Chapter 6 Accounting for Income, Collections and Related Transaction

Multiple Choice
1. It is the account used to record collections and deposits made by collecting
officers/postmasters/telegraph operators to the national treasury.
A. Cash Collecting Officers
2. It is the account used to record the amount of Notice of Cash Allocation received,
Tax remittance Advice issued, tax exemption granted by the National
Government and payment of national government agencies liabilities by foreign
lending/donor institutions.
A. Subsidy from national government
3. It is the account used to record all income derived from business operations of
government agencies engaged in trade, business and commerce.
C. Sales Revenue
4. It is the account used to record taxes and charges collected on account of
special privilege or right conferred to an individual or corporation by the state,
through the legislature, to exercise certain power to operate public utilities.
A. Business Tax
5. This account is used to record taxes imposed on gains realized by the seller from
the sale, exchange, or other disposition of capital assets located in the
Philippines, including pacto de recto sales and other forms of conditional sale.
D. Capital Gains Tax
6. It is the method of accounting for income that shall be used by national
government agencies when income is realized during the accounting period
regardless of cash receipt.
C. Accrual Method
7. Which of the following methods of accounting income is not used by government
agencies?
B. Modified Cash Basis
8. Which of the following is not a general procedure in the collection of revenue
from domestic sources?
B. The bureau of treasury records the receipt in its books in peso
equivalent.
9. It is a type of collection where government agencies are required to remit the
total amount to the national treasury and the same shall be recorded in a
separate set of books.
D. Without Authority to Use

10. Which of the following is classified as other non-operating income?

D. Income from grants and donations in kind.

Chapter 7 Miscellaneous Transactions

Multiple Choice
1. When a request of relief from accountability for shortages or loss of funds is
granted, recording of the loss includes a credit to
B. Appropriate Receivable Account
2. It is the transfer of cash from another agency to implement the project of another
agency.
A. Inter-agency transferred funds
3. It represents checks collected by government agency but not accepted by bank
upon deposits.
B. Dishonored Checks
4. The journal entry to record receipt of performance bods in the form of surety
bond includes a debit to
B. Guarantee Deposit
5. It represents the account used to record the liability arising from receipt of cash
bond to guarantee performance of the term of the contract, participation in
bidding, and compliance with court orders.
D. Guaranty/Security Deposits Payable
6. This account is used to record the amount due from officers and employees and
those outside of government agencies for audit disallowances/charges, which
may become final and executor.
C. Receivable - Disallowances/Charges
7. An accountable disbursing officer request for relief from accountability arising
from shortage of fund. However, the request was denied and the disbursing
officer settled his accountability and was issued receipt for the settlement. The
journal entry to record receipt of settlement in the books off government agency
is
C. Cash Collecting Officer
Due from Officers and Employees

8. Performance bonds are required by the agency from contractors/suppliers to

ensure their performance of contracts, which may be in form of cash or certified
check or surety. What is the journal entry to record receipt of performance bonds
in form of surety using the Revised Chart of Accounts?
C. Guarantee Deposits
Guaranty/Security Deposits Payable
9. What is the journal entry to record remittance to the national treasury of travel
expense refund in the books of the government agency, if the cash advance for
travel was granted during the current year?
B. Subsidy from National Government
Cash Collecting Officer
10. Cash advances are usually granted to the Regular Disbursing officers for
salaries and wages and to officers and employees for official travel. Assuming
Cash advances for salaries and wages that were granted in 2014 resulted to
refund of P15,000 what would be the journal entry to be recorded in the books of
the agency to record remittance to the Bureau of Treasury in 2015?
C. Accumulated Surplus/Deficit
Cash - Collecting Officer
11. This account is used to record the cumulative results of normal and continuous
operations if an agency including prior period adjustment, effects of changes in
accounting policy and other capital adjustment.
C. Accumulated Surplus/Deficit

Chapter 8 Trail Balance, Financial Reports and Statements

Multiple Choice
1. According to PPSAS No. 1, Presentation of Financial Statements, the set of
financial statements to be generated from the new accounting system are
A. Balance Sheet, Statement of Changes in Net Assets/Equity,
Statements of Income and expenses, Statement of Cash Flows,
Presentation of a Comparison of Budget and Actual Amounts and
Notes to Financial Statements.
2. It is the financial statement prepared directly from the post-closing trial balance.
B. NO, YES
3. Which of the following is not a purpose for the preparation of trial balance?

C. To prove that no errors of any kind have been made in the

accounts during the accounting period
4. Under the New Government Accounting System, Financial Reporting System
includes the
A. Preparation and submission of financial statements
5. Adjusting entries involve
D. At least one real and one nominal account
6. Why are adjusting entries are necessary?
D. To correct erroneous balances in accounts.
7. Closing entries
D. Remove the balances from the agencys temporary accounts.
8. The following are the financial statements generally prepared in the national
government, EXCEPT
D. Statement of management responsibility
9. It serves as the covering letter In transmitting the agencys financial statement to
the Commission on Audit, Department of Budget and Management, and other
oversight agencies and parties.
C. Statement of management responsibility
10. This financial statement shall be prepared from information taken directly from
the year-end post-closing trial balance.
A. Balance Sheet
11. This financial statement shall be prepared from information taken directly from
the pre-closing trial balance.
B. Statement of income and expense
12. This is a method used in the preparation of the Statement of Cash Flows in the
New Government Accounting System that shows the agencys net cash flow from
all its activities calculated by adding the individual cash inflows and then
deducting the individual cash outflows.
C. Balance Sheet Approach
13. These are financial statements that are required to be prepared at any given
period or at a financial reporting period without closing the books of accounts.
C. Interim Reports
14. Balance sheet is a formal statement, which shows the financial condition of the
agency as of certain date. It shall be supported with the following schedules,
EXCEPT
D. Schedule of Notes to Financial Statements

15. The interim financial statements shall be prepared employing the same
accounting principles used for annual reporting. It shall be submitted quarterly
with the following, EXCEPT
D. Worksheet
16. It is required by the PPSAS No. 1, Presentation of Financial Statements to be
presented as either a separate additional financial statement or as a budget
column in the financial statements, when the entity makes publicly available its
approved budget.
D. Presentation of a comparison of budget and actual amounts
Chapter 9 Accounting for Local Government Units
Multiple Choice
1. Under the old and the new manual, the following funds shall be maintained.
D. General Fund, Trust fund, Special Education Fund
2. This is the basis of recording the transaction in the journals
C. Journal Entry Voucher
3. This is the journal used in recording all collections and deposits reported.
A. Report of collections and deposits
4. What office in the local government unit shall maintain the journals?
B. Office of the treasurer
5. What office in the local government unit shall maintain the cash records?
B. Office of the treasurer
6. This journal is used to record check payments made by the local
treasurer/cashier.
C. Check disbursement journal
7. This is the accounting record, which shall be maintained to monitor
accounts/assets not recorded in the books of accounts.
C. Special Account
8. This is the report used to settle cash advances for travel and for other purposes
except those cash advances granted to regular/special disbursing officer.
A. Liquidation Report
9. This form is used to request supplies and materials that are carried in stock.
B. Requisition and Issue Slip

10. Grants and donations coming from foreign funding institutions, other levels of
government and private institutions/individuals for specific projects/purpose shall
accrue to this fund.
C. Trust Fund
11. To which account the balance of prior years adjustment is closed at the end of
the year?
A. Government Equity
12. When should the local government unit recognize its share from Internal
Revenue Collection as part of its Income?
C. Upon receipt of Notice of Funding Checks issued from the
Department of Budget and the Management
13. For the disbursement of local funds, whose approval is required?
A. Local Chief Executive
14. The local chief executive shall require periodic physical inventory of supplies or
property every semester, while physical count of property, plant and equipment
by type shall be made annually and reported on the report on the physical count
of property, plant and equipment and shall be submitted to the auditor
C. Not later than January 31 and July 31 of each year
15. In 2014, the municipal treasurer of Dinalupihan, Bataan prepared Purchase
Request and AOLBS for the equipment needed by the Office of the Municipal
Engineer in the amount of P500,000. Within the specified period, the item was
delivered, inspected, and accepted. What is the journal entry to record the
transfer of the said equipment to the Office of the Municipal Engineer?
D. Recognized only by using the Acknowledgment Receipt for the
equipment

Chapter 10 The New Barangay Accounting System

Multiple Choice
1. Supplies and materials and small items with serviceable life of more than one
year, like stapler, puncher, mechanical tools, etc. shall be charged to
A. Expense
2. The accounting method adopted for the new barangay accounting system is
A. Accrual Method

3. Under the new barangay accounting system, cash advance for payment of
personnel services shall be accounted as
C. Advances for Payroll
4. Recording of barangay transaction shall be recorded in the books through
Journal Entry Voucher by
C. City/Municipal Accountant
5. What is the basis of the approved appropriations for barangays?
C. General Appropriation Ordinance (GAO)
6. Which of the following is a component of the General Fund of barangays?
A. Personnel Service
7. Under the new barangay accounting system, the following appropriation shall be
valid until fully spent or until the planned activity is completed, EXCEPT
D. Calamity Fund
8. Which of the following is an Authorized Government Depositary Bank (AGDB)
recognized under the new barangay accounting system?
A. Veteran Bank of the Philippines
9. It is the allotment released by the Local Government Unit or Department of
Budget and Management to barangays.
A. Internal Revenue Allotment (IRA)
10. The petty cash fund of barangays shall be maintained using the imprest system.
The amount of petty cash fund shall be determined by the Sangguniang
Barangay but not to exceed
D. 20% of the funds available
11. This barangay official shall act as the property officer of barangay.
C. Barangay Treasurer
12. Who will consolidate the Statement of Appropriation, Commitments and Balances
of each barangay for the five funds, such as: General Fund, 20% Development
Fund, Calamity Fund, Sangguniang Kabataan Fund, and Gender Development
Fund?
D. Budget Officer