CE 3 - Chapter 6-7

Question 1

Give examples of miscellaneous transactions of the government (6)

Answer 1

1. Receipt of subsidy/assistance from other NGAs, LGUs, GOCCs, and other Funds
2. Performance bond/security deposits
3. Refund of overpayment of expenses
4. Collections made on behalf of another entity or non-government/private organization
5. Intra-Agency fund transfer
6. Inter-Agency fund transfer

Question 2

What are the two types of deferred adjusting journal entries under the new government accounting system?

Answer 2

1. asset/expense adjustments
2. liability/revenue adjustments

Question 3

What are the qualitative characteristics of financial reporting? (11)

Answer 3

1. Understandability
2. Relevance
3. Materiality
4. Timeliness
5. Reliability
6. Faithful Representation
7. Substance over Form
8. Neutrality
9. Prudence
10. Completeness
11. Comparability

Question 4

Tax revenues are taxes levied on/to? (3)

Answer 4

1. Individuals & Corporations
2. Property
3. Goods and services

Question 5

What are the sources of revenues from exchange transactions? (3)

Answer 5

1. Sale of Goods
2. Supply of Services
3. Use by Others of Entity Assets

Question 6

The Administrative Code of the National Government required that all income accruing to the departments, officers and agencies, by virtue of the provisions of existing laws, orders and regulations shall be deposited in the National Treasury or in the duly authorized depository bank of the government.

T/F

Answer 6

TRUE

Question 7

If goods in-kind are received without conditions attached to it, the receiving entity shall recognize a liability

T/F

Answer 7

FALSE

Question 8

Donations in cash or in kind shall be recognized as revenue

T/F

Answer 8

TRUE

Question 9

If pledges are received and such are transferred to the recipient entity, the entity shall recognize a gift or donation.

T/F

Answer 9

TRUE

Question 10

The agency, upon the receipt of performance bond in the form of cash or certified check, shall credit Guaranty/Security Deposits Payable

T/F

Answer 10

TRUE

Question 11

When fines were collected by an entity acting as an agent, the fine will be recognized as revenue by the said entity.

T/F

Answer 11

FALSE

Question 12

Loans and borrowings are not income but always classified and accounted for, as revenues

T/F

Answer 12

FALSE

Question 13

Statement of Financial Performance is a statement summarizing all the cash activities of an agency

T/F

Answer 13

FALSE

Question 14

The criteria of usefulness states that the usefulness of financial statements is impaired if they are not made available to users within a reasonable period after the reporting date.

T/F

Answer 14

FALSE

Question 15

Errors include the effects of mathematical mistakes, mistakes in applying accounting policies, oversights or misinterpretations of facts, and fraud.

T/F

Answer 15

TRUE

Question 16

Under the existing rules and regulations, all collections are deposited to the National
Treasury, directly or through the bank.

T/F

Answer 16

TRUE

Question 17

An entity shall present, either on the face of the Statement of Financial Performance or in the notes, an analysis of expense using a classification based on either the nature of expense or their function within the entity, whichever provides information that is reliable and more relevant

T/F

Answer 17

TRUE

Question 18

Accounting estimates are specific principles, bases, conventions, rules and practices applied by an entity in preparing and presenting financial statements.

T/F

Answer 18

FALSE

Question 19

The journal entry to record receipt of performance bonds in the form of surety bond includes a debit to other current asset.

T/F

Answer 19

FALSE

Question 20

Fines include economic benefits or service potential received or receivable as a consequence of the breach of laws or regulations.

T/F

Answer 20

TRUE

Question 21

This comprise all funds derived from the income of any agency of the government and available for appropriation or expenditure in accordance with law.

Answer 21

REVENUE FUNDS

Question 22

They determine the rules and regulations for recording and disbursing amounts received
in trust and other business-type activities of the government

Answer 22

PERMANENT COMMITTEE

Question 23

These are economic benefits or service potentials compulsory paid or payable to public sector agencies, in accordance with laws and/or regulations established to provide revenue to the government

Answer 23

TAXES

Question 24

Pertains to transfer of cash from another agency to implement the project of another agency.

Answer 24

INTER-AGENCY TRANSFERRED FUND

Question 25

Consist of voluntary transfer of assets including cash or other monetary assets, goods-in-kind, and services-in-kind that one agency makes to another, normally free from stipulations.

Answer 25

GIFTS AND DONATIONS

Question 26

Are structured representations of the financial position and financial performance of an entity.

Answer 26

FINANCIAL STATEMENTS

Question 27

Shall be prepared after recording the closing and journal entries in the General Journal and posting these entries to the General Ledger.

Answer 27

POST-CLOSING TRIAL BALANCE

Question 28

A transfer of cash from another agency to implement the project of another agency.

Answer 28

INTER-AGENCY TRANSFER OF FUNDS

Question 29

Are adjusting entries for economic activities already undertaken but not yet recorded as asset and revenue accounts or a liability and expense accounts.

Answer 29

ACCRUED ITEMS

Question 30

The account to be used (debit) when the request for relief from accountability for shortages or loss of funds is granted.

Answer 30

LOSS OF ASSETS??

Question 31

The cash overage discovered by the Auditor that cannot be satisfactorily explained shall be forfeited in favor of the government. It shall be taken up as ______.

Answer 31

MISCELLANEOUS INCOME

Question 32

These are adjustment which involve unearned revenue where the agency receives the asset, usually cash, even before the income is actually earned.

Answer 32

DEFERRED ITEMS

Question 33

Used to record the cumulative results of normal and continuous operations of an agency including prior period adjustments, effect of changes in accounting policy and other capital adjustments.

Answer 33

ACCUMULATED SURPLUS/(DEFICIT)

Question 34

Are transactions in which one entity receives assets or services, or has liabilities extinguished, and directly gives approximately equal value to another entity in exchange.

Answer 34

EXCHANGE TRANSACTIONS

Question 35

Is the gross inflow of economic benefits or service potential during the reporting period when those inflows result in an increase in net assets/equity, other than increases relating to contributions from owners.

Answer 35

REVENUE