CH6-CH7

Question 1

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

Answer 1

Revenue Funds

Question 2

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

Answer 2

Permanent Committee

Question 3

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 3

Tax Revenue

Question 4

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

Answer 4

Inter-Agency Transfer of Fund

Question 5

Consist of voluntary transfers 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 5

Gifts and Donations

Question 6

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

Answer 6

Financial Statements

Question 7

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

Answer 7

Post-Closing Trial Balance

Question 8

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

Answer 8

Inter-agency Transfer of Fund

Question 9

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

Answer 9

Accrued Items

Question 10

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

Answer 10

Loss of Assets

Question 11

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 11

Miscellaneous Income

Question 12

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

Answer 12

Deferred Items

Question 13

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 13

Accumulated Surplus / Deficit

Question 14

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 14

Exchange Transactions

Question 15

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 15

Revenue

Question 16

Give 6 examples of miscellaneous transactions of the government.

Answer 16

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. Collection made on behalf of another entity or non-government/private organizations
5. Intra-agency Fund Transfer
6. Inter-agency Fund Transfer

Question 17

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

Answer 17

1. Asset/Expense Adjustments
2. Liability/Revenue Adjustments

Question 18

What are the 11 qualitative characteristics of financial reporting?

Answer 18

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

Question 19

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

Answer 19

1. Tax Revenue - Individual and Corporation
2. Tax Revenue - Property
3. Tax Revenue - Goods and Services

Question 20

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

Answer 20

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

Question 21

The Administrative Code of the National Government requires 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 or F?

Answer 21

TRUE

Question 22

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

Answer 22

FALSE

Question 23

Donations in cash or in kind shall be recognized as revenue. T or F?

Answer 23

TRUE

Question 24

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

Answer 24

TRUE

Question 25

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

Answer 25

TRUE

Question 26

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

Answer 26

FALSE

Question 27

Loans and borrowings are not income but always classified and accounted for, as revenues. T or F?

Answer 27

FALSE

Question 28

Statement of Financial Performance is a statement summarizing all the cash activities of an agency. T or F?

Answer 28

FALSE

Question 29

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 or F?

Answer 29

FALSE

Question 30

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

Answer 30

TRUE

Question 31

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

Answer 31

TRUE

Question 32

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 or F?

Answer 32

TRUE

Question 33

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

Answer 33

FALSE

Question 34

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

Answer 34

FALSE

Question 35

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

Answer 35

TRUE