FINALS (ACTIVITY) Flashcards
Which of the following is not an indicator of reliable measurement for an asset?
a. Benefits can be expected on the basis of available evidence or logic.
b. Valuation method is free from material error or bias.
c. Faithful representation of the asset’s benefits.
d. Reliable information will, without bias or undue error, faithfully represent those
transactions and events
a. Benefits can be expected on the basis of available evidence or logic
It refers to the disbursement authority issued by the DBM to agencies with foreign
operations allowing them to use the income collected by their Foreign Service Posts to cover
their operating requirements.
a. Notice of Cash Allocation (NCA)
b. Tax Remittance Advice (TRA)
c. Cash Disbursement Ceiling (CDC)
d. Non-Cash Availment Authority (NCAA)
c. Cash Disbursement Ceiling (CDC)
Account titles in the Revised Chart of Accounts (RCA) are arranged according to this
sequence
a. Assets, Equity, Liability, Revenue, and Expenses
b. Assets, Liability, Equity, Revenue, and Expenses
c. Assets, Expenses, Liability, Equity and Revenue
d. In no particular order
b. Assets, Liability, Equity, Revenue, and Expenses
Which of the following is an indication of impairment from internal sources?
a. Significant changes with an adverse effect on the entity have taken place during the
period, or will take place in the near future, in the technological, market, economic, or
legal environment in which the entity operates, or in the market to which an asset is
dedicated.
b. During the period, an asset’s market value has declined significantly more than would be
expected as a result of the passage of time or normal use.
c. Significant changes with an adverse effect on the entity have taken place during the
period, or are expected to take place in the near future, in the extent to which, or the
manner in which, an asset is used or is expected to be used.
d. Market interest rates or other market rates of return on investments have increased
during the period, and those increases are likely to affect the discount rate used in
calculating an asset’s value in use and decrease the asset’s recoverable amount
materially.
c. Significant changes with an adverse effect on the entity have taken place during the
period, or are expected to take place in the near future, in the extent to which, or the
manner in which, an asset is used or is expected to be used.
Entity A, a government entity, had the following transactions during the period:
● Received Notice of Cash Allocation (NCA) amounting to ₱1,226,618.
● Earned total revenue of ₱1,598,000 from billings and collections of unbilled income.
● Incurred total expenses of ₱791,652.
● Remitted total taxes withheld of ₱87,460 to the BIR through Tax Remittance Advice
(TRA).
● The “Cash-Modified Disbursement System (MDS), Regular” has an unused balance of
₱132,196 at the end of the period.
How much is the surplus (deficit) for the period?
a. 1,988,230
b. 1,898,230
c. 1,742,320
d. 1,988,320
a. 1,988,230
Entity A grants a cash advance of ₱2,000 for the traveling expenses of an officer. Actual
expenses amount to ₱1,800. The officer remits the excess cash advance.
6. The entry to record the grant of cash advance is
a. Advances to Officers and Employees
Cash – Disbursing Officer
2,000
2,000
b. Advances to Officers and Employees
Cash – Modified Disbursement
System (MDS), Regular
2,000
2,000
c. Advances to Officers and Employees
Cash – Collecting Officer
2,000
2,000
d. Any of these
b. Advances to Officers and Employees
Cash – Modified Disbursement
System (MDS), Regular
2,000
2,000
The disbursement is recorded in the
a. Journal and Ledger
b. RAOD
c. ORS
d. All of these
d. All of these
The entry to record the liquidation of the cash advance is
a. Traveling Expenses – Foreign
Advances to Officers and Employees
1,800
1,800
b. Traveling Expenses – Foreign
Due to Officers and Employees
1,800
1,800
c. Cash – Collecting Officers
Advances to Officers and Employees
1,800
1,800
d. a and c
a. Traveling Expenses – Foreign
Advances to Officers and Employees
1,800
1,800
The entry to record the receipt and deposit of refund of excess cash advance is
a. Cash – Collecting Officers
Advances to Officers and Employees
200
200
b. Cash – Treasury/Agency Deposit, Regular
Cash – Collecting Officers
200
200
c. a and b
d. neither a nor b
c. a and b
This refers to valid and legal obligations of NGAs/OUs, for which, goods/services/projects
have been delivered/rendered/completed and accepted, regardless of the year when these
obligations were incurred.
a. Accounts Payable
b. Obligations
c. Not Yet Due and Demandable
d. Liability
a. Accounts Payable
Which of the following is not an essential characteristic of a financial instrument?
a. There must be a contract.
b. There are at least two parties to the contract.
c. The contract gives rise to both a financial asset of one party and a financial liability or
equity instrument of another party.
d. It is subsequently measured at fair value.
d. It is subsequently measured at fair value.
When determining depreciation, an entity considers all of the following except
a. Initial cost
b. Useful life
c. Expected residual value at the end of the asset’s useful life
d. Whether the asset is classified as with finite or indefinite useful life.
d. Whether the asset is classified as with finite or indefinite useful life
Entity A spends ₱20,000 on the repair of one of its equipment. It is not clear whether the
repair is a major repair or a minor repair. In accordance with the GAM for NGAs, how
should Entity A account for the repair cost?
a. As a minor repair
b. As a major repair
c. As an addition
d. a or b
a. As a minor repair
The Statement of Comparison of Budget and Actual Amounts is dated
a. As of the reporting date
b. For a given reporting period
c. Either a or b
d. Not dated
b. For a given reporting period
The main purpose of the Statement of Comparison of Budget and Actual Amounts is
a. to provide a basis for increasing the budget in the following fiscal year.
b. to provide information regarding the government’s financial condition vis-a-vis the
resources entrusted to it.
c. to enhance the transparency of government’s financial reporting.
d. to provide information regarding the government’s financial performance.
c. to enhance the transparency of government’s financial reporting.
The statement of management responsibility for financial statements attached to a
government agency’s combined financial statements (operating units, regional offices, and
main office) would most likely be
a. dated not later than February 14 of the year following the reporting period.
b. dated not earlier than February 14 of the year following the reporting period.
c. signed by the agency’s Head, together with the agency’s Secretary and Treasurer.
d. none of these
a. dated not later than February 14 of the year following the reporting period.
Entity A is a government hospital. Entity A operates a pharmacy within the hospital. Entity
A would most likely recognize revenue from sales of medicines in the pharmacy
a. upon billing, when goods are transferred to the buyer.
b. on a straight-line basis.
c. by reference to the stage of completion at the reporting date.
d. in accordance with the substance of the relevant agreement which requires an in-depth
analysis by a CPA who studied accounting for four to five years, or more
a. upon billing, when goods are transferred to the buyer.
Which of the following is not one of the classifications of inventory held by a government
entity?
a. Inventory Held for Distribution
b. Inventory Held for Long-term Use
c. Inventory Held for Manufacturing
d. Inventory Held for Consumption
e. Semi-Expendable Property
b. Inventory Held for Long-term Use
Which of the following may not be included in the inventories of a government entity?
a. rice and other welfare goods held for distribution
b. raw materials and work-in-process
c. accountable forms
d. equipment costing ₱15,000
d. equipment costing ₱15,000
Entity A exchanges an item of PPE with Entity B. How should Entity A account for any cash
paid or received from the exchange?
a. Add the cash paid to the initial measurement of the asset received.
b. Deduct the cash paid from the initial measurement of the asset received.
c. Add the cash received to the initial measurement of the asset received.
d. Account for any cash paid or received in gain or loss but not on the initial measurement
of the asset received
a. Add the cash paid to the initial measurement of the asset received.
According to the GAM for NGAs, these assets are those which have historical, cultural and
environmental significance, and are intended to be preserved for future generations.
a. Cultural assets
b. Infrastructure assets
c. Heritage assets
d. Historical assets
c. Heritage assets
At the beginning of Year 1, a government entity acquires an intangible asset for ₱100,000. The
intangible asset has a useful life of 10 years. At the end of Year 3, the entity determines an
indication of impairment and makes the following estimates:
Fair value less costs to sell 60,000
Value in use 50,000
How much is the impairment loss?
a. 10,000
b. 20,000
c. 30,000
d. 0
a. 10,000
At the end of Year 6, Entity A determines an indication that the previous impairment may
no longer exist and makes the following estimates:
Fair value less costs to sell 32,000
Value in use 38,000
How much is the gain on the reversal impairment loss?
a. 3,714
b. 5,714
c. 8,714
d. 0
a. 3,714
Entity A leased a new machine to Entity B on January 1, 20x1. The lease expires on
January 1, 20x6. The annual rental is ₱90,000. Additionally, on January 1, 20x1, Entity B
paid ₱50,000 to Entity A as a lease bonus and ₱25,000 as a security deposit to be refunded
upon expiration of the lease. In Entity A’s 20x4 statement of financial performance, the
amount of rental revenue should be
a. 140,000
b. 125,000
c. 100,000
d. 90,000
c. 100,000
Which of the following statements is correct regarding the presentation of financial
statements by government entities?
a. Changes in accounting policies may be accounted for by prospective application.
b. Non-adjusting events are never recognized but are always disclosed.
c. Prior period errors are corrected by retrospective application.
d. Just like business entities, government entities may (if they choose to) prepare interim
financial statements on a quarterly basis
a. Changes in accounting policies may be accounted for by prospective application.
The notes to the financial statements is least likely to be expected to show which of the
following information?
a. General information on the reporting entity.
b. Current and noncurrent distinctions of assets and liabilities.
c. Statement of compliance with the PPSAS and basis of preparation of financial
statements.
d. Summary of significant accounting policies.
b. Current and noncurrent distinctions of assets and liabilities.
A change in accounting estimate is accounted for
a. using the transitional provision, if any.
b. by retrospective application.
c. by prospective application.
d. any of these
c. by prospective application.
This is attached to the annual general purpose financial statements of a government entity
as a cover letter.
a. President’s Budget Message
b. Report on Highlights and Executive Summary
c. Statement of Management Responsibility for Financial Statements
d. Dedications, acknowledgments and best wishes.
c. Statement of Management Responsibility for Financial Statements
The main purpose of the statement of comparison of budget and actual amounts is
a. to apply the concepts of responsibility accounting.
b. to enhance the transparency of financial reporting of the government.
c. to show information not presented on the face of the other components of a complete
set of general purpose financial statements.
d. to provide vital information needed in impeachment proceedings
b. to enhance the transparency of financial reporting of the government.
The operator in a service concession arrangement is a
a. government entity
b. private entity
c. separate entity
d. jeepney
b. private entity
Which of the following applies to business entities but not to government entities?
a. Finance lease accounting by lessors.
b. Noncurrent asset held for sale classification.
c. Direct method of presenting cash flows from operating activities.
d. Cash equivalents classification for debt instruments acquired three months before their
maturity date.
b. Noncurrent asset held for sale classification
