GOVACC FINALS 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
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
C
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
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
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.
- 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
The disbursement is recorded in the
a. Journal and Ledger
b. RAOD
c. ORS
d. All of these
D
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
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
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
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
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
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
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
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
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
.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
. 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
.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
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
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
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
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
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. 90,00
C
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
.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
The operator in a service concession arrangement is a
a. government entity
b. private entity
c. separate entity
d. jeepney
B
.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
Which of the following applies to business entities but not to government entities?
a. Accounting for biological assets at fair value less costs to sell.
b. Preparation of interim financial statements.
c. Presenting information on earnings per share.
d. Continued depreciation of idle equipment.
C
