AFAR 3 Assessment/Final Examination

Name________________________ Student Number___________ Score__________

Multiple Choices
Instructions: Write the letter of your choice in each number below:

1. 16. 31. 46.

2. 17. 32. 47.
3. 18. 33. 48.
4. 19. 34. 49.
5. 20. 35. 50.
6. 21. 36. 51.
7. 22. 37. 52.
8. 23. 38. 53.
9. 24. 39. 54.
10. 25. 40. 55.
11. 26. 41. 56.
12. 27. 42. 57.
13. 28. 43. 58.
14. 29. 44. 59.
15. 30. 45 60.

1. What is the legal basis of the COA in promulgating the GAM for NGAs?

a. P. D. No. 1445, State Audit Code of the Philippines

b. The Philippine Constitution
c. R.A. 9298, The Philippine Accountancy act of 2004.
d. Philippine Public Sector Accountancy Standards (PPSAS).

2. Which of the following is tasked in keeping the general accounts of the government, supporting
vouchers, and other documents?

a. COA b. DBM c. NGAs d. Congress

3. Which of the following is a unique requirement of the government accounting that is not required in
the accounting for business?

a. The use of double-entry recording system

b. The use of single-entry recording system.
c. The use of accrual basis of accounting.
d. The presentation of budget information in the financial statements.

4. According to the GAM for NGAs, the basis of accounting to be applied by government entities is the

a. cash basis
b. Accrual basis
c. Modifies accrual basis
d. Any of these as a policy choice.
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5. Government resources must be utilized efficiently and effectively in accordance with law. According to
P.D. No. 1445, who is directly responsible in implementing this policy?

a. All employees who are entrusted with the possession of government resources.
b. The head of the government agency.
c. the COA
d. All elected officials

6. The Bureau of Treasury (BTR) is responsible for

a. promulgating accounting and auditing rules and regulations.

b. the formulation and implementation of 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 disbursement thereof.
d. directly implementing the projects of the government.

7. The transfer of government funds from one officer to another requires the prior authorization of the

a. Commission on Audit
b. Head of the Agency
c. The President of the Republic of the Philippines
d. Bureau of Treasury

8. Information losses this qualitative characteristics if it is not reported on a timely basis.

a. Relevance b. Reliability c. Neutrality d. materiality

9. Which of the following is not one of the fund clusters of a government entity?

a. Regular Agency Fund

b. Foreign Assisted Projects Fund
c. Business Related Funds
d. Petty Cash Fund

10. Which of the following is not a source of revenue for the government?

a. taxes
b. Fees collected by government agencies
c. grants and donations from other governments
d. Contracts price on government contracts awarded to private companies.

11. Which of the following is not charged with government accounting responsibility under GAM for
NGAs?

a. COA b. DBM c. NGAs House of Representatives

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12. Which of the following is not one of the objectives of the GAM for NGAs?

a. to harmonize government accounting standards with international standards.

b. To update the coding structure of accounts
c. to update accounting books, registries, records, forms, reports and financial statements
d. to update government accounting standards to be consistent with the provisions of U.S.GAAP.

13. All of the following are requirements peculiar to a government entity. Which is not?

a. Presenting budget information in the financial statements

b. Fund cluster accounting
c. Incorporating budgetary control in the financial reporting
d. Accrual basis of accounting

14. Which of the following does not properly describe the budget process used in the Philippines?

a. Bottom-up budgeting c. Zero-based budgeting

b. Top-down budgeting d. Non-incremental budgeting

15. Arrange the following steps according to the sequence that they appear in the budget cycle.

I. Allotment
II. Bicameral deliberation
III. Budget accountability reports
IV. President’s enactment of the GAA
V. Budget hearings with the DBM

a. V, IV, II, I and III c. II,V,II,IV,and III

b. V,II,IV,I and III d. V,I,II,IV and III

16. This type of budget is prepared in such a way that estimated revenues exceed estimated
expenditures.

a. Balanced budget c. Obligation budget

b. Excess budget d. Budget meal

17. It is an authorization issued by the DBM to NGAs to incur obligation. It is also referred to as Obligation
Authority.

a. Appropriation c. Budget call

b. Allotment d. Budget hearings

18. It refers to the amount contracted by duly authorized administrative officer for which the government
is held liable.

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 a. Appropriation c. Obligation
b. Allotment d. Disbursement

19. Disbursement by government entities are most commonly made through

a. MDS Checks c. Petty cash Fund

b. Cash d. Credit card

20. This summarizes an agency’s fiscal year plans and performance targets. It shows the agency’s physical
and financial plan, monthly cash program, estimate of monthly income, and list of obligations that are not
yet due and demandable.

a. Budget Execution Documents (BEDs)

b. Special Allotment Release Order
c. Statement of Approved Budget, Utilization Disbursement and Balances
d. Aging Due and Demandable Obligations

21. A document outlines the priority areas of government activity applicable to the budget year.

a. Budget Call b. Budget Calendar 3. Budget Message 4.Budget Proposal

22. Per Unified Accounts Codes Structure (UACS), Constitutional office, the Judiciary and the legislature
are categorized as:

a. Agency b. Department c. Lower-level operating unit d. Sub-agency

23. The final step of the budget execution phase.

a. Disbursement b. Accountability c. Allotment release d. Cash Allocation

24. The component of budget Accountability Reports (BARs) that should be reported on monthly basis.

a. Estimate of monthly income

b. Statement of allotments, obligations and balances
c. Monthly cash Program
d. List not yet due and demandable obligation

25. The basis of accounting under international point of view according to International Public Sectors
Accounting Standards Board (IPSASB).

a. Accrual basis b. Strict accrual c. Accrual and cash basis d. Cash basis

26. No money shall be paid out of National Treasury except in pursuance of

a. Fund b. Appropriation c. Budget d. President’s executive order

27. Fund available for any purpose that congress may choose to apply and composed of all receipts or
revenues that do not otherwise accrue to other funds.

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 a. Custodial fund b. General Fund c. Off-budgetary fund d, Revolving fund

28. Location Codes is a nine-digit code to reflect different area following the Philippine Standard
Geographic Code prescribed by the National Statistic Coordination Board. Which of the following area is
not covered by the Location Codes under UACS?

a. Street b Barangay c. Province d. Municipality

29. A disbursement authority issued by DBM to departments with overseas operations allowing them to
use income collected by their foreign posts to their operating requirements.

a. Notice of Cash Allocation

b. Non-Cash Availment Authority (NCAA)
c. Cash release program (CRP)
d. Cash disbursement ceiling (CDC)

30. A statement of estimated receipts and estimated expenses at the government, which serves as basis
for a General Appropriation Act.

a. National government budget c. Statement of financial position

b. Local government budget d. Statement of operations

31. The budget execution document that serves as an overall plan of the government agency
encompassing the targeted outputs and estimated obligations broken down by quarter.

a. Estimate of monthly income

b. Physical and financial plan
c. Monthly cash Program
d. List not yet due and demandable obligation

32. The Organizations Codes is one of the key elements of Unified Accounts Codes Structure (UACS).
Which of the following is not one of those reflected by this element?

a. Agency c. Operating Unit

b. Department d. Government –Owned and Controlled Corporation

33. The main function is the availability and appropriation of funds for public services.

a. Department of Finance
b. Department of Treasury
c. Commission on Audit
d. National Budget System

34. The adoption of the Revised Chart of Accounts for national Government Agencies, the account code
structure consists of how many mandatory digits?

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 a. Three digits b. Four digits c. Five digits d. Eight digits

35. The authority of the regional and operating units to pay their operating expenses, purchases of
supplies and materials, acquisition of PPE, accounts payable, and other authorized disbursement through
the issue of MDS checks, ADA or other modes of disbursements.

a. Appropriation c. Allotments
b. Notice of cash allocation d. Notice of transfer of allocation

36. Which prescribes the financial statements of not-for-profit organizations, reporting reclassifications is
caused by which of the following?
I. Expiration of donor-imposed conditions.
II. Expiration of donor-imposed restrictions.

a. I only b. Both I and II c. II only d. Neither I or II

37. Unconditional promises to give are recognized as contribution revenue when:

a. The promised is received c. The time or purpose restriction is satisfied

b. The related receivable is collected d. The future event that binds the promisor occurs

38. How will a nongovernment, not-for-profit entity record an agency transaction in which it receives
resources?

a. No entry is mode in the accounts

b. Debit the asset account and credit a liability account
c. Debit the asset account and credit contribution revenue
d. Debit the asset account and credit temporary restricted net assets

39. Financial statement of Not-for-Profit Organization, focuses on:

a. Basic information for the organization as a whole

b. Standardization of funds nomenclature
c. Distinction between current fund and noncurrent fund.
d. Inherent differences of not-for-profit organizations that impact reporting presentations

40. In preparing the statement of cash flows for a nongovernment, not-for-profit entity, cash
contributions that are restricted for long-term proposes are classified as:

a. Operating activities c. Financing activities

b. Investing activities d. Capital and related financing activities

41. A statement of financial position (balance sheet), which reports unrestricted temporarily restricted,
and permanently restricted net assets, is required for which one of the following organization?
I. A public university
II. A private, not-for-profit hospital

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 a. Both I and II c. Neither I nor II
b. I only d. II only

42. Which prescribes the financial statements of not-for-profit organizations, reporting reclassifications is
caused by which of the following?
I. Expiration of donor-imposed conditions.
II. Expiration of donor-imposed restrictions.

a. I only c. II only
b. Both I and II d. Neither I nor II

43. Catarman Doctor’s Hospital received an unrestricted bequest of P 150,000 in 2020. This bequest
should be recorded as

a. A memorandum entry only.

b. Other operating revenue of P 150,000.
c. Non-operating revenue of P 150,000.
d. A direct credit of P 150,000 to the fund balance.

44. The property, plant, and equipment of a not-for-profit hospital should be accounted for as part of

a. Unrestricted funds
b. Restricted funds
c. Specific purpose funds
d. Other non-operating funds

45. Equipment donated for use in a hospital should be reported as

a. Other operating revenues

b. Non-operating revenues
c. Additions to the unrestricted funds balance
d. Additions to the restricted funds balance

46. Revenue from the parking lot operated by a hospital would normally be included in

a. Patient service revenue

b. Ancillary service revenue
c. Other operating revenue
d. Other non-operating revenue

47. Quezon City’s community hospital, which uses enterprise fund reporting, normally includes proceeds
from sale of cafeteria meals in

a. Patient service revenues

b. Other operating revenues
c. Ancillary service revenues
d. Deductions from dietary service expenses

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48. Revenue of a hospital from grants specified by the donor for research would normally be included in

a. Other non-operating revenue

b. Other operating revenue
c. Patient service revenue
d. Ancillary service revenue

49. A hospital should report earnings from endowment funds that are restricted to a specific operating
purpose as
a. Contribution Revenue – Unrestricted, when expended
b. Contribution Revenue – Unrestricted revenues, when expended
c. Contribution Revenue – Unrestricted, when received
d. Contribution Revenue – Permanent revenues, when received

50. In addition to the statement of changes in changes in net assets, which of the following financial
statement should not-for-profit hospital prepare?

a. Balance sheet and income statement

b. Balance sheet, income statement, and statement of changes in financial position.

c. Balance sheet, statement of operations, and statement of cash flows.
d. Statement of funds, statement of operations, and statement of cash flows

51. On January 2, 2021, a graduate of Ateneo established a permanent trust fund and appointed
Metrobank as the trustee. The income from the trust fund is to be paid Ateneo and used only by the
school of education to support student scholarships. What entry is required on Ateneo’s books to record
the receipts of cash from the interest on the trust fund?

a. Debit cash and credit deferred revenue

b. Debit cash and credit contribution revenue- temporary
c. Debit cash and credit endowment fund balance
d. Debit cash and credit unrestricted endowment revenue

52. A college’s plant funds group includes which of the following subgroup?
I. Renewals and replacement funds
II. Retirement of indebtedness funds
III. Restricted current funds

a. I and II b. I and III c. II and III d. I only

53. A donor makes a documented promise to contribute to habitat for humanity. Increases in the present
value of this promise

a. are not reported

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 b. increase unrestricted net assets
c. increase permanently restricted net assets
d. increase temporary restricted net assets

54. A not-for-profit Organization present their expenses in what categories?

a. Operating and non-operating

b. Salaries, Utilities, and programs
c. Programs, administrative, and fund-raising
d. Unrestricted, temporary restricted, and permanently restricted

55. A cash contribution that is in the form of a permanent endowment is categorized in a not-for-profit’s
statement of cash flows as:

a. Cash from operating activities

b. Cash from financing activities
c. Cash from investing activities
d. Supplementary investing and financing activities

56. The statement of financial position of a not-for-profit organization has the following major
classifications:

a. Assets, liabilities, and net assets

b. Current funds, restricted funds, liabilities and unrestricted funds
c. Current assets, noncurrent assets, and net assets
d. Unrestricted assets, restricted assets, liabilities, and equity

57. During 2021, UST Hospital purchased medicines for hospital use totalling P800,000. Included in this
P800,00 was an invoice of P10,000 that was cancelled in 2015 by the vendor because the vendor wished
to donate this medicine to UST. Tis donation of medicine should be recorded as

a. A P10,000 reduction of medicine expenses

b. An increase in other operating revenue of P10,000
c. A direct P10,000 credit to the general (unrestricted) funds balance.
d. A P10,000 credit to restricted funds balance.

58. What is the entry to record the collection of a P20,000,000 corporate income tax by the BIR in its
agency books?

a. Memo entry
b. Cash Collecting Officer 20,000,000
Income Tax – Corporation 20,000,000
c. Cash – MDS – Regular 20,000,000
Income Tax – Corporation 20,000,000
d. Income Tax – Corporation 20,000,000
Cash Collecting Officer 20,000,000

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59. What is the entry on the Agency books to record BIR’s remittance of the same collection to the BTr?

a. Memo entry
b. Cash Collecting Officer 20,000,000
Income Tax – Corporation 20,000,000
c. Cash – MDS – Regular 20,000,000
Income Tax – Corporation 20,000,000
d. Income Tax – Corporation 20,000,000
Cash Collecting Officer 20,000,000

60. Agency XYZ receive Notice of Cash Allocation (NCA) – P50,000,000 for the year 2021; the entry would
be:
a. No entry
b. Memorandum entry in Registry of Allotments and Obligations
c. National Clearing Account 50,000,000
Appropriation Allotted 50,000,000
d. Cash – Modified Disbursement System-Regular 50,000,000
Subsidy from National government 50,000,000

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