NATIONAL COLLEGE OF BUSINESS AND ARTS

Cubao-Fairview-Taytay
SECOND SEMESTER SY 2015-2016
MID-TERM DEPARTMENTAL EXAMINATIONS 2 HRS
ACCOUNTING 13 – 07 GOVERNMENT ACCTG & ACCTG FOR NGO

INSTRUCTIONS: Select the correct answer for each of the following questions. Mark only one answer
for each item by shading the corresponding letter of your choice on the answer sheet provided.
STRICTLY NO ERASURES ALLOWED. Use Pencil No. 2 only.

1. The approved appropriation of Department U for 2008 was P18,000,000. Eighty five percent of this
appropriation was allowed by the Department of Budget and Management (DBM) accompanied
with Notice of Cash allocation (80%) of the allotment. During the year, the amount of obligations
incurred was equivalent to ninety percent of the NCA but only seventy percent of these obligations
were paid by checks. Determine which of the following is incorrect.
A. Department U records the receipt of NCA by debiting to Cash-NT-MDS an amount equivalent
to P12,240,000.
B. The receipt of the allotment is recorded is recorded by means of a memorandum entry.
C. At the end of the year, to adjust the unused NCA, Subsidy Income from National Government
would be debited by P4,528,800
D. At the end of the year, to adjust the unused NCA, Cash-NT-MDS would be credited by
P7,711,200.

2. Which of the following is included in an entry to record remittance of income taxes to the Bureau of
Treasury (BTR) collected by the Bureau of Internal Revenue (BIR)? The BIR has no authority to
use the collections.
A. Debit to Cash- Collections officer
B. Debit to Cash- NT-MDS
C. Credit to Cash- Collections officer
D. Credit to Cash- NT-MDS

3. Agency V collected cash of P50,000 for services rendered. The collection was deposited to the
Bank of the Philippine Islands (BPI). What is the entry to record the deposit?
A. Debit, Cash in Bank-LCCA and Credit, Cash- Disbursing officer for P50,000
B. Debit, Cash -NT-MDS and Credit, Cash- Collecting officer for P50,000
C. Debit, Cash in Bank-LCCA and Credit, Cash- Collecting officer for P50,000
D. Debit, Cash -NT-MDS and Credit, Cash- Disbursing officer for P50,000

4. Agency SS issued a purchase order for the acquisition of office equipment costing P75,000. The
equipment was received with the charge invoice and was paid by check after withholding tax of
10%. Agency SS remitted the tax with held to BIR thru a government depository bank. What is the
entry of Agency SS to record the payment?
a. Accounts Payable 75,000
Due to BIR 7,500
Cash-National Treasury-MDS 67,500
b. Office Equipment 75,000
Cash-National Treasury- MDS 75,000
c. Office Equipment 75,000
Due to BIR 7,500
Cash-National Treasury-MDS 67,500
d. Accounts Payable 67,500
Cash-National Treasury-MDS 67,500

5. On May 1, 2008 Agency G signed a contract for the construction of a building. The contract price is
P75 million. The agency made a down payment of 30% of the contract price. On September 1,
2008, Agency G received the first billing of 50% of the contract price. The agency paid the first
billing less P150,000 withholding tax.
Which of the following is true to record receipt of the first billing?
A. Debit Contract Billings, P37.5 million
B. Debit Construction in Progress, P75 million
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C. Credit advances to contractor, P22.5 million

D. Credit Accounts Payable, P22.5 million

6. (RAOFE) Bank charges per bank statement, P7,500; Interest expense upon receipt of Bill,
P9,000. Based on the given information, which of the following is not correct?
A. Entry to record the bank charges in the regular agency books would include a credit to Cash-
NT-MDS
B. Receipt of bill for interest is entered in the RAOFE
C. Payment of interest expense would include a credit to Cash-NT-MDS
D. Agency enters the obligation for bank charges in the RAOFE

7. (RAOPS) Agency J prepares the payroll fund for the month of August 2008:
Salaries and Wages P300,000
ADCOM 90,000
PERA 60,000
Gross Payroll P450,000
Less: Withholding tax 12,000
GSIS contribution 9,000
Pag-ibig contribution 6,000
Philhealth contribution 3,000
30,000
Net payroll P420,000
The net payroll is advanced to a Disbursing Officer.
Which of the following is true to record the advances to the disbursing officer?
A. Debit ash Disbursing Officer, P450,000
B. Credit Cash-NT-MDS, P420,000
C. Debit Cash in Bank- LCCA, P420,000
D. Credit Cash- NT-MDS, P450,000

8. (INTER-AGENCY) During 2008, Agency W transferred cash of P100,000 to Agency X for a land
beautification project. Subsequently, Agency W received a report from Agency X about the project.
Which of the following is incorrect?
A. The obligation of P100,000 is entered in the RAOCO
B. Source Energy debits due from NGA upon transfer of cash
C. Receiving Agency credits Cash-NT-MDS upon receipt of cash
D. Source Agency debits Land Development upon receipt of the completion report from the
implementing agency.

9. On September 10,2008 Bureau of Customs collected taxes from articles in the amount of
P875,000. The BC has no authority to use these collections in their operation and therefore
deposited it to the Bureau of Treasury. What is the journal entry to record the collections in the
National Government Books?
A. Cash-National-Treasury-MDS 875,000
Subsidy Income from NG 875,000
B. Cash-Collecting Office 875,000
Exercise taxes- Articles 875,000
C. Cash-Disbursing Officer 875,000
Contributions Revenue 875,000
D. Cash-in Bank- LCCA 875,000
Exercise taxes-Articles 875,000

10. Collection of P645,000 representing motor vehicles registration fees was recorded by Land
Transportation Office as P654,000. What is the correcting entry under the NGAS?
A. Cash-Disbursing Officer 9,000
Registration Fees 9,000
B. Cash-Collecting Officer 9,000
Registration Fees 9,000
C. Registration Fees 9,000
Cash NT-MDS 9,000
D. Registration Fees 9,000
Cash-Collecting Officer 9,000

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3 ACCOUNTING 13-07 ACCOUNTING FOR GOVERNMENT & ACCTG FOR NGO

11. The following data were taken for the accounting records of Agency Q on December 31,2008 (in
million)
Notice of cash allocation received P600
Office supplies expense 16
Electricity 80
Refund of excess cash advance 20
Unused NCA 120
Rent Expense 32
Salaries and wages- regular pay 220
Traveling expense 4
ADCOM 8
PERA 40
Which of the following is true to close the net income over expenses?
A. Debit Retained Operating Surplus, P60
B. Debit Subsidy Income from National Government, P60
C. Credit Income and Expense Summary, P60
D. Credit Retained Operating Surplus, P60

12. On June 30, 2008,Agency R collected P35,000 from tenants for the rent of office space in its
building and deposited the collections to PNB (AGDB). On July 10, the agency used P17,000 of
this collection for the repair of the office space. Which of the following is true to record the payment
of the repair of the office space?
A. Debit Repairs and Maintenance, P35,000
B. Credit Cash-Disbursing Officer, P35,000
C. Debit Cash- Collecting Officer, P17,000
D. Credit Cash in Bank- LCCA, P17,000

13. I. Generally, withheld taxes by the agency are no longer remitted to BIR, but retained and
credited to Subsidiary Income from National Government (SING) under the Tax Remittance
Advice (TRA) System. The NCA released to the agency is reduced by the amount of
estimated withholding taxes pertinent to the allotment covered by the cash allocation.

II. Asset/perpetual inventory method will be followed in the recording of expenditures if it applies
to more than one period or when payment is for materials for stock. The expense is taken up
when the items are consumed.

Statement (1) Statement (2) Statement (1) Statement (2)

a. False False c. True False
b. False True d. True True

14. I. Cost of assets being constructed are debited to construction in progress account (using
construction period theory). This CIP account is closed to the appropriate asset account
upon completion.
II. Constructed Public Infrastructures are not shown among the fixed assets on the statement of
financial position, rather they are deducted from government equity (as part of closing entries)
and transferred out to an appropriate registry.

Statement (1) Statement (2) Statement (1) Statement (2)

a. False False c. True False
b. False True d. True True

15. I. Depreciation on fixed assets are taken up on the month following the month of
purchase or completion of construction. A 10% scrap value on the asset is
always assumed and the estimated life is prescribed by COA.
II. Income for which the agency is authorized to use for its operation is recorded in the
regular agency books.
Statement (1) Statement (2) Statement (1) Statement (2)
a. False False c. True False
b. False True d. True True

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16. I. Adjusting entries at the end of period are the same as those recorded in commercial
accounting.
II. Closing entries are similar to commercial accounting with some minor differences.

Statement (1) Statement (2) Statement (1) Statement (2)

a. False False c. True False
b. False True d. True True

17. I. Records of the BTR (Bureau of Treasury). Upon receipt of the copy of the NCA from the
DBM, the BTR shall enter it in the Registry of NCA and Replenishment (RENREP). It shall
also enter the transfer of cash from its bank account(s) to the appropriate MDS account.

II. The obligation is recognized and will be entered in the appropriate RAO when obligation is
incurred as evidenced by the appropriated Allotment and Obligations Slips (ALOBS)

Statement (1) Statement (2) Statement (1) Statement (2)

a. False False c. True False
b. False True d. True True

18. I. Upon receipt of the NCA, the Accountant shall journalize it as “ Cash in the Treasury for
Modified Disbursement System (MDS)” and “ Subsidy Income from National Government”
which in effect identifies the share, of the Agency in the income of the National Government.

II. The Accountant shall credit “ Cash, National Treasury – MDS” each time a payment is made
charged against the NCA and debit the specific account being paid for, either asset or
expense account.

Statement (1) Statement (2) Statement (1) Statement (2)

a. False False c. True False
b. False True d. True True

19. This refers to a plan of financial operation composed of estimate or proposed expenditure for a
given period or purpose, and the proposed means of financing them.
A. Budget
B. Balanced Budget
C. Performance budget
D. National Budget

20. This refers to a plan or program of activities together with cost of undertaking to meet goals or
targets which emphasize on expected results.
A. Budget
B. Balanced Budget
C. Performance budget
D. National Budget

21. This refers to a plan that is applied in the preparation of the national budget, where the total
estimated income must be more than the total estimated expenditures.
A. Budget
B. Balanced Budget
C. Performance budget
D. National Budget

22. This refers to the government estimate of its income and expenditure. It is what the government
plans to spend for its program and projects where money will come from.
A. Budget
B. Balanced Budget
C. Performance budget
D. National Budget

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23. These are amounts which are committed to be paid by the government which arise from acts of a
duly authorized administrative officer and which binds the government to the immediate or
eventual payment of a sum of money.
A. Obligation
B. Appropriation
C. Allocation
D. Allotment

24. This is a control measure designed to ensure that withdrawals from the Treasury shall be within
the Treasury’s capability to honor such Withdrawals.
a. Internal Control c. Cash Disbursement Ceiling
b. External Control d. Cash Receipts Ceiling

25. These are services, products, or benefits accruing to the public, estimated in terms of performance
measure or targets.
a. Expected Results c. Program
b. Project d. Resources

26. These are functions and activities necessary for the performance of a major purpose for which a
government entity is established.
a. Expected Results b. Program c. Project d. Resources

27. This means a compound of a program covering a homogeneous group of activities that result in
the accomplishment of an identifiable output.
a. Expected Results b. Program c. Project d. Resources

28. These are actual assets of any agency of the government such as cash, instrument representing
or convertible into cash, receivables, land, buildings, as well as contingent assets such as
estimated revenues applying to the current fiscal period not accrued or collected, and bonds
authorized and unissued.
a. Expected Results b. Program c. Project d. Resources

29. It is the plan of organization and all coordinate methods and measures adopted within an
organization or agency to safeguard its assets, check the accuracy and reliability of its accounting
data, encourage adherence to prescribe managerial policies.
a. Internal Control c. Cash Disbursement Ceiling
b. External Control d. Cash Receipts Ceiling

30. Which of the following is not a part of the budgetary procedures?

a. Preparation and presentation c. Budget execution and operation
b. Budget explanation d. Budget accountability

31. Accounting method used in the government where in all expenses shall be recognized when
incurred while Income shall be an accrual basis except for transaction where accrual basis is
impractical or when other methods are required by law.
A. Accrual basis C. Modified Cash
B. Cash Basis D. Modified Accrual

32. Regular agency books are used to record the

A. Receipt of Notice of cash Allocation
B. Income which are required to be remitted to the Bureau of Treasury (BT) and for which the
agencies are not authorized to use.
C. Both a & b
D. None of the choices

33. I. Obligation accounting is modified to eliminate the complicated procedures in the incurrence of
obligations and the recoding of the budgetary accounts (appropriation, allotments and
obligations incurred and liquidated).
II. Journal entry shall no longer be prepared to record the receipt of the allotments from DBM and
the incurrence of the obligations by the agency.
Statement (1) Statement (2) Statement (1) Statement (2)
a. False False c. True False
b. False True d. True True
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34. National Government books are used to record the

A. Receipt of Notice of cash Allocation
B. Income which are required to be remitted to the Bureau of Treasury (BT) and for which the
agencies are not authorized to use.
C. Both a & b
D. None of the choices

35. This is a formal authorization under a legislative act for an agency to incur expenditures up to
stated sum of specified purposes usually within a given period of time subject to a certain
condition.
a. Obligation b. Appropriation c. Allocation d. Allotment

36. This is the authorization issued by the DBM to the Agency, which allows it to incur obligations, foe
specified amounts, with the legislative appropriations.
a. Obligation b. Appropriation c. Allocation d. Allotment

37. These are payments of obligations incurred by the Agency. The NCA is used for payments of the
following types of transactions:
A. Financial expenses
B. Purchase and/or construction of fixed assets such as building and structures, land, land
improvements, equipment, etc., charged against the capital outlay.
C. Both a & b
D. None of the choices

38. The sources of income and collections made by the Agency are:
A. Taxes
B. Borrowings
C. Both a & b
D. None of the choices

39. Under the NGAS the following shall be closed at the end of the year:
A. Unused Notice of Cash Allocation (NCA)
B. Used Notice of Cash Allocation
C. both a & b
D. None of the choices

40. Under the NGAS the following shall be closed at the end of the year:
A. Permanent Accounts
B. Real Accounts
C. both a & b
D. None of the choices

41. Under the NGAS the following shall be closed at the end of the year:
A. Nominal Accounts
B. Temporary Accounts
C. both a & b
D. None of the choices

42. Which of the following is a part of the closing process?

A. Close all income accounts to Income and Expense Summary
B. Close all expense accounts to Income and Expense Summary
C. both a & b
D. none of the choices

43. Which of the following is not a part of the closing process?

A. Close the balance of the Income and Expense Summary account to Retained Operating
Surplus.
B. Close the balance of prior years’ Adjustments to Retained Over Surplus account.
C. both a& b
D. none of the choices
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44. Under the NGAS the following are types of financial statements except:
A. Statement of Income and Expenses
B. Balance Sheet
C. Cash Flow Statement
D. Income Statement

45. The following items shall be reported in the Cash Flow Statement except:
A. Cash flows from financing activities
B. Effect of foreign exchange rate changes. If any,
C. Net increase( decrease) in cash during the period
D. non cash operating activities

46. Cash flows from financing activities excludes:

A. Equity Contribution
B. Creditors for repayment of amounts borrowed.
C. Creditors from issuing debt securities
D. Receipt of Notice of Cash Allocation

47. Cash flows used in investing activities. Included under this category are:
A. Disposal/Sale of property, plant and equipment
B. Disposal/Sale of investment securities
C. both a & b
D. none of the choices.

48. Cash flows used in investing activities. Not under this category are:
A. Collection of Loan (interest in operating activities)
B. Acquisition/ Purchase of property, plant and equipment
C. both a & b
D. none of the choices.

49. Cash inflows in investing activities includes the following:

a. Long-term investment in debt and equity securities
b. Loans to other parties
c. both a & b
d. None of the choices

50. Under the operating activities, usual cash inflows identified are cash received from the following
except:
A. Notice of Cash Allocation (NCA)
B. Interest from Deposits
C. Refunds from suppliers, agency officials and employees and other parties
D. Collection of Loan

**** THE END ****

GOD BLESS!

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