Government Accounting

Solman Millan

CHAPTER 3
PROBLEM 3-1: TRUE OR FALSE
True 1. Technically, only the Journals and Ledgers are considered accounting records; the
Registries are budget records.

True 2. Separate accounting records and budget registries are maintained for each fund cluster.

False 3. Government entities and business entities use the term "obligation" or the phrase
"incurrence of obligation" similarly.

True 4. The various registries maintained by government entities primarily serve as internal
control for controlling and monitoring the conformance of actual results with the approved
budget.

True 5. A check disbursement is normally recorded as credit to the "Cash-Modified

Disbursement System (MDS) Regular" account.

True 6. Both the ORS and RAOD are updated each time an obligation is incurred, a payable is
recorded for the obligation incurred, and disbursements are made to settle the recorded
payables.

True 7. At the end of each year, an adjustment is made to revert any unused NCA of a
government entity.

False 8. The GAM for NGAs requires the Collecting Officer to issue an official receipt to
acknowledge the receipt of the Notice of Cash Allocation.

True 9. The entry to record the reversion of unused NCA at the end of the period is the exact
opposite of the entry used to record the receipt of NCA.

False 10. The remittance of amounts withheld to other government agencies, such as theBIR,
BOC, GSIS, PhilHealth, and Pag-IBIG, is done through the TRA.

PROBLEM 3-2: MULTIPLE CHOICE

1. The various registries maintained by government entities are considered, technically, as
a. Book of Accounts
b. Budget Records
c. General Ledgers
d. Log books

2. Which of the following is recorded in the Obligation Request and Status (ORS)?

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a. Receipt of notice of appropriation
b. Receipt of allotment from DBM
c. Receipt of Notice of Cash Allocation from the DBM
d. Entering into employment contracts with employees

3. This type of expenditure pertains to all types of employee benefits.

a. Personal Services (PS)
b. Maintenance and Other Operating Expenses (MOOE)
c. Financial Expenses (FE)
d. Capital Outlays (CO)

4. Entity A, a government entity, made disbursements for the travelling expenses of its
personnel. These expenditures are most likely classified as
a. Personal Services (PS)
b. Maintenance and Other Operating Expenses (MOOE)
c. Financial Expenses (FE)
d. Capital Outlays (CO)

5. Which of the following is charged with the responsibility of keeping the general accounts and
related documents of the government
a. Commission on Audit (COA)
b. Bureau of Treasury (BTr)
c. National Government Agencies (NGAs)
d. Department of Budget and Management (DBM)

6. A journal entry with a credit to the "Cash-Modified Disbursement System, Regular" account
will most likely be recorded in the
a. General Journal
b. Special Journal
c. Cash Disbursements Journal
d. Check Disbursements Journal

7. Which of the following accounts is debited when a government entity remits its collections to
the National Treasury?
a. Cash-Tax Remittance Advice
b. Cash-Modified Disbursement System (MDS), Regular
c. Cash-Treasury/Agency Deposit, Regular
d. Cash – Collecting Officer

8. Which of the following accounts is credited when a government entity remits taxes withheld
to the BIR?
a. Cash-Tax Remittance Advice
b. Cash-Modified Disbursement System (MDS), Regular
c. Cash-Treasury/Agency Deposit, Regular

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d. Cash – Collecting Officer

9. Which of the following accounts is credited when a government entity remits contributions to
the GSIS, PhilHealth and Pag-IBIG?
a. Cash-Tax Remittance Advice
b. Cash-Modified Disbursement System (MDS), Regular
c. Cash-Treasury/Agency Deposit, Regular
d. Cash – Collecting Officer

10. Obligations recorded in the registries but not yet in the accounting books are referred to as
a. Not Yet Due and Demandable
b. Contingent liabilities
c. Erroneous recording
d. Unpaid obligations

PROBLEM 3-3: MULTIPLE CHOICE

1. The receipt of an appropriation is recorded by a government entity in the
a. RAOD
b. ORS
c. RAPAL
d. a and c

2. The incurrence of an obligation for future delivery of performance by the obligee is recorded
by a government entity in the
a. RAOD
b. ORS
c. RAPAL
d. a and b

3. The receipt of an appropriation is recorded by a government entity in the

a. RAOD
b. ORS
c. RAPAL
d. a and b

4. The entry to record the receipt of Notice of Cash Allocation (NCA) by a government entity is:
a. (Debit) Cash-Modified Disbursement System (MDS), Regular; (Credit) Accumulated
Surplus (Deficit)
b. (Debit) Cash-Modified Disbursement System (MDS), Regular; (Credit) Subsidy
form National Government
c. (Debit) Cash-Collecting Officer; (Credit) Subsidy from National Government
d. No journal entry. The event is recorded only in the Registries.

5. According to the Revised Chart of Accounts (RCA) issued by the COA, the “Subsidy from

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National Government” account is a(an)
a. Asset account
b. Liability account
c. Revenue account
d. Equity account

6. Which of the following is not one of the necessary closing entries of a government entity?
a. Closing of the “Cash-Treasury/Agency Deposit, Regular” account to the “Accumulated
Surplus/(Deficit)” account.
b. Closing of the “Subsidy from National Government” account to the “Revenue and
Expense Summary” account.
c. Closing of income and expense accounts to the “Revenue and Expense Summary”
account.
d. Closing of the net balance of “Revenue and Expense Summary” account to the
“Subsidy from National Government” account.

7. A government entity pays an accounts payable. The entry to record the payment will most
likely include a
a. debit to the “Cash-Modified Disbursement System (MDS), Regular” account.
b. credit to the “Due to BIR” account.
c. credit to the “Cash-Treasury/Agency Deposit, Regular” account.
d. None of these. The event is recorded only in the Registries and the Obligation Request
and Status.

8. In accordance with the GAM for NGAs and the Revised Chart of Accounts, how does a
government entity recognize the uncollectibility of accounts receivable?
a. By debiting the “Bad Debts Expense” account.
b. By debiting the “Impairment Loss-Loans and Receivables” account.
c. By debiting the “Allowance for Impairment-Accounts Receivable” account.
d. b and c

9. The “Subsidy from National Government” account is credited when recording a

a. receipt of NCA
b. reversion of unused NCA
c. constructive remittance of customs duties or taxes withheld through TRA
d. a and c

10. Expenditures to acquire long-term assets are most likely classified as

a. Personal Services (PS)
b. Maintenance and Other Operating Expenses (MOOE)
c. Financial Expenses (FE)
d. Capital Outlays (CO)

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