ACCO 30033 Quiz 3: Government Accounting Concepts and Problems

1. The debit journal entry to record the receipt of notice of cash allocation from DBM on the books of
a national government agency is:
a. Cash-Modified Disbursement System (MDS), Regular
b. Subsidy from National Government Cash-MDS, Regular xx
c. Cash in Bank-Local Currency, Current Account Subsidy from National Gov't xx
d. No entry
2. The following are the selected transactions of a national government agency:
  Signed a contract for the construction of the building, Contract Price-P50 Million.
  Advances to contractors were made, P20% of the contract price.
  Received the progress billings from the contractor, 40% completion.
 Paid the amount due to the contractor. Deductions are as follows:
Recoupment of the advances, 20% of the advances
Retention, 10% of the billings
Withholding tax

The net amount paid to the contractor was: (letter d transaction)

20,000,000 [50,000,000 * 40%]
a. 12,750,000 (2,000,000) [50,000,000 * 20% * 20%]
b. 10,875,000 (2,000,000) [20,000,000 * 10%]
c. 14,000,000 (1,250,000) [20,000,000 / 1.12 * 7%]
d. 14,750,000 = 14,750,000
3. Annual authorizations for incurring obligations during a specified budget year,
a. Automatic Appropriations
b. Continuing Appropriations
c. New General Appropriations
d. Supplemental Appropriations
4. The books of accounts of National Government Agencies under the GAM shall consist of the
following, except
a. Regular Agency and National Government Books
b. Subsidiary Ledgers
c. General Journal
d. Check Disbursement Journal
5. DBM paid the following expenditures for the month of February 2020: Electricity Consumption –
P300,000; Water Consumption – P120,000; Telephone – P50,000; Internet Subscription –
P50,000 and Semi-Expendable Communication Equipment – P22,400. What was the total amount
of withheld taxes? 18,750
a. 32,500 ELECTRICITY: 300,000 / 1.12 * 0.07 = 18,750 7,500
WATER: 120,000 / 1.12 * 0.07 = 7,500 3,125
b. 33,700 TELEPHONE: 50,000 / 1.12 * 0.07 = 3,125 3,125
c. 33,900 INTERNET: 50,000 / 1.12 * 0.07 = 3,125 1,200
d. 30,575 SEMI-EXPENDABLE: 22,400 / 1.12 * 0.06 = 1,200 = 33,700
6. A national government agency purchased office supplies from a VAT-registered company for
P280,000. The agency also paid the P168,000 MERALCO bill and the PLDT bill of P56,000. How
much is the net amount paid to MERALCO?
a. 52,500
 b. 157,500 168,000
c. 53,000 (10,500) [168,000 / 1.12 * 0.07]
= 157,500
d. 156,240
7. The following accounts will appear in the statement of financial position of LGUs with respect to its
general fund, except:
a. Special Education Tax Receivable
b. Real Property Tax Receivable
c. Cash in Bank-LCCA
d. Cash Local Treasury
8. This account is used to record the amount granted to the agency’s accountable officers and
employees for special purpose/time-bound undertakings to be liquidated within a specified period.
a. Advances to Officers and Employees
b. Advances for Payroll
c. Advances for Operating Expenses
d. Advances to Special Disbursing Officers
9. Collection from Taxpayers shall be presented in the statement of Cash Flows under
a. Cash Inflows from Investing Activities
b. Cash Inflows from Operating Activities
c. Cash Inflows from Financing Activities
d. Cash Outflows from Operating Activities
10. The following are the selected transactions of a national government agency:
  Signed a contract for the construction of the building, Contract Price-P50 Million.
  Advances to contractors were made, P20% of the contract price.
  Received the progress billings from the contractor, 40% completion.
 Paid the amount due to the contractor. Deductions are as follows:
Recoupment of the advances, 20% of the advances
Retention, 10% of the billings CIP - Bldgs. & Other Structures 20M
Withholding tax Accounts Payable 20M

The entry to record the billings includes a 50,000,000 * 40%

a. debit to Construction in Progress-Buildings and Other Structures, P20M

b. debit to Construction in Progress-Buildings and Other Structures, P10M
c. credit to Accounts Payable, P10M
d. credit to Advances to Contractors, P10M
11. The debit entry to record the cash collections in a local government unit is:
a. Cash-MDS, Regular
Cash Local Treasury xx
b. Cash Local Treasury Real Property Tax xx
Special Education Tax xx
c. Cash-in Vault
d. Cash in Bank-Local Currency, Current Account
12. The entry to record the advances relating to payroll in an LGU includes a
a. debit to Advances to Officers and Employees
b. credit to Cash-MDS, Regular
c. debit to Advances for Payroll Advances for Payroll xx
Cash in Bank - LCCA xx
d. credit to Cash Local Treasury
13. The debit entry to record the receipt of Notice of Funding Check Issued from the DBM, together
with the credit memo from the bank for its share from internal revenue collections on the books of
the local government units Due from NGAs xx
a. Share from Internal Revenue Collections (IRA) Share from Internal Revenue xx
Collections (IRA)
b. Cash in Bank-Local Currency Current Account
c. Due from NGAs Cash in Bank - LCCA xx
Due from NGAs xx
d. Cash Local Treasury
14. A local government agency (LGU) had the following items for disbursements:
 Electricity Expenses 500,000 31,250 + 22,000 + 7,500 + 3,600
 Rent/Lease Expenses 246,400 + 12,000
 Telephone Expenses 120,000
Due to BIR 76,350
 Office Supplies Inventory 67,200
Cash in Bank - LCCA 76,350
 Office Equipment 224,000

The entry to remit the tax includes a

ELECTRICITY: [500,000 / 1.12 * 7%] = 31,250
WATER: [246,400,000 / 1.12 * 7%] = 22,000
a. credit to Cash-Tax Remittance Advice, P76,350 TELEPHONE: [120,000 / 1.12 * 7%] = 7,500
b. debit to Due to BIR, P69,750 OFFICE SUPPLIES: [67,200 / 1.12 * 6%] = 3,600
OFFICE EQT: [224,000 / 1.12 * 6%] = 12,000
c. credit to Cash Local Treasury, P69,750
d. Cash in Bank, Local Currency, Current Account, P76,350
15. A municipality in the province of Cavite had the following transactions for the month of January
2020:
 Recorded the estimated receivables on real property tax, P20M, and special education tax,
P20M.
 Collected receivables on real property tax, P5M, and special education tax, P5M. Garbage
fees collected, P200,000.
 Deposited total collections from real property taxpayers.
 Remitted the share due to province and barangays for real property tax collected.
 Remitted the share due to the province for special education tax collected.

The entry to record the collection from the taxpayers includes a

a. debit to Cash Local Treasury, P40.2M Cash - Local Treasury 10.2M

b. credit to Deferred Real Property Tax, P20M Real Property Tax 5M
c. debit to Cash Local Treasury, P10.2M Special Education Tax 5M
d. credit to Special Education Tax, P5M Garbage Fees 200K
16. The following are the selected transactions of a national government agency:
  Signed a contract for the construction of the building, Contract Price-P50 Million.
  Advances to contractors were made, P20% of the contract price.
  Received the progress billings from the contractor, 40% completion.
 Paid the amount due to the contractor. Deductions are as follows:
Recoupment of the advances, 20% of the advances Retention,
 10% of the billings
Withholding tax
 The entry to record the advances includes a:

a. debit to Due from Contractors, P10M Advances to Contractors 10M

b. debit to Advances to Contractors, P50M Cash-MDS, Regular 10M
c. debit to Due from Contractors, P10M
d. credit to Cash-Modified Disbursement System (MDS), Regular, P10M
17. A taxpayer from a city in Metro Manila had the following information relating to his real property:
FMV of Land, P1,500,000; FMV of Res. House, P2,500,000. The two (2%) real property tax and
one (1%) special education taxes are both based on the assessed value of the real property. The
assessed value is 30% of the fair market value. Garbage fees amounted to P1,200. The entry to
record the collection from the taxpayer includes a:
a. debit to Cash Local Treasury, P37,200
b. debit to Cash in Bank- LCCA, P37,200 Cash Local Treasury 37,200 [24K + 12K + 1.2K]
Real Property Tax 24,000 [(1.5M + 2.5M) * 30% * 2%]
c. credit to Real Property Tax, P24,000 Special Education Tax 12,000 [(1.5M + 2.5M) * 30% * 1%]
Garbage Fees 1,200
d. debit to Cash Local Treasury, P25,200
18. Yellow DDS signed a contract for the construction of a building. The contract price is P22,400,000
(inclusive of VAT) payable in two progress billings. The advance payment to the contractor is 15%
of the total contract price, (deductible from the first billing). The retention fee is 10% of the
progress billing. The entry to record the refund of retention fee upon turnover of the building
includes a
a. debit to Guaranty/Security Deposits Payable, 2,240,000
b. debit to Guaranty/Security Deposits Payable, 1,120,000 22,400,00 * 10%
c. credit to Cash-MDS, Regular, P1,120,000 Guaranty/Security Deposits Payable 2,240,000
d. credit to Cash-MDS, Trust, P2,240,000 Cash-MDS, Regular 2,240,000
19. Authorizations programmed annually or for some other period prescribed by law, by virtue of
outstanding legislation that does not require periodic action by Congress.
a. Automatic Appropriations
b. Continuing Appropriations
c. New General Appropriations
d. Supplemental Appropriations
20. A taxpayer from a city in Metro Manila had the following information relating to his real property:
FMV of Land, P1,500,000; FMV of Res. House, P2,500,000. The two( 2%) real property tax and
one (1%) special education tax are both based on the assessed value of the real property. The
assessed value is 30% of the fair market value. Garbage fees amounted to P1,200. How much is
the amount credited to the account Due to LGUs for real property tax?
a. 37,200
Real Property Tax 24,000 [1.5M + 2.5M * 30% * 2%]
b. 14,400 Due to LGU (35% + 25%) * 60%
c. 24,000 Amount credited to Due to LGU = 14,400
d. 21,600
21. A national government agency purchased office equipment on March 10, 2020, and was available
for use only on April 5, 2020. The invoice price amounted to P500,000. The estimated life of the
asset is 5 years. Determine the book value of the equipment on December 31, 2021.
a. 325,833 500,000
b. 333,750 (71,250) [(500,000 * 0.95) / 5 *9/12]
c. 335,000 (95,000)
= 333,750
 d. 428,750
22. A national government agency purchased office supplies from a VAT-registered company for
P280,000. The agency also paid the P168,000 MERALCO bill and the PLDT bill of P56,000. How
much is the total amount remitted to the BIR thru the tax remittance advice (TRA) for VAT (BIR
Form 1600)?
a. 9,000 OFFICE SUPPLIES: [280,000 / 1.12 * 0.01] = 2,500
ELECTRICITY: [168,000 / 1.12 * 0.02] = 3,000
b. 29,000 TELEPHONE: [56,000 / 1.12 * 0.02] = 1,000
c. 6,500
d. 22,500 2,500 + 3,000 + 1,000
23. It 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.
a. NGAS
b. GAM
c. IFRS
d. IPSAS
24. A national government agency purchased office equipment on March 10, 2020, and was available
for use only on April 5, 2020. The invoice price amounted to P500,000. The estimated life of the
asset is 5 years. Determine the depreciation expense for 2020.
a. 95,000
b. 90,000
[(500,000 * 0.95) / 5 * 9/12]
c. 79,167
d. 71,250
25. Agency Yellow DDS signed a contract for the construction of the building, P22,400,000 (inclusive
of VAT) payable in two progress billings. Advance payment to the contractor is 15% of the total
contract price (deductible from the first billing) while the retention fee is 10% of the progress
billing. How much is the net amount paid by Agency Yellow DDS for the first billing?
a. 6,720,000 11,200,000 [22,400,000 / 2]
(3,360,000) [22,400,000 * 0.15]
b. 6,020,000 (1,120,000) [11,200,000 * 0.10]
c. 7,700,000 (700,000) [11,200,000 / 1.12 * 0.07]
= 6,020,000
d. 7,140,000
26. The LGUs maintains the following general types of fund, except
a. Special Education Fund
b. Fiduciary Fund
c. General Fund
d. Trust Fund
27. An air-conditioning unit for P12,500 was purchased by a national government agency. It was
immediately issued to the end-user of the equipment. The entry to record the issuance of the air-
conditioning unit to the end-user will include a:
a. debit to Semi-Expendable Machinery, 12,500
b. debit to Semi-Expendable Machinery and Equipment Expenses, 12,500
c. debit to Office Equipment, 12,500 Semi-Expendable Machinery & Equipment Expenses 12.5K
d. debit to Office Supplies Inventory, 12,500 Semi-Expendable Machinery & Equipment 12.5K
28. A comprehensive authority issued to all national government agencies, in general, to incur
obligations not exceeding an authorized amount during a specific period for the purpose indicated
therein.
a. GAA
b. GARO
c. SARO
d. NCA
29. A municipality in the province of Cavite had the following transactions for the month of January
2020:
 Recorded the estimated receivables on real property tax, P20M, and special education tax,
P20M.
 Collected receivables on real property tax, P5M, and special education tax, P5M. Garbage
fees collected, P200,000.
 Deposited total collections from real property taxpayers.
 Remitted the share due to province and barangays for real property tax collected.
 Remitted the share due to the province for special education tax collected.

The entry to record the remittance of real property tax to the province includes a:

a. debit to Due to LGUs, 3,000,000 Due to LGUs 1,750,000

b. debit to Due to LGUs, 12,000,000 Cash in Bank - LCCA 1,750,000
c. debit to Due to LGUs, 1,750,000
5,000,000 * 0.35
d. Cash in Bank-LCCA, 4,250,000
30. Which of the following accounts is not classified as a business income?
a. School Fees
b. Permit Fees
c. Rent/Lease Income
d. Hospital Fees
31. Additional appropriation authorized by law to augment the original appropriations that proved to be
inadequate or insufficient for the particular purpose intended due to economic, political, or social
conditions.
a. Continuing Appropriations
b. Automatic Appropriations
c. Supplemental Appropriations
d. General Appropriations
32. This account is debited to recognize deposit with AGDBs of income received for which the agency
has authority to use; trust receipts authorized under specific contracts and agreements; Revolving
Fund under specific laws; and credit advice/memos received from the AGDBs.
a. Petty Cash
b. Cash in Bank-LCCA
c. Cash-Collecting Officers
d. Cash-MDS, Regular
33. A municipality in the province of Cavite had the following transactions for the month of January
2020:
 Recorded the estimated receivables on real property tax, P20M, and special education tax,
 P20M.
 Collected receivables on real property tax, P5M, and special education tax, P5M. Garbage
 fees collected, P200,000.
  Deposited total collections from real property taxpayers.
  Remitted the share due to province and barangays for real property tax collected.
 Remitted the share due to the province for special education tax collected.

Determine the consolidated income of the municipality related to the transactions during the
month of January 2020.

a. 18.2M
b. 4.7M Real Property Tax 8,000,000 [20,000,000 * 40%]
c. 4.2M Special Education Tax 10,000,000 [20,000,000 * 50%]
Garbage Fees 200,000
d. 8.2M
34. Which of the following statements relating to local government units is true?
Statement 1: The local sanggunian approves the annual budget thru the issuance of an
appropriation ordinance.
Statement 2: Allotment is the authorization issued by the local chief executive to a
department/office of the local government unit, which allows it to incur obligations, for specified
amounts, within the appropriation ordinance.
a. Statement 1 only
b. Statement 2 only
c. Both statements 1 and 2
d. None of the statements
35. The following cash account titles are included in the Trial Balance of an LGU, except
a. Petty Cash
b. Cash-Collecting Officer
c. Cash Local Treasury
d. Cash in Bank-Local Currency, Current Account