ADVACC3

ASSESSMENT TASK 1

A. Application of concepts: Overview of Government

Accounting (Millan, 2018)

1. How does government accounting differ from the accounting for business entities?

c) Government accounting places greater emphasis on sources and utilization of funds in accordance
with the law and management's stewardship over government resources entrusted to the entity.

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

d) Contract price on government contracts awarded to private companies

3. Entity A (a government agency) is entrusted with government resources. According to P.D. 1445, who
is directly responsible for the efficient and effective utilization of these resources?

b) The Head of Entity A.

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

d) House of Representatives

5. The Department of Budget and Management (DBM) is responsible for

b) the formulation and implementation of the national budget with the goal of attaining the nation's
socio- economic objectives.

6. Which of the following is not one of the objectives of the GAM for NGAS?

d) to update government accounting standards to be consistent with the provisions of U.S. GAAP.

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

d) Accrual basis of accounting.

8. Which of the following qualitative characteristics is improved when information is reported on a

timely basis?

a) Relevance

9. The best estimate for a loss is P100,000. However, the entity deliberately overstated the loss to
P200,000. Which of the following qualitative characteristics is violated?

c) a and b

10. Which of the following financial statements is peculiar to a government entity?

c) Statement of Comparison of Budget and Actual Amounts

B. Application of concepts: The Budget Process (Millan, 2018)

1. All disbursements of government entities must be in conformance with the law and the

a) National budget

2. An entity prepares its budget for the upcoming year from scratch. It scrutinizes each item in the
budget irrespective of whether the item was included in the previous budget. This process is called

d) zero-based budgeting

3. Under this approach to budgeting, several parties participate in the budget preparation from the
lowest levels of government to the highest levels, and sometimes even citizen stakeholders participate
in the budget preparation

d) bottom-up budgeting

4. What is the correct sequence of the following steps in the budget process?

I. Budget Legislation
II. Budget Accountability

III. Budget Preparation

IV. Budget Execution

b) III, I, IV and II

5. After deliberations in both houses in the Congress are finished, a committee is formed to harmonize
any conflicts between the Representatives and Senate versions of the General Appropriations Bill. This
committee is called the

d) Bicameral Conference Committee

6. It is the authorization made by a legislative body to allocate funds for purposes specified by the
legislative or similar authority

a) Appropriation

7. These are the authorizations programmed annually or for some other period prescribed by law, by
virtue of outstanding legislation which does not require periodic action by Congress.

a) Automatic Appropriations

8. Entity A, a government entity, wants to make disbursements. Arrange the following events in the
correct sequence before Entity A can make valid disbursements.

I. Allotment

II. Disbursement Authority

III. Appropriation

IV. Incurrence of obligation

b) III, I, IV, and II

9. This is necessary before government entities can enter into contracts that bind the government for
the eventual disbursement of government funds

c) Allotment

10. Under responsibility accounting, a manager's performance is evaluated

b) only in terms of the costs, or other variables, that he controls.

ASSESSMENT TASK 2

Record the following transactions or events:

a) Receipt of notice of appropriation amounting to P400M.

b) Receipt of allotment from the DBM amounting to P380M.

c) Incurrence of obligations amounting to P350M.

d) Receipt of Notice of Cash Allocation amounting to P325M.

e) Accrual of P300M salaries upon approval of payroll. The breakdown is as follows:

Salaries and Wages 280M

Personal Economic Relief Allowance (PERA) 20M

Gross Compensation 300M

Withholding Tax (75M)

GSIS (15M)

Pag-IBIG (15M)

PhilHealth (8M)
Total Deductions (113M)

Net 187M

f) Granting of cash advance for the payroll.

g) Liquidation of the cash advance for payroll.

h) Remittance of taxes withheld to the BIR.

i) Remittance of other amounts withheld to the other government agencies concerned.

j) Billing of revenue for Rent/Lease Income amounting to P700M.

k) Collection of P550M from billed revenue and remittance of the total collection to the

National Treasury.

l) Reversion of unused NCA.

Solutions:

a. Recording in the Registry of Appropriations and Allotments (RAPAL). No journal entry yet.
b. Recording in the RAPAL and appropriate Registries of Allotments, Obligations and Disbursements
(RAOD) maintained by object of expenditure. No journal entry yet.
c. Recording in RAOD and Obligation Request and Status (ORS). No journal entry yet.
d. Journal entry:

Date Cash-Modified Disbursement System (MDS), Regular

Subsidy from National Government P325,000,00
To recognize receipt of NCA from DBM 0 P325,000,00
0

e. Journal entry:

Date Salaries and Wages, Regular P280,000,000

Personal Economic Relief Allowance (PERA) 20,000,000 P75,
Due to BIR 000,000
Due to GSIS 15,000,000
Due to Pag-IBIG 15,000,000
Due to PhilHealth 8,000,000
Due to Officers and Employees 187,000,000
To recognize payable to officers and employees
upon approval of payroll

* Updating of Obligation Request and Status

e. Journal entry:

Date Advances for Payroll P187,000,000

Cash-Modified Disbursement
System (MDS), Regular P187,000,000
To recognize grant of cash advance for payroll

* Updating of Obligation Request and Status and Registries of Allotments, Obligations and
Disbursements
e. Journal entry:

Date Due to Officers and Employees P187,000,000

Advances for Payroll P187,000,00
To recognize liquidation of Payroll Fund 0
e. Journal entry (in the entity’s books):

Date Cash-Tax Remittance Advice P75,000,000

Subsidy from National Government P75,000,000
To recognize the constructive receipt of NCA for
TRA

Date Due to BIR 75,000,000

Cash-Tax Remittance Advice 75,000,000
To recognize constructive remittance of taxes
withheld to the BIR through TRA

e. Journal entry:

Date Due to GSIS P15,000,000

Due to Pag-IBIG 15,000,000
Due to PhilHealth 8,000,000
Cash-Modified Disbursement
System (MDS), Regular P38,000,000
To recognize remittance to GSIS, Pag-IBIG and
PhilHealth

*The Obligation Request and Status and Registries of Allotments, Obligations and Disbursements are
updated for the payments above.
e. Journal entry:

Date Accounts receivable P700,000,00

Rent/Lease income 0 P700,000,00
To recognize billing of income 0

E. Journal entry:

Date Cash – Collecting Officers P550,000,000

Accounts Receivable P550,000,000
To recognize collection of billed income

Date Cash-Treasury/Agency Deposit, Regular 550,000,000

Cash – Collecting Officers 550,000,000
To recognize remittance of income to BTr

f. Journal entry:

Date Subsidy from National Government P100,000,000

Cash-Modified Disbursement P100,000,000
System (MDS), Regular
To recognize reversion of unused NCA

Cash-Modified Disbursement System (MDS), Regular

Receipt of NCA 325M

187M Advances for payroll
Remittances to GSIS,
38M
Pag-IBIG, & PhilHealth
100M end
ASSESSMENT TASKS 3

1. Which of the following is not one of the fundamental principles for revenue under P.D. No. 1445?

d) All collections of revenue must be in the form of cash. Checks are not acceptable.

2. Imposition and collection of tax revenue is considered a(an)

b) non-exchange transaction

3. According to the GAM for NGAs, all of the following criteria must be met before a government entity
recognizes revenue from the sale of goods, except

d) The stage of completion can be measured reliably.

4. According to the GAM for NGAs, when the outcome of a service contract cannot be estimated
reliably, revenue is recognized

c) only to the extent of costs that are expected to be recovered.

5. Entity A sells goods with a list price of P100,000, on account. The credit term is 20% and 10%. The
journal entry to recognize the revenue includes all of the following except?

c) A debit to sales discount for P28,000.

6. According to the GAM for NGAs, an exchange of goods or services of similar nature and value
between entities

d) does not give rise to revenue.

7. Gifts, donations and goods in-kind with condition are recognized

b) initially as liability and recognized as revenue only when the condition is satisfied.

8. According to the GAM for NGAs, which of the following may never give rise to revenue for a
government entity?

a) Services in-kind

9. When an amount already recognized as revenue becomes subsequently uncollectible, it is

a) recognized as expense.

10. Which of the following receipts of a government entity will give rise to revenue recognition?

d) Receipt of subsidy from the National Government or other National Government Agencies.