Chapter 6 - Accounting For Income, Collections And Related Transactions

Question 1

This represents all funds received by the government from taxes, grants, aids and borrowings

Answer 1

Government income

Question 2

This represents funds received, which do not increase any liabilities or reserves of the government

Answer 2

Government revenue

Question 3

Two general classifications of government income

Answer 3

Tax revenue

general income

Question 4

Tax revenue includes the following

Answer 4

Individual and corporation 
property 
goods and services 
others
fines and penalties

Question 5

General income includes the following

Answer 5

Service and business income 
business income  
assistance and subsidy 
shares, grants and donations 
other non-operating income

Question 6

This account classification Encompasses all taxes imposed on taxable income, properties, and use or sale of goods and services, taxes on international trade and transactions and other taxes including fines and penalties

Answer 6

Tax revenue

Question 7

This account classification encompasses all types of revenue/income generated by the government agencies in the exercise of their administrative and regulatory function, income frompublic Enterprises/investment, and income from grants and donations including subsidies

Answer 7

General income

Question 8

Methods of accounting for income

Answer 8

Accrual method
modified accrual
cash basis

Question 9

This method shall be used by national government agencies when income is realize during the accounting period regardless of cash receipts

Answer 9

Accrual method

Question 10

under this method, income of the agency is recorded as “deferred credits to income” and the appropriate receivable account is debited.

Answer 10

Modified accrual

Question 11

This method shall be used for all taxes, fees, charges and other revenue where accrual method is impractical

Answer 11

Cash basis

Question 12

General procedures for cash collection: domestic source

Answer 12

1. The national government agency collect revenue of the government from whatever sources
2. the agency remits the collections to the bureau of treasury through authorized government depository Banks
3. The authorized government depository banks advises the Bureau of treasury
4. Bureau of treasury records the collection in its books
5. The Bureau of treasury replenishes the modified disbursement system account with the bank for checks negotiated

Question 13

Types of collections as to authority to use:

Answer 13

without authority to use 
with authority to use 
authority with limitations 
income from sale of equipment 
grants and donations intended for an agency use 
miscellaneous collections

Question 14

According to NBC number 556 dated January 5, 2015 the following fees and income maybe use by the agency:

Answer 14

Fees collected from seminars, trainings and conferences conducted
Proceeds from the sale of official publication
Service fees collected from yes I asked GSIS, HDMF, PHIC, mutual benefits associations/cooperatives..
excess income

Question 15

The receipt and collection process

Answer 15

1. The collecting officer receives payment from creditors and issues official receipt
2. The collecting officer records collections in the Cash Receipt Record
3. The collecting officer deposit collection
4. The Collecting officer records deposit in cash receipt record
5. The Collecting officer prepares the report of collections and deposit and forwards to the accounting unit with copies of official receipts and validated deposit slips
6. Accounting unit prepares journal entry vouchers and records in cash receipts journal

Question 16

All income Accruing to the department, offices and agencies, by virtue of the provisions of the existing laws, order shall be deposited in the _____________ or _____________

Answer 16

National treasury; duly authorized depository bank