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ACCO 30033 Quiz 1 and 2: Government Accounting Concepts and Problems

1. Department of Public Works and Highways (DPWH) purchased Construction Equipment from a VAT-registered
supplier on March 10, 2020, and were available for use only on April 05, 2020. The invoice price (exclusive of
VAT) amounted to P2,500,000. The estimated useful life of the asset is 10 years. Depreciation is to be
considered as one month if available for use on or before the 15th of the month; however, if it is available for use
after the 15th of the month, depreciation is for the succeeding month. Assume that the company estimates a 5%
salvage value for the construction equipment. How much is the total amount credited to Due to BIR if the
equipment was paid on April 10, 2020?
a. 156,250
b. 175,000 2,500,000 * 0.06
c. 150,000
d. 133,929
2. The following account balances were taken from the books of a government agency: Salaries & Wages –
Regular, P7,950,000; PERA, P300,000; Other Supplies & Materials Expense, P412,500; Water Expenses,
P45,000; Electricity Expenses, P75,000; Telephone Expenses, P22,500; Travelling Expenses, P127,500;
Representation Allowance & Transportation Allowance (RATA), P225,000; Depreciation Expenses, P150,000;
Subsidy from National Government, P10,750,000; Interest Income, P7,500; Interest Expense, P12,000; Bank
Charges, P2,250; Retirement & Life Insurance Premiums, P795,000; PAG-IBIG Contributions, P100,000;
PHILHEALTH Contributions, P79,500; Employees Compensation Insurance Premiums, P50,000. How much is
the total amount of expenses under Personnel Services (PS)?
a. 8,674,500
b. 8,475,000
7,950,000 + 300,000 + 225,000 + 795,000 + 100,000 + 79,500 + 50,000
c. 8,250,000
d. 9,499,500
3. It refers to authorizations made by law for payments to be made with government funds under specified
conditions for specified purposes.
a. Appropriations
b. Allotments
c. Allocation
d. Obligation
4. The current chairman of the Commission on Audit (COA) is:
a. Emilio Aguinaldo
b. Michael Aguinaldo
c. Martin Aguinaldo
d. Marvin Aguinaldo
5. The following obligations are recorded in the RAOD-MOOE, except
a. Interest Expenses
b. Rent Expenses
c. Office Supplies Expenses
d. Electricity Expenses
6. A government agency ordered a piece of office equipment for P1,200,000 on August 20, 2020. The equipment
was delivered to the government agency on September 11, 2020, and immediately used. The asset has an
estimated useful life of 10 years. The book value of the equipment on December 31, 2021, is:
a. 1,048,000 1,200,000
b. 1,062,000 (38,000) [(1,200,000 * 0.95 / 10) * 4/12]
c. 1,087,500 (114,000) [1,200,000 * 0.95 / 10]
d. 1,040,000 = 1,048,000
7. Department of Finance granted cash advance for the traveling expenses of its Department Heads to attend a
convention in Davao in the amount of P500,000. The Department Heads submitted a liquidation report &
supporting documents worth P550,000. The amount is reviewed & validated by the Accountant, what is the
credit journal entry to record the liquidation of the cash advance?
a. Advances to Officers and Employees, P500,000
Due to Officers and Employees 550,000
b. Due from Officers and Employees, P550,000
c. Advances to Officers and Employees, P550,000 Advances to Officers & Employees 500,000
d. Advances to Special Disbursing Officer,500,000 Cash - MDS, Regular 50,000
8. The following are the selected transactions of a national government agency:
 Signed a contract for the construction of the building, Contract Price-P100 Million.
 Advances to contractors were made, P15% of the contract price.
 Received the progress billings from the contractor, 30% completion.
 Paid the amount due to the contractor. Deductions are as follows:
Recoupment of the advances, 20% of the billings
Retention, 10% of the billings
Withholding tax
The amount credited to Due to BIR was:
a. 937,500
b. 1,875,000
(30,000,000 / 1.12) * 0.07
c. 1,607,142.86
d. 0
9. The minimum amount of an individual asset to be recognized as PPE.
a. 25,000
b. 20,000
c. 15,000
d. 10,000
10. These are expenditures that could not pass the test of prudence or the required diligence of a good father of a
family, thereby not responsive to the exigencies of the service. These expenditures are not supportive of the
objective and mission of the agency relative to the nature of its operations.
a. Irregular
b. Excessive
c. Unnecessary
d. Extravagant
11. A national government agency purchased office supplies from a VAT-registered company for P851,200. The
agency also paid the P179,200 MERALCO bill and the PLDT bill of P134,400. How much is the total amount
remitted to the BIR thru the tax remittance advice (TRA)?
a. 58,240 Office Supplies: (851,200 / 1.12) * 0.06 = 45,600
b. 14,784
MERALCO: (179,200 / 1.12) * 0.07 = 11,200 45,600 + 11,200 + 8,400
c. 52,000
PLDT: (134,400 / 1.12) * 0.07 = 8,400
d. 65,200
12. A government budgetary process wherein the President, through the assistance of the DBM, shall prepare &
submit to the Congress a Budget of Expenditures and Sources of Financing (BESF), including receipts from
existing and proposed revenue measures.
a. Budget Preparation and Presentation
b. Budget Authorization
c. Budget Execution
d. Budget Accountability
13. The following are the selected transactions of a national government agency for the month of March 2020:

Total Allotment for MOOE 10,000,000


Total NCA for MOOE 7,500,000
Total Obligation for MOOE 8,000,000
Total Obligations liquidated (disbursement) for MOOE 7,000,000

What is the total amount of unobligated allotment for MOOE?


a. 2,500,000
b. 1,500,000 10,0000,000 - 8,000,000
c. 2,000,000
d. 1,000,000
14. Checks issued by the government agencies chargeable against the account of the Treasurer of the Philippines
a. Commercial checks
b. MDS checks
c. Managers Checks
d. NCA checks
15. Purchases without any bidding is an example of:
a. Irregular Expenditures
b. Unconscionable Expenditures
c. Excessive Expenditures
d. Unnecessary Expenditures
16. It signals the start of the preparation of the budget proposal.
a. Budget message
b. Budget call
c. Budget proposal
d. Budget memorandum
17. A serially numbered document prescribed by the DBM that should be used by the NGAs in the remittance of
withheld taxes on funds coming from the DBM.
a. Notice of Cash Allocation
b. Notice of Transfer of Allocation
c. Tax Remittance Advice
d. BIR Form 1601-C
18. Which of the following is not an expense under the classification Personnel Services?
a. Representation Expenses
b. Personnel Economic Relief Allowance
c. Salaries and Wages-Regular
d. Representation Allowance
19. A government agency had the following items for disbursements:
 Electricity Expenses 500,000
 Rent/Lease Expenses 246,400
 Telephone Expenses 120,000
 Office Supplies Inventory 67,200
 Office Equipment 224,000
How much is the net amount paid for rental?
a. 224,400
b. 231,000 246,400
(22,000) [246,400 / 1.12 * 0.10]
c. 233,200
= 224,400
d. 221,760
20. The debit entry to record the cash collections in a national government agency is:
a. Cash Local Treasury
b. Cash-Collecting Officer
c. Cash in Bank-Local Currency-Current Account
d. Cash-MDS, Regular
21. Which of the following income of NGAs is classified as service income?
a. Interest Income
b. School Fees
c. Passport and VISA Fees
d. Rent/Lease Income
22. Department of Finance granted cash advance for the traveling expenses of its Department Heads to attend a
convention in Davao in the amount of P500,000. The Department Heads submitted the liquidation report and
supporting documents of cash advances and refunded P20,000 of the excess cash advance. The debit journal
entry to record the refund of excess cash advance includes
a. Cash-MDS, Regular, P20,000
b. Cash-Disbursing Officer, P20,000 Cash-Collecting Officer 20,000
c. Cash-Collecting Officer, P20,000 Advances to Officers & Employees 20,000
d. Advances to Officers and Employees, P20,000
23. The government agency that audits the general accounts of the Government, promulgates accounting rules and
regulations, and submits the annual financial report of the Government, its subdivisions and agencies is:
a. DBM
b. COA
c. DOF
d. BTr
24. All of the following are national government agencies except:
a. PUP
b. COA
c. BIR
d. GSIS
25. What is the legal basis of the COA for the performance of its function?
a. PD 1445
b. NGAS
c. IPSAS
d. 1987 Constitution
26. A national government agency purchased office supplies from a VAT-registered company for P851,200. The
agency also paid the P179,200 MERALCO bill and the PLDT bill of P134,400. How much is the net amount of
cash paid to MERALCO?
a. 16,656
b. 168,000 179,200
(11,200) [179,200 / 1.12 * 0.07]
c. 126,000
= 168,000
d. 294,000
27. The following are the selected transactions of a national government agency:
 Signed a contract for the construction of the building, Contract Price-P100 Million
 Advances to contractors were made, P15% of the contract price
 Received the progress billings from the contractor, 30% completion
 Paid the amount due to the contractor. Deductions are as follows:
Recoupment of the advances, 20% of the billings
Retention, 10% of the billings Construction in Progress 30M
Withholding tax Accounts Payable 30M
The entry to record the billings includes a:
a. debit to Construction in Progress-Buildings and Other Structures, P30M
b. debit to Construction in Progress-Buildings and Other Structures, P15M
c. credit to Accounts Payable, P15M
d. credit to Advances to Contractors, P15M
28. Unreasonable and immoderate expenses incurred in violation of ethics and morality by one who does not have
any feeling of guilt for the violation.
a. Extravagant
b. Irregular
c. Unnecessary
d. Unconscionable
29. Department of Public Works and Highways (DPWH) purchased Construction Equipment from a VAT-Registered
supplier on March 10, 2020, and were available for use only on April 05, 2020. The invoice price (exclusive of
VAT) amounted to P2,500,000. The estimated useful life of the asset is 10 years. Depreciation is to be
considered as one month if available for use on or before the 15th of the month; however, if it is available for use
after the 15th of the month, depreciation is for the succeeding month. Assume that the company estimates a 5%
salvage value for the construction equipment. How much is the book value of the equipment on December 31,
2021?
a. 2,334,500 2,800,000 [2,500,000 * 1.12]
b. 2,084,375 (199,500) [(2,800,000 * 0.95) / 10 * 9/12]
c. 2,312,333 (266,000) [(2,800,000 * 0.95) / 10]
d. 2,064,583
= 2,334,500
30. A government agency ordered office equipment for P200,000 through the procurement services of DBM on April
15, 2020. The equipment was delivered to the government agency on May 15, 2020. The asset has a useful life
of 5 years. The entry to record the delivery of the equipment is:
a. Dr. Office Equipment, Cr. Accounts Payable
b. Dr. Office Equipment, Cr. Due from NGAs
c. Dr. Office Equipment, Cr. Cash-MDS, Regular
d. Dr. Due from NGAS, Cr. Cash-MDS, Regular
31. The credit entry to record the tax remittance thru the Tax Remittance Advice (TRA) is:
a. Cash in Bank-Local Currency, Current Account
b. Cash-Modified Disbursement System (MDS), Regular
c. Cash-Tax Remittance Advice
d. Due to BIR
32. Tangible items with a service life of more than one year and not within the capitalization threshold of P15,000.
a. Semi-expendable property and equipment
b. Inventories
c. Property and Equipment
d. Investment
33. Statement I: Excessive expenditures are those incurred without restraint, judiciousness, economy& exceed the
bounds of propriety. These expenditures are immoderate, prodigal, lavish, luxurious & injudicious.
Statement II: Extravagant expenditures are those incurred at an immoderate quantity or exorbitant price. These
also include expenses that exceed what is usual or proper as well as expenses that are beyond just measure or
amount.
a. Both statements are TRUE.
b. Both statements are FALSE.
c. Only statement 1 is TRUE.
d. Only statement 2 is TRUE.
34. The following are the selected transactions of a national government agency for the month of March 2020:

Total Allotment for MOOE 10,000,000


Total NCA for MOOE 7,500,000
Total Obligation for MOOE 8,000,000
Total Obligations liquidated (disbursement) for MOOE 7,000,000

What is the total amount of unliquidated obligation for MOOE?

a. 2,500,000
b. 1,500,000 8,000,000 - 7,000,000
c. 2,000,000
d. 1,000,000
35. The following are the selected transactions of a national government agency:
 Signed a contract for the construction of the building, Contract Price-P100 Million.
 Advances to contractors were made, P15% of the contract price.
 Received the progress billings from the contractor, 30% completion.
 Paid the amount due to the contractor. Deductions are as follows:
Recoupment of the advances, 20% of the billings
Retention, 10% of the billings
Withholding tax
The entry to record the advances includes a:
a. debit to Due from Contractors, P4,500,000 Advances to Contractors 15M
b. debit to Advances to Contractors, P15,000,000
Cash - MDS, Regular 15M
c. debit to Due from Contractors, P30,000,000
d. credit to Cash-MDS), Regular, P14,062,500
36. Which of the following describes the best example of extravagant expenditures?
a. Payment of allowances & other forms of additional compensation without proper authority
b. Overpricing of purchases characterized by grossly exaggerated or inflated quotations, in excess of the
prevailing market price
c. Luxurious furnishings for government buildings
d. Grant of overtime pay for work that is not urgent in nature
37. Which of the following sector got the biggest slice of the 2021 budget?
a. Economic Services
b. Defense
c. General Public Services
d. Social Services
38. The authority issued by the DBM to agencies to cover the liquidation of their actual obligations incurred against
available allotments for availing of proceeds from loans/grants through supplier’s credit/constructive cash.
a. NCA
b. NTA
c. CDC
d. NCAA
39. A government agency ordered office equipment for P200,000 through the procurement services of DBM on April
14, 2020. The equipment was delivered to the government agency on May 25, 2020. The asset has a useful life
of 5 years. The depreciation expense on December 31, 2020, is:
a. 22,167
b. 25,333
[(200,000 * 0.95) / 5] * 7/12
c. 23,333
d. 28,500
40. A government agency had the following items for disbursements:
 Electricity Expenses 500,000 Due to BIR 76,350
 Rent/Lease Expenses 246,400 Cash - TRA 76,350
 Telephone Expenses 120,000
 Office Supplies Inventory 67,200
 Office Equipment 224,000
Assuming that the government agency is a state university, the entry to remit the tax includes a:
a. debit to Subsidy from National Government, P69,750
b. debit to Due to BIR, P69,750
c. credit to Cash-TRA, P76,350
d. credit to Cash-Modified Disbursement System, Regular, P76,350
ELECTRICITY: (500,000 / 1.12) * 0.07 = 31,250 OFFICE EQT: (224,000 / 1.12) * 0.06 =
RENT: (246,400 / 1.12) * 0.10 = 22,000 12,000
TELEPHONE: (120,000 / 1.12) * 0.07 = 7,500
OFFICE SUPPLIES: (67,200 / 1.12) * 0.06 = 3,600 31,250 + 22,000 + 7,500 + 3,600 + 12,000
41. Under the current government accounting system, an obligation for the purchase of equipment is recorded in
the:
a. RAOD-PS
b. RAOD-FE
c. RAOD-CO
d. RAOD-MOOE
42. The following are the selected transactions of a national government agency:
 Signed a contract for the construction of the building, Contract Price-P100 Million.
 Advances to contractors were made, 15% of the contract price.
 Received the progress billings from the contractor, 30% completion.
 Paid the amount due to the contractor. Deductions are as follows:
Recoupment of the advances, based on % of completion
Retention, 10% of the billings
Withholding tax 30,000,000
The net amount paid to the contractor in the transaction (d) was: (4,500,000) [100,000,000 * 0.15 * 0.30]
a. 10,125,000 (3,000,000) [30,000,000 * 0.10]
b. 20,625,000
(1,875,000) [30,000,000 / 1.12 * 0.07]
= 20,625,000
c. 13,125,000
d. 19,125,000
43. The debit entry to close the unused NCA on the books of a national government agency is
a. Subsidy from National Government
b. Cash-MDS, Regular Subsidy from National Government xx
c. Due to National Treasury Cash - MDS, Regular xx
d. Cash-Collecting Officers
44. The following cash account titles are included in the trial balance of a national government agency, except
a. Petty Cash
b. Cash-Local Treasury
c. Cash-Collecting Officer
d. Cash-MDS, Regular
45. Statement I: Government Accounting Manual contains the accounting policies in accordance with the PPSAS as
well as the guidelines and procedures to be adopted by the accountants, budget officers, cashiers, property
officers, accountable officers, and other finance personnel in recording and reporting government financial
transactions.
Statement II: Cash in Bank-Local Currency Current Account is debited to recognize deposits with AGDBs of
income received for which the agency has authority to use.
a. Both statements are TRUE.
b. Only Statement I is TRUE.
c. Only Statement II is TRUE.
d. Both statements are FALSE.
46. Authority issued by the Central Office of a government agency to its regional and operating units to cover the
latter’s cash requirements.
a. NCA
b. NTA
c. NCAA
d. CDC
47. The following account balances were taken from the books of a government agency: Salaries & Wages –
Regular, P7,950,000; PERA, P300,000; Other Supplies & Materials Expense, P412,500; Water Expenses,
P45,000; Electricity Expenses, P75,000; Telephone Expenses, P22,500; Travelling Expenses, P127,500;
Representation Allowance & Transportation Allowance (RATA), P225,000; Representation Expenses, P150,000;
Subsidy from National Government, P10,750,000; Interest Income, P7,500; Interest Expense, P12,000; Bank
Charges, P2,250; Retirement & Life Insurance Premiums, P795,000; PAG-IBIG Contributions, P100,000;
PHILHEALTH Contributions, P79,500; Employees Compensation Insurance Premiums, P50,000. How much is
the total amount of expenses under Maintenance & Other Operating Expenses (MOOE)?
a. 834,750
b. 870,000 412,500 + 45,000 + 75,000 + 22,500 + 127,500 + 150,000
c. 1,134,750
d. 832,500
48. This account is debited to record the amount advanced to officers and employees for official travel.
a. Advances for Operating Expenses
b. Due from Officers and Employees
c. Advances to Officers and Employees
d. Advances to Special Disbursing Officer
49. DFA issued a purchase order (PO) for the acquisition of office equipment costing P150,000. The same was
paid by check after appropriate government tax. The obligation of P150,000 was recorded in the Registry of
Allotment, Obligation, and Disbursement- Capital Outlay (RAOD-CO). How much was the amount of MDS check
issued?
a. 8,036.71
150,000
b. 9,375 (8,036.71) [150,000 / 1.12 * 0.06]
c. 140,625 = 141,963.29
d. 141,963.29
50. Which of the following is used as the basis of a recording in the journals?
a. Journal Entry Voucher
b. Obligation Request
c. Purchase Order
d. Subsidiary Ledgers