed services and included in unrestricted revenue.
a. I only 10. The participation of senior citizens in a telethon to raise money for a building is considered as
b. II only unrestricted revenue.
c. I and II
d. None of the bove
B
19. Which can be considered as government assistance?
I. Free technical or marketing advice
II. Government procurement policy that is responsible for a portion of the entity’s sales
III. Imposition of trading constraints on competitors
a. I only
b. I and II
c. II and III
d. I, II and III
e. B
20. Which cannot be considered as government assistance?
I. Provision of guarantee
II. Infrastructure in development areas such as improvement to the general transport and
communication network Problem 1
 1. To record the receipt of performance bonds
Authority with limitations The Agency RPQ of the national government conducted seminar about the New 2. To record deposit of performance bond to the Bureau of Treasury.
Government Accounting System. The agency collected a total amount of P20,000, which was deposited with 3. To record payment of 15%mobilization fee.
agency depositary bank and paid the following expenses of the seminar: Office supplies, P5,000; Rent, 4. To record the first billing – 50% complete.
P3,000; and Printing and Binding, P1,000. The excess of the amount collected was appropriately remitted to 5. To record payment of the first billing.
the National Treasury. Prepare the entries:
1. To record collection of seminar fees.
2. To record deposit of collections.
3. To record payment of expenses

Problem 2
During cash examination by the resident auditor, cash overage in the amount of P500 was discovered in the
possession of the disbursing officer of MLA Agency. The cash overage was forfeited and deposited in the
National Treasury. Prepare the entries
1. To record forfeited cash overage
2. To record deposit to the Bureau of Treasury (books of Agency)
Problem 3
Collection with authority to use During tax season of 2009, the BIR made collections of P100,000,000, which
was accordingly remitted to the Bureau of Treasury. Prepare the entries
1. To record collections made by BIR
2. To record remittance to Bureau of treasury (Books of Agency)
Problem 4
When RGL Agency, a national government agency, received its capital outlay allotment and NCA (net of Tax
Remittance Advice) from the Department of Budget Management in the amount of P25,000,000, the agency
contracted Ree Co. for the construction of roads in its area of responsibility in the total contract price of
P20,000,000. Earth Mover was required by the agency to post a performance bond of P1,500,000 cash and
deposited the performance bond to the Bureau of Treasury through an Authorized Government Depositary
Bank.
Problem 4
The following information was taken from the accounts and records of the Astronomy Foundation, a private,
not-for-profit organization. All balances are as of December 31, 2005, unless otherwise noted.
Unrestricted Support - Contributions..........................................................................$5,000,000
Unrestricted Support - Membership Dues.................................................................. 600,000
Unrestricted Revenues - Investment Income.............................................................. 96,000
Temporarily restricted gain on sale of investments.................................................... 9,000
Expenses - Research................................................................................................. 3,200,000
Expenses - Fund Raising........................................................................................... 700,000
Expenses - Management and General....................................................................... 300,000
Restricted Support - Contributions.............................................................................. 600,000
Restricted Revenues - Investment Income................................................................. 50,000
Permanently Restricted Support - Contributions........................................................ 60,000
Unrestricted Net Assets, January 1, 2005.......................................................................500,000
Temporarily Restricted Net Assets, January 1, 2005................................................. 6,000,000
Permanently Restricted Net Assets, January 1, 2005................................................ 50,000
The unrestricted support from contributions was received in cash during the year. The expenses included
$1,300,000 payable from donor -restricted resources.

Upon signing of the contract, the contract price was appropriately obligated and a mobilization fee equal to Required:
15% of the contract price was released to the contractor. When the project is 50% completed, a progress 1. Net assets released from restrictions1,300,000
billing was received by the agency; accordingly, the accounts payable was recorded and was eventually 2. Total supporting services
paid, net of 10% retention fee and 10% withholding tax. When the project was completed, a final billing was 3. Change in unrestricted net assets
received by the agency; and the accounts payable was recorded after inspection and acceptance of the 4. Change in temporarily restricted assets
project. However, due to delay in the construction of the roads, a penalty was imposed. Accordingly, a 5. Change in permanently restricted assets
liquidation damage of P500,000 was deducted from the contract price for the amount paid by the agency , 6. Balance of Net assets by year end
net of withholding tax. Finally, the performance bond and retention fee were refunded by the agency to the
contractor; while the withholding tax was remitted to the BIR. Problem 5
Remote Reconstructive is a private, not-for-profit hospital. The following information is available about the
Prepare the entries operations.
1. Gross patient services charges totaled $4,500,000.
2. Included in the above revenues are: charity services, $165,000; contractual adjustments, $400,000; and
courtesy allowances, $14,000.
3. Received marketable securities valued at $115,000 for the purchase of new diagnostic equipment.
4. The marketable securities were sold for $124,000 and diagnostic equipment was purchased at a cost of
$138,000.
5. Revenue from the hospital gift shop was $31,000 and from the cafeteria revenues were $160,000.
6. Incurred and paid nursing service costs of $1,000,000 and general service costs of $500,000.

Required:
Make journal entries for the aforementioned transactions.

GIVE THE MEANING

1. BOC
2. SSS
3. NFA
4. DILG
5. TESDA
6. DPWH

BONUS ONLY
1. DAR
2. DENR
3. PRC
4. DTI