GOVERNMENT ACCOUNTING

Problem 1. The agency received an allotment for DBM of P10,000,000 which is accompanied by with
a notice of cash allocation of 90% of the allotment. During the year, the agency incurred an obligation
of 90% of the NCA but only 40% of these obligation were paid by the agency. The enty to record the
unused NCA is:
A. SING

4,860,000
Cash NT, MDS

B. SING

4,860,000
5,760,000

Cash NT, MDS

C. Cash NT, MDS
SING
D. Cash NT, MDS
SING

5,760,000
4,860,000
4,860,000
5,760,000
5,760,000

Problem 2. Performance bonds are required by the agency from contractors/suppliers to ensure their
performance of contracts, which may be in the form of cash or certified check or surety. What is the
journal entry to record receipt of performance bonds in form of surety?
A. Cash Collecting Officer
Performance bonds payable
B. Cash Collecting Officer
Guarantee deposits payable
C. Guarantee deposits
Performance bonds payable
D. Performance bonds payable
Guarantee deposits
Problem 3. On May 5, 2015 Agency DOF transfers cash of P20,000,000 to DPWH for a land
beautification project. The project was completed by DPWH on October 3, 2015. What is the entry of
Agency DOF to record the completion of the beautification project?
A. Land development
20,000,000
Cash NT, MDS
B. Land development
20,000,000
Due from NG DPWH
C. Land development
20,000,000
Cash in bank check disbursements
D. No entry

20,000,000
20,000,000
20,000,000

Problem 4. LTO collected motor vehicles registration fees amounting to P250. These were remitte ti
the Bureau of Treasury. To record the remittance by LTO in the National Governement books, the entry
would be:
A. Cash NT, MDS
Registration fees
B. Registration fees
250
Cash NT, MDS
C. Registration fees
250
Cash Collecting Officer
D. Cash Disbursing Officer 250
Cash Collecting Officer

250
250
250
250
250

Problem 5. Agency Z have an obligation for equipment per purchase order amounting to P800,000.
Subsequently, the agency liquidates the equipment acquired in full. The entry to record this
transaction would be (ignore tax implication)
A. Memorandum entry in RAOCO
B. Accounts Payable
800,000
Cash NT, MDS
C. SING
800,000
Cash NT, MDS
D. Obligation Liquidated
800,000
Cash NT, MDS

800,000
800,000
800,000

Problem 6. The entry for obligations of stamps P5,000 for replenishment of petty cash fund is:
A. Stamps
Cash NT, MDS
B. Stamps expense
Cash NT, MDS
C. Memo entry RAOMO
D. Petty Cash fund
Cash NT, MDS
Problem 7. Agency LOL issued a bill for rent of office space to VIP Holdings, P400,000. The agency is
authorized per special provision to use receipts from rentals for their operations. The entry on the
Agency bools to record the foregoing transactions would be:
A. Memo entry
B. Accounts Receivable
400,000
SING
400,000
C. Accounts Receivable
400,000
Rent Income
400,000
D. Cash Collecting Officer 400,000
Rent Income
400,000
Problem 8. The straight-line method of depreciation shall be used for government property, plant
and equipment and a 10% residual value shall be set up. What is the estimated useful life of
government buildings that are predominantly wood, mixed wood and concrete, predominantly
concrete?
A.
B.
C.
D.

15 years, 20 years and 25 years, respectively

5 years, 15 years and 30 years, respectively
10 years, 25 years and 40 years, respectively
10 years, 20 years and 30 years, respectively

Problem 9. The notice of cash allocation from Bureau of Treasury shall be recorded by the
government agencies in which of the following books?
A.
B.
C.
D.

Regular Agency Books

Registry of Notice of Cash Allocation and Replenishments
National Government Books
Registry of Allotment and Notice of Cash Allocation

Problem 10. Which of the following statements is incorrect?

A. The tax remittance advice is recorded by the agency by crediting SING

B. The gross payroll is advanced to a disbursing officer and is recorded by crediting Cash NT,
MDS
C. Upon payment of the office equipment on account, Due to BIR account shall be credited for the
withholding tax
D. The unused NCA is to be reverted to the Bureau of Treasury by crediting the Cash NT, MDS
account
Problem 11. Which of the following is incorrect?
A. In the construction of building by contract, Advances to Contractor account may be debited
when billings are received
B. In the construction of building by contract, Construction in Progress account is credited to
recognize the Building account
C. Issued purchase orded for the office equipment requires only a memo entry in RAOCO
D. The agency enters the obligation for bank charges in RAOFE, Cash in Bank LCCA account is
credited in the regular agency books
Problem 12. Out of its total appropriation for 2014, Department of Kurap received its allotment
broken down as follows:
Capital Outlay (CO)
Maintenance and Other Operating Expense
Personal Services (PS)
Financial Expenses
Total

20,000,000
10,000,000
5,000,000
1,000,000
36,000,000

The Department of Budget and Management (DBM) issued Notice of Cash Allocation to Department of
Kurap in the amount of P20,000,000. Department of Kurap records the allotment by a:
A.
B.
C.
D.

Memo entry in the Registry of Allotments and Obligations

Memo entry in the general journal
Memo entry in the tegistry of Appropriations and Allotment
National Clearing Account
36,000,000
Appropration allotted
36,000,000

Problem 13. On December 31, 2014, selected ledger accounts of LGU Sampernandu shows the
following:
Total NCA received for the year
Total MDS checks issued
Prepaid rent (10/1/2014 to 9/30/2015)
Public infrastructures (completed)

5,000,000
4,975,000
12,000
2,500,000

A. The adjusting entries at the end of the year will include

A.
B.
C.
D.

Debit, SING, P28,000

Credit, Government equity, P34,000
Debit, Rent expense, P3,000
Credit, Construction in Progress agency assets, P2,500,000

B. The closing entry to revert the unused NCA at the end of the year will include
A.
B.
C.
D.

Debit, Cash NT, MDs, P5,000,000

Credit, Government equity, P4,975,000
Debit, SING, P25,000
Credit, Construction in Progress agency assets, P2,500,000

Problem 14. The DWPH received capital outlay and Notice of Cash Allocation, net of tax remittance
advice, from the DBM in the amount of P10,000,000 and P8,000,000, respectively. Upon approval of
the project proposal for the improvement of the administration building, purchase order for materials
was issued in the amount of P4,000,000. At the date of delivery, construction materials were
inspected and paid in full. Materials of P3,500,000 were issued and used in the construction. Payroll
for labor cost in the amount of P1,500,000 less 10% withholding tax was submitted to the
administration, and cash advance was granted to special disbursing office for the eventual payment of
payroll. Withholding tax payable was remitted to the Bureau of Internal Revenue and upon approval of
the accomplishment report by the head of the DPWH, the capital expenditures were taken in the
books of DPWH.
Which of the following journal entries in the Registry Agency Books of DPWH is correct?
A. To record the receipt of the allotment for capital outlay
Allotment receivable from DBM
10,000,000
Subsidy income from national government
10,000,000
B. To record obligation of materials purchased
Construction in materials inventory
4,000,000
Accounts payable
4,000,000
C. To record the recipt of notice of cash allocation, net of tax remittance advice
Cash NT, MDS
8,000,000
Subsidy income from national government
8,000,000
D. To record payment of construction materials, net of 10% withholding tax
Accounts payable
4,000,000
Due to BIR
400,000
Cash Collecting Officer
3,600,000
Problem 15. The Department of Budget and Management of the Philippine Government conducted a
seminar about the New Governement Accounting System. The DBM collected a total amount of
P20,000 as seminar fees, which was deposited with Landbank of the Philippines and paid the following
expenses of the seminar: Office supplies P5,000; Rent P3,000 and Printing and Binding P1,000.
The excess of the amount collected was appropriately remitted to the National Treasury.
Which of the following journal entries in the Regular Agency Book of DBM is incorrect?
A. To record collection of seminar fees
Cash Collecting Officer
20,000
Seminar fees
20,000
B. To record deposit of collections
Cash in Bank LBP
20,000
Cash Collecting Officer
20,000
C. To record payment of expenses
Office supplies expense
5,000
Rent expense
3,000
Printing and publication expense
1,000
Cash Collecting Officer
9,000
D. To record closing of accounts in Regular Agency Books to National Government Book
Seminar fees
20,000

Office supplies expense

Rent expense
Printing and publication expense
Cash in Bank LBP

5,000
3,000
1,000
11,000

Problem 16. Based on the memorandum agreement for a reforestation project, DPWH (source
agency) made an inter-agency transfer of fund to DENR (implementing agency). DPWH issued check in
the amount of P5,000,000 which was previously obligated by DPWH for that purpose. Upon receipt of
the check by DENR, it was remitted to the Bureau of Treasury. The corresponding Notice of Cash
Allocation (NCA) was requested and received by DENR from the DBM. Accordingly, expenses were paid
by DENR and appropriate report for this project was submitted to DPWH.
Which of the following journal entries in the Regular Agency Book of DENR is incorrect?
A. To record cash transfer from DPWH to DENR
Cash Collecting Officer
5,000,000
Due to Bureau of Treasury
5,000,000
B. To record remittances to the Bureau of Treasury
Due from Bureau of Treasury
5,000,000
Cash Collecting Officer
5,000,000
C. To record receipt of Notice of Cash Allocation
Cash NT, MDS
5,000,000
Due from Bureau of Treasury
5,000,000
D. To record expenditure on reforestation
Land Improvement, Reforestation
5,000,000
Cash NT, MDS
5,000,000
E. To record submission of report to DPWH
Due to DPWH
5,000,000
Land Improvement, Reforestation
5,000,000
Problem 17. DSWD received a grant or donation from SM Inc. in the amount of P100,000. DSWD has
no specific authority for the use of the grant. DSWD remitted the P100,000 cash to the Bureau of
Treasury through the bank. Afterwards, the DSWD preapared and submitted special budget for Street
Children Christmas Party to DBM. Upon approval of the special budget for DSWD, the DBM released
the Special Allowance Release Order (SARO) in the amount of P100,000. Afterwards, the DBM released
the Notice of Cash Allocation to the DSWD.
Which of the following journal entries in the national government book or regular agency book of
DSWD is incorrect?
A. To record the receipt of grant from SM in the National Government Book of DSWD
Cash Collecting Officer
100,000
Income from Donation
100,000
B. To record the remittance to the Bureau of Treasury through the bank in the National
Government Book of DSWD
Income from Donation
100,000
Cash Collecting Officer
100,000
C. To record the receipt of SARO from DBM in the Regular Agency Book of DSWD
Receivable from DBM
100,000
Subsidy Income from National Government
100,000
D. To record the receipt of Notice of Cash Allocation from DBM in the Regular Agency Book of
DSWD
Cash NT, MDS
100,000
Subsidy Income from National Government
100,000