ADVANCED FINANC! e (CPA REVIEW SCHOOL OF THE PHILIPPIN: Manil ACCOUNTING AND REPORTING ‘GUERRERO/GERMAN/DE JESUS/LIM/FERRER/LACO/VALIX What is the title of the revised government accounting system for national government ‘agencies which will be effective starting January 1, 2016? a Government Accounting Manual (GAM) _ b. New Government Accounting System (NGAS) c. Philippine Government Accounting System (PGAS) d. National Government Accounting Manual (NGAM) Under Article IX-D Section 2 of the 1987 Constitution of the Republic of the Philippines, it shall have the exclusive authority, subject to the limitations in this Article, to define the scope of its audit and examination, establish the techniques and methods required therefore, and promulgate accounting and auditing rules and regulations, including those for the prevention and disallowance of irregular, unnecessary, excessive, extravagant, or unconscionable expenditures, or uses of government funds and properties. It shall also be responsible to 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. — ss b. Civil Service Commission ¢. Commission on Election 4. Commission on Human Rights ‘The Government Accounting Manual aims to update the following, except a. standards, policies, guidelines and procedures in accounting for government funds and property b. coding structure and accounts ¢. accounting books, registries, records, forms, reports and financial statements. 4d. scope and objectives of audit. 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 auditing b. Government reporting « d. Government analyzing io the the financial plan of a government for a given period, usually for a fiscal year, hai astotal taiscuve eee they will be generated and used over the fiscal period. a. Government budget b. Government financial position cc. Government financial statements d. Government financial performance It refers to the first step in the government budgetary process wherein the President, through the assistance of the Department of Budget and Management, shall prepare and submit to the Congress within 30 days fiom the opening of regular session of Congress a budget of ‘expenditures and sources of financing, including receipts from existing and proposed revenue measures a. Budget Preparation | /} b. Budget Legislation or Authorization 2nd c. Budget Execution 3c! d. Budget Accountability 4h 8720Page 2 7. Itrefers to the second step in the government budgetary process which involves the enactment by the Congress of the General Appropriation Act (GAA) based on the budget submitted by the President which cannot be increased by the Congress. The initiative for the enactment of the appropriation law shall come from the louse of Representatives. a, Budget Preparation b. Budget Legislation or Authorization , ¢. Budget Execution d. Budget Accountability 8. It refers to the third step in the government budgetary process which involves that implementation of the general appropriation act which includes the release of revenue allotment under the supervision of Department of Budget and Management. a. Budget Preparation b. Budget Legislation or Authorization ©. Budget Execution d. Budget Accountability 9. It refers to the final step in the government budgetary process which involves the submission of proper documentary reports by responsible officer, liquidation of expenditures and audit conducted by Commission on Audit to ensure the public funds are spent in accordance with the appropriation act. a, Budget Preparation b. Budget Legislation or Authorization c. Budget Execution a ‘Budget Accountability 10. Under the Government Accounting Manual (GAM), 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 National Government Agencies (NGAs), Bureau of the ‘Lreasury (Bir), Department of Budget and Management (DBM), and the Commission on Audit (COA). Which of the following is incorrect under the Government ‘Accounting Manual? a, Each entity of the National Government (NG) maintains complete set of accounting books by fund cluster which is reconciled with the records of cash transactions maintained by the BIr. b. The BTr accounts for the cash, public debt and related transactions of the NG. c. Each entity maintains budget registries which are reconciled with the budget records maintained by the DBM and the Government Accountancy Sector (GAS), COA. d. 11, The General Accounting Manual enumerates the following components of the General " Purpose Financial Statements of National Government Agencies, except a. Statement of Financial Position b, Statement of Financial Performance ‘Statement of Cash Flows i Statement of Changes in Net Assets/Equity Statement of Comparison of Budget and Actual Amounts ‘ Notes to the Financial Statements, comprising a summary of significant accounting policies and other explanatory notes. 8720 © me a9Page 3 12. The b c eae Nation Government Agencies under the GAM shall consist of the General Journal Cash Receipts Journal Cash Disbursement Journal and National Government Books Check Disbursements Journal General Ledgers Subsidiary Ledgers ge mene se 13. The registries of National Government Agencies under the GAM shall consist of the following, except Registries of Revenue and Other Receipts. (RROR) Registry of Appropriations and Allotments. (RAPAL) Registries of Allotments, Obligations and Disbursements (RAOD) Registries of Budget, Utilization and Disbursements (RBUD) Registries of Priority Development Assistant Program (RPDAP) 14, Itrofers to the registry maintained by NGA unit to monitor the revenue and other receipts estimated/budgeted, collected and remitted/deposited. ———SSSSsS—~S~S a. Registries of Revenue and Other Receipts. (RROR) b. Registry of Appropriations and Allotments. (RAPAL) c. Registries of Allotments, Obligations and Disbursements (RAOD) @_ Registries of Budget, Utilization and Disbursements (RBUD) ppogPe 15. It refers to registry maintained by NGA unit to show the original, supplemental and final budget for the year and all allotments received charged against the corresponding appropriation. a. Registries of Revenue and Other Receipts. (RROR) : =e =e c. Registries of Allotments, Obligations and Disbursements (RAOD) 4d. Registries of Budget, Utilization and Disbursements (RBUD) 16. It refers to registry maintained by NGA. unit to show the allotments received for the r, obligations incurred against the corresponding allotment and the actual disbursements, a a. Registries of Revenue and Other Receipts. (RROR) b._ Registry of Appropriations and Allotments. (RAPAL) » eceraene : okt ih 5 4. Registries of Budget, Utilization and Disbursements (RBUD) 17. It reters to registry maintained by NGA unit to record the approved special budget and the corresponding utilizations and disbursements charged to retained income authorized under the law and other retained income collection of a national government agency with similar authority. a. Registries of Revenue and Other Receipts. (RROR) b. Registry of Appropriations and Allotments. (RAPAL) c._ Registries of Allotments, Obligations and Disbursements (RAOD) a 18, The following are the classifications of different RAPAL, RAOD and RBUD, except RAPAL/RAOD/RBUD — Personal Services RAPAL/RAOD/RBUD ~ Maintenance and Other Operating Expenses RAPAL/RAOD/RBUD - Financial Expenses Egiepepopner = gu Outlays sange 8720Page 4 19. Which of the following statements concerning the period of validity of Notice of ‘Cash Allocations (NCAS) is incorrect? or a NCA issued and credited to the Regular MDS Sub-Accounts of agencies/OUs for their regular operations, shall be valid until the last working day of the 3rd month of that quarter pursuant to DBM Circular Letter (CL) No. 2013-12. b. NCA issued and credited to the Special MDS Accounts of agencies specifically for payment ‘of RGITL benefits shall be valid until the last working day of the following month when the NCA was issued, except when issued in December, pursuant to DBM Budget Circular No. 2013-1 ¢. NCA issued for trust receipts and credited to the Trust MDS Account of agencies shall be valid until the last working day of the year. 4. NCA issued to the BTr for working funds of agencies shall be valid until the last working day of the year. &. NCA, regardless of source, shal be valid only fora period of i-month from the date of | receipt. 20. On December 31, 2018, the Department of Finance billed its lessee on one of its buildings in the amount of P10,000. On January 31, 2019, the Department of Finance collected all of the accounts receivable. On February 28, 2019, the Department of Finance remitted the entire collected amount to the Bureau of Treasury. What is the journal entry to record the remittance by the Department of Finance to the Bureau of Treasury? Debit ~ Accounts Receivable P10,000 and Credit ~ Rent Income P10,000 Debit ~ Accounts Receivable P10,000 and Credit ~ Retained Earnings P10,000 Debit — Cash Collecting Officers P 10,000 and Credit — Accounts Receivable P 10,000 Debit ~Cash —T 0 it, Regular —P10,000/ and Credit Cash—Collecting, ;~P10,000 aese On January 1, 2018, the Department of Public Works and Highways (DPWH) received a P10,000,000 appropriation from the national government for the acquisition of machinery. On February 1, 2018, DPWH received the allotment from the Department of Budget and Management. On March 1, 2018, DPWH entered into a contract with CAT Inc. for the acquisition of the machinery with a price of P8,000,000. On April 1, 2018, DPWH received the Notice of Cash Allocation fom Department of Budget and Management net of 1% withholding tax for income tax of supplier and 5% withholding of Final Tax on VAT of supplier. On May 1, 2018, CAT Inc, delivered the machinery to DPWH. On June 1, 2018, DPWH paid the obligation to CAT Inc. On July 1, 2018, DPWH remitted the withheld income tax and final VAT to BIR. 2 What is the journal entry on March 1, 2018? a. No entry but just posting to appropriate RAPAL b. No entry but just posting to appropriate RAPAL and to RAOD c ‘Nai Ub Sa Sta a a leg ‘RAOD | d. Debit Machinery P8,000,000 and credit Accounts Payable P8,000,000 2, Using the same data on number 21, what is the journal entry on April 1, 2018? a a ae 7 Cr Sc NR Debit Machinery P8,000,000 and Credit Accounts Payable P8,000,000 Debit Accounts Payable P8,000,000 and Credit Due to BIR P480,000 and Cash- MDS, Regular P7,520,000. d. Debit Due to BIR P480,000 and Credit Subsidy Income from National Government P480,000. osPage 5 23. ibe salary accountant of DENR provided the following data concerning the salaries ofits officers and Employees for the month ended December 31, 2016 Salaries and wages Ep. 000 Personal Heonomic Relief Allowance (PERA) Gross compensation Withholding income tax GsIs PAG-IBIG Phithealth FaRTD00 Net -PAB7,990 DENR received the notice of cash allocation from the DBM net of 10% tax on basic salary. Afterwards, DENR granted cash advance to the cashier for the payroll. Afterwards, the DENR cashier paid the employees and submitted the liquidation report of the payroll fund with the Corresponding supporting documents. Afterwards, DENK remitted the withheld tax to BLK and the withheld contribution to GSIS, PAG-IBIG and Philhealth What is the journal entry to recognize grant of cash advance to the cashier for the payroll? a. Cash — MDS, Regular 508,500 Subsidy Income from National Government 508,500 b. Salaries and Wages Regular 510,000 PERA 55,000 Due to BIR 51,000 Due to GSIS 15,300 Due to PAG-IRIG 10,200 Due to Philhealth 510 Due to officers and employees 7990 c. for payroll 487,990 a / 487,990, d. Due to officers and employees 487,990 Advances for payroll 487,990 e. DuetoBIR 51,000 ‘Subsidy Income from National Government * 51,000 f. Due to GSIS 15,300 Due to PAG-IBIG 10,200 Due to Phithealth S10 Cash — MDS, Regular 26,010 24. Department of Health (DOH) received Notice of Cash Allocation in the amount of P100,000 from Department of Budget and Management, DOH made a total cash disbursements in the amount of P95,000. What is the journal entry to recognize reversion of unused Notice of Cash Allocation by DOH in its books? 4 Sa b. Debit Retained Harnings of DEA P5,000 and credit Cash-MDS, Regular P5,000. ¢. Debit Expenses of DFA P5,000 and credit Cash-MDS, Regular P5,000. d. Debit Investment of DFA P5,000 and credit Cash-MDS, Regular P5,000. 8720Page 6 25. Which of the following closing entries in the accounting book of Department of Tourism is incorrect if the following data are provided by its chief accountant? Total Income, aside from SING P1,598,000 Total expenses 791,652 Total Subsidy Income from National Government 1,181,882 a. Income account other than SING 1,598,000 Revenue and Expense Summary account 1,598,000 b, Revenue and Expense Summary account 791,652 Expense account 791,652 cc. Subsidy Income from National Government 1,181,882 Revenue and Expense Summary Account 1,181,882 Revenue and Expense Summary Account 1,988,230 Accumulated Surplus/(Deficit) 1,988,230 “ws SY amas 26. On January 31, 2016, the collecting officer of Bureau of Customs collected P350,000 import duties plus fines of P10,000 on the goods of an importer. On February 28, 2016, the Bureau of Customs remitted the P350,000 to the Bureau of Treasury. What is the journal entry to record the collection of the import duties and fines? ¢ b. Debit Cash-Lreasury/Agency Deposit, Regular P360,000 and Credit Cash-Collecting Officer 360,000. ©. Debit Cash-Treasury/Agency Deposit, Regular P360,000 and Credit Import Duties P3S0,000 and Fines/Penalties P10,000. w 27. Using the same data in number 26, but assuming the it imme issn P10000 es hough Authored Age Banks ined customer collecting officer, what is the journal entry to iy qi 29. 31 32. Page The Department, of National Defense obtained a loan from Asian Development Bank to finance the acquisition of Philippine’s first aircraft carrier. The principal of the loan is $1B. What is the journal entry in the accounting book of Bureau of Treasury to record the receipt of loan proceeds based on credit advice from BSP? a. Debit Cash in Bank, Local Bank or BSP $1B and Credit Cash- Treasury/Agency Deposit, Regular $1B. b. Debit Cash in Bank, Foreign Currency BSP $1B and Credit Loans Payable-, Foreign $1B. ¢. Debit Cash in Bank, Foreign Currency BSP $1B and Credit Subsidy Income From Asian Development Bank $1B. d. Debit Cash in Bank, Foreign Currency BSP $1B and Credit Capital Account, ADB $1B. On February 1, 2016, the Department of Health received P10M cash from PLD for medical expenses of victims of calamities. The collection of the P10M donation is considered as authorized special account. DOH remitted the donation to the Bureau of Treasury on March 1, 2016. What is the journal entry on March 1, 2016 in the accounting book of DOH? a. Debit Cash-Collecting Officer P10M and Credit Medical Fees P10M. b. Debit Cash-'lreasury/Agency Deposit Special Account P10M and Credit Cash-Collecting Officers P10M. ¢. Debit Cash in Bank-Local Currency, Savings Account P10M and Credit- Treasury/Agency Deposit, Special Account P10M d. Debit Cash-Treasury/Agency Deposit P1OM and Credit Medical Fees P10M. On September 1, 2016 $10M donation 1s deposited directly by United Nations World Health Organization to the Bureau of Treasury to help Philippine government battle Zika Virus. What is the journal entry in the accounting book of Bureau of Treasury to record the receipt of grants or donation from UN-WHO? a, Debit Cash in Bank, Foreign Currency Savings Deposit $10M and Credit Income from Grants and Donations $10M. b. Debit Cash Collecting Officer $10M and Credit Income from Grants and Donations $10M. c. Debit Cash in Bank, Foreign Currency Savings Deposit $10M and Credit Loans Payable $10M. d. Debit Cash Collecting Officer $10M and Credit Ordinary Share, UN WHO $10M. On February 1, 2016, the Department of Environment and Natural Resources (DENR) transferred P450,000 fund to Department of Public Works and Highway (DPWH) for the construction of DENR’s irrigation project. The P450,000 fund was then remitted by DPWH to Bureau of Treasury on May 1, 2016. The project was completed and turned over by DPWH to DENR on October 31, 2016. What is the journal entry in DENR’s book to record the transfer of funds on February 1, 2016? a. Debit Due from DPWH P450,000 and Credit Cash, MDS, Regular P450,000. b. Debit Cash-Treasury/Agency Deposit/Trust P450,000 and Credit Cash-Collecting Officers P450,000. c. Debit Cash Collecting Officers P450,000 and Credit Due to DENR P450,000 d. Debit Cash-Treasury/Agency Deposit/Trust P450,000 and Credit Cash-Collecting Officers P450,000. 872033. Using the same data in number 32, what is the journal entry of DPWH to record the turnover of the irrigation project to DENR on October 31, 2016? a. Debit Due to DENR P450,000 and Credit PPE Account P450,000 b. Debit PPE Account P450,000 and Credit Due from DPWH P450,000. c. Debit Due to DENR P450,000 and Credit Cash-Collecting Officer P450,000 d. Debit Cash Collecting Officer P450,000 and Credit Due from DPWH P450,000.