GOVERNMENT

ACCOUNTING
THEORIES

1. It is the process of analyzing,

recording, classifying, summarizing,
and communicating all transactions
involving the receipt and disposition
of government funds and property
and interpreting the results thereof
a.
b.
c.
d.

Government auditing
National government
Government budgeting
Government accounting

1. It is the process of analyzing,

recording, classifying, summarizing,
and communicating all transactions
involving the receipt and disposition
of government funds and property
and interpreting the results thereof
a.
b.
c.
d.

Government auditing
National government
Government budgeting
Government accounting

2. What is the accounting system

under the new government
accounting system?
a.
b.
c.
d.

Accrual basis
Modified accrual basis
Cash basis
Modified cash basis

2. What is the accounting system

under the new government
accounting system?
a.
b.
c.
d.

Accrual basis
Modified accrual basis
Cash basis
Modified cash basis

3. The modified accrual basis means

a. All expenses are recognized when
incurred and all income is recognized
when earned
b. All expenses are recognized when paid
and all income is recognized when
earned
c. All expenses are recognized when paid
and all income is recognized when
received
d. All expenses are recognized when
incurred and all income is recognized
when earned except for transactions

3. The modified accrual basis means

a. All expenses are recognized when
incurred and all income is recognized
when earned
b. All expenses are recognized when paid
and all income is recognized when
earned
c. All expenses are recognized when paid
and all income is recognized when
received
d. All expenses are recognized when
incurred and all income is recognized
when earned except for transactions

4. Which is not a basic feature of the new

government accounting system?
a. For a more simplified accounting, only
one fund is maintained
b. A new coding structure and a new
chart of accounts with a three-digit
numbering system shall be adopted
c. Depreciation is regularly taken up in
government accounting using the
straight line method with a 0.10%
residual value
d. The use of corollary and negative
entry shall be stopped

4. Which is not a basic feature of the new

government accounting system?
a. For a more simplified accounting, only
one fund is maintained
b. A new coding structure and a new
chart of accounts with a three-digit
numbering system shall be adopted
c. Depreciation is regularly taken up in
government accounting using the
straight line method with a 0.10%
residual value
d. The use of corollary and negative
entry shall be stopped

5. What is the legal basis of the COA

in prescribing the New Government
Accounting System?
a. Presidential Decree No. 1445
b. Legislative Act
c. Constitution of the Republic of the
Philippines
d. Recommendation of the
International Monetary fund

5. What is the legal basis of the COA

in prescribing the New Government
Accounting System?
a. Presidential Decree No. 1445
b. Legislative Act
c. Constitution of the Republic of the
Philippines
d. Recommendation of the
International Monetary fund

6. The objectives of the NGAS

include all of the following, except
a. To simplify government
accounting
b. To conform with International
Accounting Standards
c. To comply with the requirements
of the International Monetary
Fund
d. To generate periodic and relevant
financial reports for better

6. The objectives of the NGAS

include all of the following, except
a. To simplify government
accounting
b. To conform with International
Accounting Standards
c. To comply with the requirements
of the International Monetary
Fund
d. To generate periodic and relevant
financial reports for better

7. The NGAS cannot be applied to

which of the following?
a.
b.
c.
d.

City of Manila
Department of Tourism
Department of Finance
Barangay San Francisco

7. The NGAS cannot be applied to

which of the following?
a.
b.
c.
d.

City of Manila
Department of Tourism
Department of Finance
Barangay San Francisco

8. The accounting reports of the

government include all of the
following, except
a. Pre-closing and post-closing trial
balance
b. Balance sheet and statement of
income and expenses
c. Cash flow statement
d. Statement of retained earnings

8. The accounting reports of the

government include all of the
following, except
a. Pre-closing and post-closing trial
balance
b. Balance sheet and statement of
income and expenses
c. Cash flow statement
d. Statement of retained earnings

9. In government accounting,
supplies and materials purchased
for inventory purposes shall be
recorded using
a.
b.
c.
d.

FIFO
Weighted average
Moving average
LIFO

9. In government accounting,
supplies and materials purchased
for inventory purposes shall be
recorded using
a.
b.
c.
d.

FIFO
Weighted average
Moving average
LIFO

10. The objectives of government

accounting include all of the following,
except
a. To produce information concerning
past and present operations
b. To provide for control of the acts of
public bodies and offices in the receipt,
disposition and utilization of funds and
property
c. To report on the financial position,
performance and cash flows of
government agencies
d. To provide information about financial

10. The objectives of government

accounting include all of the following,
except
a. To produce information concerning
past and present operations
b. To provide for control of the acts of
public bodies and offices in the receipt,
disposition and utilization of funds and
property
c. To report on the financial position,
performance and cash flows of
government agencies
d. To provide information about financial

11. The accounting books to be

maintained under NGAS include
I. Regular Agency books cash receipts
journal, cash disbursements journal,
check disbursements journal, general
journal, general ledger and subsidiary
ledger
II. National Government books cash
journal, general journal, general
ledger and subsidiary ledger
a. I only
b. II only
c. Both I and II

11. The accounting books to be

maintained under NGAS include
I. Regular Agency books cash receipts
journal, cash disbursements journal,
check disbursements journal, general
journal, general ledger and subsidiary
ledger
II. National Government books cash
journal, general journal, general
ledger and subsidiary ledger
a. I only
b. II only
c. Both I and II

12. Which of the following is not a

Regular Agency book?
a.
b.
c.
d.

General journal
General ledger
Cash journal
Check disbursements journal

12. Which of the following is not a

Regular Agency book?
a.
b.
c.
d.

General journal
General ledger
Cash journal
Check disbursements journal

13. Which of the following journals

shall be used under the NGAS?
a.
b.
c.
d.

Journal of checks issued

Journal of bills rendered
Journal of analysis of obligations
General journal

13. Which of the following journals

shall be used under the NGAS?
a.
b.
c.
d.

Journal of checks issued

Journal of bills rendered
Journal of analysis of obligations
General journal

14. What is the basis in recording

transactions in the journals?
a.
b.
c.
d.

Journal
Journal
Journal
Journal

entry voucher
of checks issued
and analysis of obligations
of bills rendered

14. What is the basis in recording

transactions in the journals?
a.
b.
c.
d.

Journal
Journal
Journal
Journal

entry voucher
of checks issued
and analysis of obligations
of bills rendered

15. It is the basis for the preparation

of journal entry voucher for final
recording in the cash disbursements
journal
a.
b.
c.
d.

Report of disbursement
Report of cash allocation
Notice of cash allocation
Cash book

15. It is the basis for the preparation

of journal entry voucher for final
recording in the cash disbursements
journal
a.
b.
c.
d.

Report of disbursement
Report of cash allocation
Notice of cash allocation
Cash book

16. It is the formal document issued

by DBM to the head of the agency
containing the authorization,
condition and amount of allocation
a.
b.
c.
d.

Allotment release order

Allotment and obligation slip
Notice of cash allocation
Registry of allotment and
obligation

16. It is the formal document issued

by DBM to the head of the agency
containing the authorization,
condition and amount of allocation
a.
b.
c.
d.

Allotment release order

Allotment and obligation slip
Notice of cash allocation
Registry of allotment and
obligation

17. The Notice of Cash Allocation is

I. An authorization by the DBM to an
agency to withdraw cash from the
National Treasury through the
issuance of Modified Disbursement
System checks
II. An authorization by the legislative
body to make payments out of
government funds under specified
conditions and specific purposes
a. I only
b. II only
c. Both I and II

17. The Notice of Cash Allocation is

I. An authorization by the DBM to an
agency to withdraw cash from the
National Treasury through the
issuance of Modified Disbursement
System checks
II. An authorization by the legislative
body to make payments out of
government funds under specified
conditions and specific purposes
a. I only
b. II only
c. Both I and II

18. The journal entry to be made by the

government agency upon receipt of the
Notice of Cash Allocation is
a. Cash National Treasury, MDS
Subsidy income from National
Government
b. Cash in bank local currency, current
account
Subsidiary income from National
Government
c. Cash in bank local currency, savings
account
Subsidy income from National

18. The journal entry to be made by the

government agency upon receipt of the
Notice of Cash Allocation is
a. Cash National Treasury, MDS
Subsidy income from National
Government
b. Cash in bank local currency, current
account
Subsidiary income from National
Government
c. Cash in bank local currency, savings
account
Subsidy income from National

19. A feature of government

accounting that provides for the
ceiling or maximum amount an
agency can spend or incur in the
performance of its functions is
known as
a.
b.
c.
d.

Budgetary accounting
Responsibility accounting
Obligation accounting
Fund accounting

19. A feature of government

accounting that provides for the
ceiling or maximum amount an
agency can spend or incur in the
performance of its functions is
known as
a.
b.
c.
d.

Budgetary accounting
Responsibility accounting
Obligation accounting
Fund accounting

20. It is a system of prescribing the

procedures for recording
appropriations, allotments and
obligations
a.
b.
c.
d.

Fund accounting
Budgetary accounting
Obligation accounting
Treasury disbursement coding
system

20. It is a system of prescribing the

procedures for recording
appropriations, allotments and
obligations
a.
b.
c.
d.

Fund accounting
Budgetary accounting
Obligation accounting
Treasury disbursement coding
system

21. This consists of the methods and

practices of the government for
planning, programming and
budgeting, and its primary concern
is the availability and use of money
to provide the necessary services
expected of the government
a. New Government Accounting
System
b. National Budget System
c. Modern Accounting System

21. This consists of the methods and

practices of the government for
planning, programming and
budgeting, and its primary concern
is the availability and use of money
to provide the necessary services
expected of the government
a. New Government Accounting
System
b. National Budget System
c. Modern Accounting System

22. It is a statement of estimated

receipts and estimated expenses of
the government which serves as
basis for a general appropriation bill
a.
b.
c.
d.

National government budget

Local government budget
Statement of financial position
Statement of operations

22. It is a statement of estimated

receipts and estimated expenses of
the government which serves as
basis for a general appropriation bill
a.
b.
c.
d.

National government budget

Local government budget
Statement of financial position
Statement of operations

23. Which statement is incorrect concerning

budget preparation?
a. Budget preparation is done by the Congress
of the Republic of the Philippines
b. The budget preparation begins with the
issuance of a budget call issued by the
Department of Budget and Management
c. Budget preparation covers estimation of
government revenue, determination of
budgetary priorities and activities and the
translation of approved priorities and
activities into expenditure levels
d. Zero base budgeting may be used in the
budget preparation

23. Which statement is incorrect concerning

budget preparation?
a. Budget preparation is done by the Congress
of the Republic of the Philippines
b. The budget preparation begins with the
issuance of a budget call issued by the
Department of Budget and Management
c. Budget preparation covers estimation of
government revenue, determination of
budgetary priorities and activities and the
translation of approved priorities and
activities into expenditure levels
d. Zero base budgeting may be used in the
budget preparation

24. It is the enactment of the

general appropriation bill into law by
Congress
a.
b.
c.
d.

Budget
Budget
Budget
Budget

preparation
authorization
execution
accountability

24. It is the enactment of the

general appropriation bill into law by
Congress
a.
b.
c.
d.

Budget
Budget
Budget
Budget

preparation
authorization
execution
accountability

25. It is the implementation of the

national government budget by
different departments and release of
allotments
a.
b.
c.
d.

Budget
Budget
Budget
Budget

preparation
authorization
execution
accountability

25. It is the implementation of the

national government budget by
different departments and release of
allotments
a.
b.
c.
d.

Budget
Budget
Budget
Budget

preparation
authorization
execution
accountability

26. Budget accountability means any of the

following, except
a. Periodic reporting by the government
agencies of performance under the approved
budget
b. Top management review of government
activities and the fiscal and policy
implications thereof
c. The action of COA in assuring fidelity of
government officials and employees by
carrying out the intent of Congress in regard
to their handling of receipts and expenditures
d. Establishment of obligational authority
ceilings, and regulation of fund release and
implementation of cash payment schedule

26. Budget accountability means any of the

following, except
a. Periodic reporting by the government
agencies of performance under the approved
budget
b. Top management review of government
activities and the fiscal and policy
implications thereof
c. The action of COA in assuring fidelity of
government officials and employees by
carrying out the intent of Congress in regard
to their handling of receipts and expenditures
d. Establishment of obligational authority
ceilings, and regulation of fund release and
implementation of cash payment schedule

27. The phase in the national

budget cycle which involves the
comparison of performance with
predetermined plans and the
evaluation of expenditures and
performance is called
a.
b.
c.
d.

Execution
Authorization
Preparation
Accountability

27. The phase in the national

budget cycle which involves the
comparison of performance with
predetermined plans and the
evaluation of expenditures and
performance is called
a.
b.
c.
d.

Execution
Authorization
Preparation
Accountability

28. Zero base budgeting

I. Is a process in the budget preparation
which requires consideration of all
programs, projects and activities with
the use of defined ranking procedures
II. Focuses on the objects of
expenditures, such as salaries and
wages, traveling expenses, freight,
supplies, materials and equipment
a.
b.
c.
d.

I only
II only
Both I and II
Neither I nor II

28. Zero base budgeting

I. Is a process in the budget preparation
which requires consideration of all
programs, projects and activities with
the use of defined ranking procedures
II. Focuses on the objects of
expenditures, such as salaries and
wages, traveling expenses, freight,
supplies, materials and equipment
a.
b.
c.
d.

I only
II only
Both I and II
Neither I nor II

29. It is the preparation of the

national government budget where
the total estimated revenue must be
more than the total estimated
expenditures
a.
b.
c.
d.

Balanced budget
Supplemental budget
Zero base budget
Line item budget

29. It is the preparation of the

national government budget where
the total estimated revenue must be
more than the total estimated
expenditures
a.
b.
c.
d.

Balanced budget
Supplemental budget
Zero base budget
Line item budget

30. This is defined as the services,

products or benefits accruing to the
public estimated in terms of
performance target
a.
b.
c.
d.

Expected results
Program
Project
Resources

30. This is defined as the services,

products or benefits accruing to the
public estimated in terms of
performance target
a.
b.
c.
d.

Expected results
Program
Project
Resources

31. This is defined as cash and other

resources of the government which
are available for any purpose and
which are not by law or contractual
agreement specifically designated
to another fund
a.
b.
c.
d.

General fund
Special fund
Trust fund
Depository fund

31. This is defined as cash and other

resources of the government which
are available for any purpose and
which are not by law or contractual
agreement specifically designated
to another fund
a.
b.
c.
d.

General fund
Special fund
Trust fund
Depository fund

32. Which is not charged with the

government accounting
responsibility?
a. Commission on Audit
b. Department of Budget and
Management
c. Bureau of Treasury
d. Legislative Department

32. Which is not charged with the

government accounting
responsibility?
a. Commission on Audit
b. Department of Budget and
Management
c. Bureau of Treasury
d. Legislative Department

33. Which government body keeps

the general accounts of the
government?
a. Commission on Audit
b. State Accounting and Auditing
Center
c. Department of Finance
d. Department of Budget and
Management

33. Which government body keeps

the general accounts of the
government?
a. Commission on Audit
b. State Accounting and Auditing
Center
c. Department of Finance
d. Department of Budget and
Management

34. The government entity charged

with the responsibility and approval
of accounting system for
government agencies is the
a.
b.
c.
d.

Commission on Audit
Bureau of Treasury
Bangko Sentral ng Pilipinas
Department of Budget and
Management

34. The government entity charged

with the responsibility and approval
of accounting system for
government agencies is the
a.
b.
c.
d.

Commission on Audit
Bureau of Treasury
Bangko Sentral ng Pilipinas
Department of Budget and
Management

35. What is the role of the Bureau of

Treasury in relation to government
accounting responsibility?
a. To receive and keep national funds and
manage or control disbursements
thereof
b. To design, prepare and approve the
accounting system of government
agencies
c. To keep the general accounts of the
national government
d. To prepare the annual financial report
of the national government, its

35. What is the role of the Bureau of

Treasury in relation to government
accounting responsibility?
a. To receive and keep national funds and
manage or control disbursements
thereof
b. To design, prepare and approve the
accounting system of government
agencies
c. To keep the general accounts of the
national government
d. To prepare the annual financial report
of the national government, its

36. Which government body

prepares the annual financial
statements of the national
government, local government,
government agencies and
government-owned or controlled
corporations?
a. Commission on Audit
b. Bureau of Treasury
c. Chief Accountant of each
government agency

36. Which government body

prepares the annual financial
statements of the national
government, local government,
government agencies and
government-owned or controlled
corporations?
a. Commission on Audit
b. Bureau of Treasury
c. Chief Accountant of each
government agency

37. It is the authorization from the

Department of Budget and
Management to an agency to incur
obligation up to a specified amount
that must be within the legislative
appropriation
a.
b.
c.
d.

Obligation
Appropriation
Allotment
Fund release

37. It is the authorization from the

Department of Budget and
Management to an agency to incur
obligation up to a specified amount
that must be within the legislative
appropriation
a.
b.
c.
d.

Obligation
Appropriation
Allotment
Fund release

38. Allotments are recorded in the

registries
a.
b.
c.
d.

At the beginning of the year

At the end of the year
Semiannually
Quarterly

38. Allotments are recorded in the

registries
a.
b.
c.
d.

At the beginning of the year

At the end of the year
Semiannually
Quarterly

39. The term represents the

allotment by Central office to its
Regional office
a.
b.
c.
d.

Special allotment
Regular allotment
Suballotment
Allotment advice

39. The term represents the

allotment by Central office to its
Regional office
a.
b.
c.
d.

Special allotment
Regular allotment
Suballotment
Allotment advice

40. This is the notice of the

allotment transferred by Regional
Office to its operating unit
a.
b.
c.
d.

Letter of advice of allotment

Suballotment
Special allotment
Regular allotment

40. This is the notice of the

allotment transferred by Regional
Office to its operating unit
a.
b.
c.
d.

Letter of advice of allotment

Suballotment
Special allotment
Regular allotment