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Documents > GOV. ACC. - T/F AND MULTIPLE CHOICE: MIDTERM > Flashcards

GOV. ACC. - T/F AND MULTIPLE CHOICE: MIDTERM Flashcards

1
Q

All revenues shall be remitted to the BTr and included in the Special Fund, unless another law specifically requires otherwise.

TRUE or FALSE

A

FALSE

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2
Q

Payments to government entities in the form of checks are not allowed

TRUE or FALSE

A

FALSE

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3
Q

Revenues of a government entity arise from exchange transactions only.

TRUE or FALSE

A

FALSE

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4
Q

According to the GAM for NGAs, revenue from exchange transactions are measured at the amount of cash received.

TRUE or FALSE

A

FALSE

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5
Q

When cash flows are deferred, the fair value of the consideration receivable is its present value.

TRUE or FALSE

A

TRUE

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6
Q

The constructive remittance of taxes withheld through the TRA gives rise to the recognition of revenue.

TRUE or FALSE

A

TRUE

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7
Q

According to the GAM for NGAs, the receipt of concessionary loans by government entities may give rise to revenue recognition.

TRUE or FALSE

A

TRUE

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8
Q

The taxable event for income tax is the passage of the time period for which the tax is levied.

TRUE or FALSE

A

FALSE

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9
Q

Taxes are compulsory payments, imposed on persons, properties or activities, intended to provide revenue to the government. Taxes included fees, fines and penalties.

TRUE or FALSE

A

FALSE

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10
Q

The main source of revenue for the government is taxes.

TRUE or FALSE

A

TRUE

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11
Q

Which of the following is a non-exchange transaction?

a. Leasing
b. Collection of taxes
c. Rendering of legal services
d. Collection of tuition fees

A

b. Collection of taxes

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12
Q

Entity A enters into a long-term contract to provide services. The outcome of the transaction can be estimated reliably and the progress on the contract can be measured with sufficient reliability. According to the PPSAS, how should Entity A recognize revenue from the contract?

a. On a straight line basis over the contract term.
b. By reference to the stage of completion of the contract at the reporting date.
c. Full recognition of contract price upon completion of the contract.
d. Only to the extent of costs that are expected to be recovered.

A

b. By reference to the stage of completion of the contract at the reporting date.

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13
Q

According to the GAM for NGAs, interest revenue is recognized

a. on a time proportion basis using the effective interest method.
b. on a straight line basis.
c. in accordance with the substance of the relevant loan agreement.
d. when the entity’s right to receive payment is established.

A

a. on a time proportion basis using the effective interest method.

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14
Q

The taxable event for Value added tax (VAT) is the

a. undertaking of taxable income.
b. earning of taxable income.
c. movement of dutiable goods or services across the customs boundary.
d. any of these

A

a. undertaking of taxable income.

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15
Q

Which of the following would result to an increase or decrease in the revenue reported by a government entity in its statement of financial performance>

a. Impairment loss on an amount already recognized as revenue.
b. Receipt of a pledge.
c. Receipt of donation in the form of services in kind.
d. The repayment of a loan payable is forgiven.

A

d. The repayment of a loan payable is forgiven.

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16
Q

It is the type of fund held by a government entity that is designated for special purposes.

a. General Fund
b. Special Fund
c. Trust Fund
d. Fiduciary Fund

A

b. Special Fund

17
Q

The national government receives a foreign grant conditioned on the construction of a public infrastructure. According to the GAM for NGAs, when does the national government recognize revenue from the grant (i.e., credit to the ‘Income from Grants and Donations in Cash’ account)?

a. Upon receipt of the grant.
b. When the grant becomes receivable, provided there is reasonable assurance that the attached condition will be satisfied.
c. When the condition is met.
d. When the related expenses for which the grant is intended to compensate are incurred.

A

c. When the condition is met.

18
Q

The receipt of which of the following may not give rise to revenue by a government entity?

a. Notice of Cash Allocation
b. Tax Remittance Advice
c. Subsidy from another government agency
d. Inter-agency fund transfer

A

d. Inter-agency fund transfer

19
Q

A government entity collects fees for the processing of certain permits. The processing of a permit would normally take a few minutes. The processing fee is collected upon issuance of the permit. This government entity would normally recognize revenue from permit fees

a. on a straight line basis.
b. by refence to the stage of completion.
c. upon collection of the fee.
d. when the significant risks and rewards are transferred to the customer.

A

c. upon collection of the fee.

20
Q

The receipt of a performance bond or a security deposit is credited to a

a. liability account
b. revenue account
c. cash account
d. a and c

A

a. liability account

21
Q

Which of the following is not one of the fundamental principles for revenue under P.D. No. 1445?

a. All revenues shall be remitted to the BTr and included in the General Fund, unless another law specifically allows otherwise.
b. Recording of revenue in other types of funds (e.g., Special Fund) shall be made only when authorized by law.
c. Collections of revenue shall be properly acknowledged through pre-numbered Official receipts.
d. All collections of revenue must be in the form of cash. Checks are not acceptable.

A

d. All collections of revenue must be in the form of cash. Checks are not acceptable.

22
Q

Imposition and collection of tax revenue is considered a(an)

a. exchange transaction
b. non-exchange transaction
c. donation
d. any of these

A

b. non-exchange transaction

22
Q

According to the GAM for NGAs, when the outcome of a service contract cannot be estimated reliably, revenue is recognized

a. on a straight line basis over the periods the services are rendered.
b. by reference to the contract’s stage of completion at each reporting date.
c. only to the extent of costs that are expected to be recovered.
d. only upon the completion of the contract.

A

c. only to the extent of costs that are expected to be recovered.

22
Q

According to the GAM for NGAs, all of the following criteria must be met before a government entity recognizes revenue from the sale of goods, except

a. Significant risks and rewards of ownership of the goods are transferred to the buyer and the entity does not retain control over those goods.
b. It is probable that economic benefits will flow to the entity.
c. The amounts of revenue and related costs can be measured reliably.
d. The stage of completion can be measured reliably.

A

d. The stage of completion can be measured reliably.

23
Q

Entity A sells goods with a list price of ₱100,000, on account. The credit term is 20% and 10%. The journal entry to recognize the revenue includes all of the following except?

a. A debit to accounts receivable for ₱72,000.
b. A credit to sales revenue for ₱72,000.
c. A debit to sales discount for ₱28,000.
d. All of these are included in the entry.

A

c. A debit to sales discount for ₱28,000.

24
Q

According to the GAM for NGAs, an exchange goods or services of similar nature and value between entities

a. gives rise to revenue measured at the fair value of the goods or services received, adjusted for any cash paid or received on the exchange.
b. gives rise to revenue measured at the fair value of the goods or services given up, adjusted for any cash paid or received on the exchange.
c. a or b, whichever is more clearly determinable.
d. does not give rise to revenue.

A

d. does not give rise to revenue.

25
Q

Gifts, donations and goods in-kind with condition are recognized

a. as revenue immediately upon the receipt thereof.
b. initially as liability and recognized as revenue inly when the condition is satisfied.
c. as revenue measured at fair value only when actually received.
d. directly in equity.

A

b. initially as liability and recognized as revenue inly when the condition is satisfied.

26
Q

According to the GAM for NGAs, which of the following may never give rise to revenue for a government entity?

a. Services in-kind
b. Debt forgiveness
c. Concessionary loan
d. Grant with condition

A

a. Services in-kind

27
Q

When an amount already recognized as revenue becomes subsequently uncollectible, it is

a. recognized as expense.
b. recognized as an adjustment to the revenue originally recognized.
c. either a or b as an accounting policy choice
d. not recognized

A

a. recognized as expense.

28
Q

Which of the following receipts of a government entity will give rise to revenue recognition?

a. Receipt of excess cash advance
b. Receipt of refund for overpayment of expenses
c. Receipt of performance bond
d. Receipt of subsidy from the National Government or other National Government Agencies.

A

d. Receipt of subsidy from the National Government or other National Government Agencies.

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