LOCAL TREASURY OPERATIONS MANUAL

Scope 1: Fiscal Organization of Local Governments and the Local Treasurer

Chapter 1: Fiscal Organization of Local Governments

1. It is a body politic and corporate endowed with powers to be exercised by it in conformity with law.
a. Government
b. Local Government Unit
c. Province
d. City
e. Barangay

Answer: b. Local Government Unit

2. The common requirements for creation of a local government unit or its conversion from one level to
another shall be based on the following:
a. Sufficient Income
b. Population within the territorial jurisdiction
c. Contiguous Land Area
d. All of the above
e. None of the above

Answer: d. All of the above

3. The determination of compliance to the common requirements for creation of an LGU or its conversion shall
be attested to by the following except:
a. Department of Finance
b. National Statistics Office
c. Provincial Capitol
d. Lands Management Bureau
e. Department of Environment and Natural Resources

Answer: c. Provincial Capitol

4. The income classification of local government units resulting from division and merger shall be updated to
reflect the changes in their financial position.
a. Within 6 months from effectivity of R.A. No. 7160
b. Within a year from effectivity of R.A. No. 7160
c. Within 3 years from effectivity of R.A. No. 7160
d. None of the above

Answer: a. Within 6 months from effectivity of R.A. No. 7160

5. A province maybe created by an Act of Congress and subject to approval by a majority of the votes cast in a
plebiscite to be conducted by the COMELEC in the local government unit or units directly affected from the
said Act, the plebiscite shall be held within:
a. 30 days
b. 60 days
c. 120 days
 d. One year
e. None of the above

Answer: c. 120 days

6. A contiguous territory as certified by the Lands Management Bureau to comply with the creation of the
province shall be at least:
a. 100 square kilometers
b. 2,000 square kilometers
c. 10,000 square kilometers
d. 50,000 square kilometers
e. None of the above

Answer: b. 2,000 square kilometers

7. A province maybe created if it has an Average Annual Income for the immediately preceding 2 consecutive
years based on 1991 constant prices, as certified by Department of Finance, of at least:
a. Php 2,500,000.00
b. Php 20,000,000.00
c. Php 50,000,000.00
d. Php 100,000,000.00
e. Php 250,000,000.00

Answer: b. Php 20,000,000.00

8. A municipality or a cluster of barangays may be converted into a component city if it has a locally generated
Average Annual Income for the last 2 consecutive years based on 2000 constant prices, as certified by
Department of Finance, of at least:
a. Php 2,500,000.00
b. Php 20,000,000.00
c. Php 50,000,000.00
d. Php 100,000,000.00
e. Php 250,000,000.00

Answer: d. Php 100,000,000.00

9. The minimum population as certified the National Statistics Office to comply with requirement for the
creation of the province shall be:
a. 25,000 inhabitants
b. 100,000 inhabitants
c. 150,000 inhabitants
d. 250,000 inhabitants
e. 500,000 inhabitants

Answer: d. 250,000 inhabitants

10. The minimum population as certified the National Statistics Office to comply with requirement for the
creation of a city shall be:
a. 25,000 inhabitants
b. 100,000 inhabitants
 c. 150,000 inhabitants
d. 250,000 inhabitants
e. 500,000 inhabitants

Answer: c. 150,000 inhabitants

11. A contiguous territory as certified by the Lands Management Bureau to comply with the creation of a city
shall be at least:
a. 100 square kilometers
b. 2,000 square kilometers
c. 10,000 square kilometers
d. 50,000 square kilometers
e. None of the above

Answer: a. 100 square kilometers