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Quizziz Midterm Exam
Questions Answers
- The carrying amount of inventory is not recognized as expense in this type of event or transaction.
The inventory is used in the production of another asset.
- The President’s explanation of the country’s fiscal policy and budget priorities is contained in a document called the
President’s Budget Message
- All of the above involves the physical transfer of cash except
Remittance of taxes through the Tax Remittance Advice<br /> 4. The initial testing costs incurred on an item of property, plant and equipment are
capitalized after deducting the disposal proceeds of samples generated during testing. 5. The GAM for NGAs aims to update all of the following except
rules and regulations regarding the filing and payment of taxes by government employees 6. Which of the following may qualify as investment property?
An agricultural land purchased for appreciation purposes 7. The journal entry to record the collection of unbilled tax revenue (e., Travel Tax) through direct deposit in Authorized Agent Banks is<br />
Dr) Cash-Treasury/Agency Deposit, Regular. Cr)Travel Tax<br />
- Entity A acquires equipment from a supplier, on account. A lender settles the account of Entity A by directly paying the supplier the proceeds of a loan payable that is recorded in the BTr’s books. This mode of disbursement is called
Non-Cash Availment Authority (NCAA)<br />
- Entity A, a government entity, records purchases of items of inventory under the “Purchases” account and freight-in under the “Freight-in” account. Which of the following statements is correct?
Entity A is not compliant with the requirements of GAM for NGAs.
- According to the GAM for NGAs, revenue from exchange transactions are measured at the amount of cash received.
False
- It is a report that is prepared for the purpose of bringing the balances of cash per records and per bank statement into agreement.
bank reconciliation statement
- This refers to charges for the use of cash or cash equivalents, or amounts due to the entity.
Interest income
- Under this inventory system, purchases, sales, and other transactions affecting inventory are recorded in the “inventory” and “cost of sales” accounts, as appropriate. Moreover, stock cards and stock ledgers are maintained.<br />
Perpetual inventory system
- Which of the following is not one of the registries maintained by a government entity?
Registries of Journals and Ledgers
- This account is debited when government Cash-Treasury/Agency
entities remit collections to the National Treasury.
Deposit, Regular
- If the unadjusted balance of cash per bank statement is greater than the adjusted balance and there no other reconciling items or errors, the difference would most certainly be caused by a
Outstanding checks
- It is a type of fund held by a government entity that is designated for special purposes.
Special fund
- This approach to budgeting requires the justification of items in the budget irrespective of whether they are new or carried over from the previous year.
Zero-based budgeting
- All of the following may cause the cancellation of a check drawn by a government entity except
The check is dishonored.
- Entity A is a government hospital. Entity A would most likely recognize revenue from services rendered to a patient
when the services are rendered and the patient is billed.<br /> 21. Which of the following transactions is not recorded through a credit to the “Cash- Modified Disbursement System (MDS), Regular” account?<br />
Constructive remittance of taxes withheld to the BIR.
- The receipt of subsidy from the national government or other government agencies
gives rise to the recognition of revenue 23. These refer to transactions in which one entity receives assets or services, or has liabilities extinguished, and directly gives approximately equal value to another entity in exchange.
Exchange transactions
- Entity A, a government entity, has an unused NCA of ₱50,000 at the end of the current year. The entry to record the reversion of unused NCA is
Dr) Subsidy from National Government Cr) Cash- Modified Disbursement System (MDS), Regular<br /> 25. Which of the following statements is incorrect regarding the GAM for NGAs?
The DBM accounts for the cash, public debt and related transactions of the NG. 26. The GAM for NGAs is promulgated by the Commission on Audit (COA) 27. According to the PPSAS, a financial asset is recognized when
an entity becomes a party to the contractual provisions of the instrument. 28. The basis of accounting required by the GAM for NGAs is<br />
Accrual basis
- Entity A, a government entity, purchases office supplies. Entity A would most likely record the purchase
as Inventory Held for Consumption
- Who owns the goods in transit under FOB shipping point?
Buyer
- Which of the following statements best describes the various Registries maintained by government entities?
The Registries primarily serve as an internal control for controlling and monitoring the conformance of actual results with the approved budget. 32. Which of the following statements is incorrect regarding the accounting for unreleased
Unreleased checks are physically cancelled.
the disbursement of government funds is incorrect?
authorized to travel shall be granted cash advance to cover traveling expenses. The amount granted shall be accounted for as “Due to Officers and Employees.” 49. Which of the following is one of the Fundamental Principles for Revenue under the GAM for NGAs?
No payment of any nature shall be received by a collecting officer without immediately issuing an official receipt in acknowledgement thereof. The receipt may be in the form of postage, internal revenue or documentary stamps and the like, officially numbered receipts, subject to proper custody, accountability, and audit. 50. It is an authority issued by an agency’s Central Office to its regional and operating units to cover the latter’s cash requirements.
Notice of Transfer of Allocation (NTA)
- Which of the following reflects a Non-Cash Availment Authority (NCAA) mode of disbursement?
Dr) Accounts Payable Cr)Subsidy from National Government 52. Which of the following is considered a biological asset?
Pig
- Which of the following measurement bases is acceptable for the subsequent measurement of an investment property held by a government entity?
cost less accumulated impairment losses
- Which of the following government agencies will most likely be able to obtain a disbursement authority in the form of Cash Disbursement Ceiling (CDC)?
DOLE
- This accounting concept is necessary so that users can use information in the financial statements in noting differences and similarities between those information presented and information from other sources that the user may have.
Comparability
- Entity A, a government entity, grants a ₱10,000 cash advance for the travelling expenses of an employee. The employee liquidates ₱8,000 of the cash advance and remits the excess cash advance of ₱2,000. After recording the grant of cash advance and the liquidation thereof but before adjustment for the collection of the excess cash advance, how much is the recorded expense in the books of accounts?
₱8,
- The constructive remittance of taxes withheld through the TRA gives rise to the recognition of revenue.
true
- Which of the following statements is correct regarding investment properties?
A building being rented out to the entity’s employees who are paying rentals at market
rates is not an investment property. 59. The distinguishing characteristic that identifies an investment property from the other assets of an entity is?
Generates separately identifiable cash flows from the other assets of the entity. 60. It is an authority issued by an agency’s Central Office to its regional and operating units to cover the latter’s cash requirements.
Used in the production of goods.
- Which of the following would result to an increase or decrease in the revenue reported by a government' 'entity in its statement of financial performance?
The repayment of a loan payable is forgiven.
- Which of the following is not one of the Fundamental Principles for Disbursement of Public Funds under the GAM for NGAs?
Fiscal responsibility shall, to the greatest extent, be assumed solely by the Head of the government agency. 63. When cash flows are deferred, the fair value of the consideration receivable is its present value.
True
- Which of the following statements is correct regarding the Fundamental Principles for Disbursement of Public Funds under P. No. 1445?
Trust funds shall be available and may be spent only for the specific purpose for which the trust was created or the funds received. 65. Which of the following does not qualify as cash equivalent for a government entity?
Money market placement with an original term of 3 months. 66. Which of the following documents is prepared when issuing semi-expendable property to end-users?
Inventory Custodian Slip
- The Commission on Audit (COA) is responsible for
promulgating accounting and auditing rules and regulations. 68. Which of the following is not charged with government accounting responsibility?
Non-stock, non-profit private hospital 69. According to the GAM for NGAs, cash disbursements are made through
cash advances to authorized personnel 70. Which of the following modes of disbursements would result to the recognition of a loan payable in books of the BTr?
NCAA
- Which of the following items are classified by a government entity as Inventory Held for Consumption?
Office supplies and similar materials.
- Which of the following may be capitalized as cost of property, plant and equipment?
Professional fees
- Which of the following may not be included as part of cash in the note disclosures?
Treasury bills acquired 3 months before maturity date 74. Entity A, a government entity, receives its ₱9M allotment. The journal entry to record this event is
No journal entry.
- The issuer of a financial instrument shall classify the instrument, or its component parts, on initial recognition as a
any of these
- The taxable event for Value added tax (VAT) is the a undertaking of
taxable activity.
- Entity A estimates a risk of loss on a Risk management
1. OVERVIEW OF GOVERNMENT ACCOUNTING
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.
Government accounting
The GAM for NGAs is promulgated by the Commission on Audit (COA)
The Commission on Audit (COA) is responsible for
promulgating accounting and auditing rules and regulations.
Which of the following is not charged with government accounting responsibility?
Non-stock, non-profit private hospital
Which of the following qualitative characteristics may be sacrificed when reporting information on a timely basis?
Reliability
According to the GAM for NGAs, information has this qualitative characteristic if it can be used to assist in
evaluating past, present or future events or in confirming or correcting past evaluations.
Relevance
This refers to the comparability between the financial statements of different entities?
Inter-comparability
When the substance of a transaction or
event differs from its legal form, the entity should report the transaction’s or event’s Substance
The implication that users must be informed of the entity’s policies, changes to those policies, and the effects of those changes refers to
Comparability
In the financial reporting system of the national government, to which of the
following shall an entity reconcile its cash
records?
Bureau of Treasury
2. BUDGET PROCESS & GOVERNMENT ACCOUNTING PROCESS
Which of the following approaches to budget preparation provides the best internal control?
Zero-based budgeting
This approach to budgeting requires the justification of items in the budget
irrespective of whether they are new or
carried over from the previous year.
Zero-based budgeting
Which of the following is correct
regarding zero-based budgeting?
The current year’s budget is formulated with regard to the previous year’s budget
Which of the following would most likely
come first in the budget process?
Budget call to DBM
Which of the following would most likely
come last in the budget process?
Performance review
Entity A, a government entity, receives
authorization to disburse funds not to
exceed ₱1B in a specified period. This event can be described as
Notice of cash allocation
Entity A, a government entity, receives notice that out of its ₱10B approved budget for the year, Entity A can incur
obligations up to ₱4B in the first quarter. This event can be described as
Allotment
Entity A, a government entity, receives notice that for the current year, the
maximum amount it can spend on maintenance and other operating expenses is ₱10B. This event can be described as
Appropriation
After receiving its obligational authority
amounting to ₱4B, Entity A enters into binding agreements for the eventual payments of a total sum of ₱3B. The “₱3B” event can be described as
Obligation
It is a part, segment, unit or function of a
government agency, headed by a manager, who is accountable for a
specified set of activities.
Responsibility center
4. GOV REVENUES AND OTHER RECEIPTS
Government entities and business entities use the same accounting treatment for all of the following except
Remittance of taxes withheld to the BIR
Which of the following does not give rise to revenue from assistance or subsidy
Inter-agency Fund Transfer
At the end of the period, the “Cash-Treasury/Agency Deposit, Regular” account is closed to the
Accumulated Surplus or Deficit Account
According to P 1445, all revenues of an entity shall be remitted to the National Treasury and included in the
General Fund
According to P 1445, Amounts received in trust and from business type activities of the government may be separately recorded.
The national government received a foreign grant conditioned on the construction of a public infrastructure. Entity A was chosen as the implementing agency. When the national government received the grant, the entry in the BTRs books included a
Credit to the “Other Deferred Credits” account
According to the GAM for NGAs revenue includes only those that are received or receivable by the entity in its own account. Accordingly, receipts on behalf of another entity are
Recorded as a liability
All of the following give rise to the recognition of revenue from non-exchange transaction except
Sale of goods
Remittances of collections to the National Treasury are recorded as a debit to which of the following accounts
Cash-Treasury/Agency Deposit, Regular
A government entity recognizes revenue from exchange or non- exchange transactions. Which of the following may not give rise to revenue by a government entity?
Receipt of free training and seminars regarding process technology on farming from an international organization
Questions Answers 1. An entity issues term bonds at a discount. If the bonds are subsequently measured at amortized cost, which of the following statements is not correct?
The carrying amount of the bonds decreases each period
- Provisions are never discounted to their present value.
false
- Transaction costs on issuing bonds are deducted from the initial carrying amount of the bonds
- The obligation under an onerous contract is recognized as a provision.
true
- Legal obligations arise only from law. false
- Which of the following distinguishes a provision from other types of liabilities?
A provision necessarily needs to be estimated because it is a liability of uncertain timing or amount. 7. A financial liability cannot arise from constructive obligation.
true
- Which of the following is not a financial liability? <br />Initial and subsequent mesurement
Due to BIR
- A provision is measured at<br /> the entity's best estimate of the settlement amount
- A provision is a liability of uncertain timing or amount.
true
- If one or more of the liability recognition criteria are not met, the item is a contingent liability.
true
- Financial liabilities, except financial liabilities classified to be subsequently measured at fair value through surplus or deficit, are initially measured at fair value plus transaction costs.
false
- Which of the following statements is correct regarding reimbursements of provisions?
The expense related to the provision may be presented in the statement of financial performance net of the reimbursement. 14. Which of the following is correct regarding contingent assets?
Contingent assets are only disclosed is probable. 15. A present obligation whose cost can be measured reliably but viih improbable outlow of resources embodying economic benefits or service potential is most likely to be
disclosed only
Questions Answers The Weyman Hospital, a private, not-for- profit institution, reported the following information:<br />Gross patient service revenue $1,000,000<br />Allowance for discounts to hospital employees 20,000<br />Bad debt expense 40,000<br />Contractual adjustments 100,000<br /><br />What amount should the hospital report as net patient service revenue?
880000
Which one of the following is not a required financial statement for a private voluntary health and welfare organization?
Statement of Fund Balance
Cash flows from a public university bookstore would appear on the statement of cash flows as
Cash flows from operations.
Which of the following types of health care organizations recognize depreciation expense? Investor-Owned; Not-for-Profit Organizations; Governmental Health Care
Yes yes yes
Which of the following transactions of a private voluntary health and welfare organization would increase temporarily restricted net assets in the statement of activities for the current year? I. Received a contribution of $20,000 from a donor in the current year who stipulated that the money not be spent until the following year. II. Spent $25,000 for fund raising during the current year from a donation from the previous year.
I Only
In November 20x1 Gilmore Heating and Air Conditioning Service repaired the air conditioning system for GenCare, a voluntary health and welfare organization and mailed an invoice for $3,000. On December 25, a note was received by GenCare indicating that Gilmore was canceling the invoice and that repairs were being donated. For the year ended, December 31, 20x1, GenCare should report these contributed services as:
An increase in unrestricted revenues and an increase in expenses on the statement of activities.
CIBA, a non-profit performing arts organization, received a contribution of a term endowment and a regular endowment. These endowments should be reported on the statement of activities
Temporarily restricted and Permanently restricted respectively
in Term Endowments and Regular Endowments as :
On December 30, 19X4, Leigh Museum, a not-for-profit organization, received a $7,000,000 donation of Day Co. shares with donor stipulated requirements as follows:<br />Shares valued at $5,000, are to be sold with the proceeds used to erect a public viewing building.<br />Shares valued at $2,000,000 are to be retained with the dividends used to support current operations.<br />Leigh adopted of FASB Statement No. 117, Financial Statements of Not-for-Profit Organizations. As a consequence of the receipt of the Day shares, how much should Leigh report as temporarily restricted net assets on its 19X4 statement of financial position?
5000000
Which of the following statements is incorrect?
The GAM for NGAs requires the Collecting Officer to issue an official receipt to acknowledge the receipt of the Notice of Cash Allocation.
Which of the following is a non-exchange transaction?
Collection of taxes
Which of the following is not an essential characteristic of a financial instrument?
It is subsequently measured at fair value.
A hospital has the following account balances:<br />Revenue from newsstand $ 50,000<br />Amounts charged to patients 800,000<br />Interest income 30,000<br />Salary expense – nurses 100,000<br />Bad debts 10,000<br />Undesignated gifts 80,000<br />Contractual adjustments 110,000<br />What is the hospital’s net patient service revenue?<br />
690000
Ellen College, a private not-for-profit institution, received a $100,000 grant for faculty research in 20x1. The grant money was not spent until 20x2. For 20x1, Ellen College should report the contribution as:
Temporarily restricted revenue.
Which of the following statements is incorrect?
Appropriation is also called obligational authority.
An NPO hospital has the following account balances:<br />Amount charged to patients $500,000<br />Revenue from newsstand 15,000<br
430000
answering this question)
This type of budget is prepared in such a way that estimated revenues exceed estimated expenditures.
Balanced budget
The Johnson Hospital, a private not-for- profit hospital, received the following revenues in the current year:<br />Proceeds from sales of the Hospital’s flower shop $60,000<br />Dividends and interest revenue not restricted $20,000<br />Cash contributions for the renovation of the children’s ward in the Hospital $200,000<br /><br />Which of these amounts should be reported as other revenues and gains (other revenue) on the Statement of Operations?<br />
80000
On December 31, 20X1, the Board of Trustees of a private, not-for-profit college designated $5,000,000 of unrestricted net assets for the construction of an addition to the music building. What effect does this designation have on the college’s unrestricted and temporarily restricted net assets shown on the statement of financial position on December 31, 20X1? For Unrestricted Net Assets and Temporarily restricted Net Assets
No effect for both
During the period, Entity A, a government entity, withheld ₱100,000 taxes from its payments to employees and suppliers. On September 14 of the current year, Entity A remitted the taxes withheld to the BIR through Tax Remittance Advice. The entry to record the remittance includes
None of these
If plotted on a graph, the periodic interest expenses recognized on bonds issued at a premium will show a: (X axis – time; Y axis - ₱)
downward line sloping to the right
The operator in a service concession arrangement is a
private entity
Gerlack College, a private, not-for-profit institution, received a donation of $2,000,000 as a challenge grant. If the college raises an additional $2,000, within the next two years, it may keep the donation. If it fails, the $2,000,000 must be returned to the donor. How would the college record the receipt of the grant?
Refundable advance.
Arrange the following steps in the budget process according to the sequence that they appear in the budget cycle. Allotment<br />Disbursement authority<br />Disbursement<br />Appropriation<br />Incurrence of obligation
IV, I, V, II and III
A private not-for-profit hospital provided $150,000 in charity care for the current year. The hospital should report this charity care as
Only in the notes to the financial statements.
The following contributions were received by a private voluntary health and welfare organization. Which of these would not be recorded as an increase in unrestricted revenue?
A retired college professor donated reading services to senior citizens. The organization would not have paid for these services if they had not been donated.
According to the GAM for NGAs, these assets are those which have historical, cultural and environmental significance, and are intended to be preserved for future generations.
Heritage assets
Entity A, a government entity, receives notice that for the current year, the maximum amount it can spend on maintenance and other operating expenses is ₱10B. This event can be described as
Appropriation
When determining depreciation, an entity considers all of the following except
Whether the asset is classified as with finite or indefinite useful life.
Which of the following statements is incorrect regarding the accounting for unreleased checks by a government entity?
Unreleased checks are perforated.
The main purpose of the statement of comparison of budget and actual amounts is
to enhance the transparency of financial reporting of the government.
Electra, a not-for-profit performing arts organization, held some donor restricted endowment funds which are invested in stocks that are listed on the NY Stock Exchange, so the fair values are readily determinable. Most of the investments represent amounts between 2% and 5% of the outstanding common stock of the investee corporations. However, Electra does own stock in one company that gives it the ability to exercise significant influence over the operating and
Fair value and Equity method respectively
that the money be spent according to the wishes of the Board of Trustees.<br />Which amounts of these cash flows should be shown on the cash flow statement as cash from operating activities?
Entity A spends ₱20,000 on the repair of one of its equipment. It is not clear whether the repair is a major repair or a minor repair. In accordance with the GAM for NGAs, how should Entity A account for the repair cost?
As a minor repair
Which of the following is not one of the special journals prescribed by the GAM for NGAs?
Sales Journal
Accounting-Gov-Reviewer
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