Accounting for Government & Non-Profit Organizations Overview
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Questions and Answers

What does Government Accounting involve?

  • Only recording financial transactions
  • Exclusively summarizing transactions
  • Analyzing, recording, and communicating transactions involving government funds (correct)
  • Only interpreting the results of financial transactions

    • Which of the following is NOT a Basic Government Accounting Principle for National Government Agencies (NGAs)?

  • Reporting financial transactions based on budgetary records
  • Maintaining single entry bookkeeping system (correct)
  • Using accrual basis of accounting
  • Following generally accepted government accounting principles

    • What type of Financial Statements are General-Purpose Financial Statements (GPFSs)?

  • Reports meeting the needs of users with specific demands
  • Reports exclusively designed for government agencies
  • Tailored reports for specific user needs
  • Intended for users not specifically demanding tailored reports (correct)

    • Which principle requires National Government Agencies to use the Revised Chart of Accounts (RCA)?

    <p>Budget basis for presentation of budget information</p> Signup and view all the answers

    In Government Accounting, what method is used for presenting budget information in financial statements?

    <p>Budget basis</p> Signup and view all the answers

    What type of accounting standards are National Government Agencies required to follow?

    <p>Philippine Public Sector Accounting Standards (PPSAS)</p> Signup and view all the answers

    What is the primary purpose of general-purpose financial reporting in the public sector?

    <p>To provide information for decision making and demonstrate accountability</p> Signup and view all the answers

    Who is responsible for the preparation of financial statements for an individual entity or department?

    <p>The head of the entity/department central office and the head of the finance/accounting unit</p> Signup and view all the answers

    Which of the following is NOT a component of the complete set of General-Purpose Financial Statements (GPFSs)?

    <p>Statement of Profit and Loss</p> Signup and view all the answers

    Who is responsible for the preparation of financial statements for the National Government (NG) as a single entity?

    <p>The Chairman of the Commission on Audit (COA)</p> Signup and view all the answers

    Which of the following is a component of the complete set of General-Purpose Financial Statements (GPFSs) according to the text?

    <p>Statement of Comparison of Budget and Actual Amounts</p> Signup and view all the answers

    Who is responsible for the preparation of financial statements for a department or entity as a single entity?

    <p>The head of the entity/department central office and the head of the CO finance unit</p> Signup and view all the answers

    What are the qualitative characteristics of financial reporting?

    <p>Understandability, relevance, reliability, comparability</p> Signup and view all the answers

    Which statement best describes liabilities?

    <p>Liabilities are firm obligations of the entity</p> Signup and view all the answers

    What is net assets/equity?

    <p>The residual interest in the assets after deducting liabilities</p> Signup and view all the answers

    What do revenues refer to as defined in Section 3 of PD 1445?

    <p>All funds derived from the income of government agencies</p> Signup and view all the answers

    What are expenses in the context of accounting?

    <p>Outflows or consumption of assets during the reporting period</p> Signup and view all the answers

    What do expenses relate to?

    <p>Decreases in net assets/equity</p> Signup and view all the answers

    Where should transactions not recorded in the Special Journals be recorded?

    <p>General Journal (GJ)</p> Signup and view all the answers

    In financial reporting, which element is defined as resources controlled by an entity as a result of past events?

    <p>Assets</p> Signup and view all the answers

    Which ledger summarizes all transactions recorded in the General Journal and special journals?

    <p>General Ledger (GL)</p> Signup and view all the answers

    Who maintains the Cash Receipts Journal in an organization?

    <p>Accounting Division/Unit by fund cluster</p> Signup and view all the answers

    Which journal is used to record disbursements made through checks?

    <p>Check Disbursements Journal (CkDJ)</p> Signup and view all the answers

    In which journal should the Report of Collection and Deposit be recorded?

    <p>Cash Receipts Journal (CRJ)</p> Signup and view all the answers

    Study Notes

    Government Accounting Basics

    • Government Accounting involves financial reporting and budgeting for government agencies and entities.

    Financial Statements and Reporting

    • General-Purpose Financial Statements (GPFSs) are financial statements intended to meet the needs of a wide range of users.
    • The primary purpose of general-purpose financial reporting in the public sector is to provide information about the government's financial performance, position, and cash flows.
    • National Government Agencies (NGAs) are required to follow the accounting standards prescribed by the Commission on Audit (COA).
    • The method used for presenting budget information in financial statements is the Budget and Other Financing Sources (BOFS) format.

    Preparation of Financial Statements

    • The head of the entity or department is responsible for the preparation of financial statements for an individual entity or department.
    • The Commission on Audit (COA) is responsible for the preparation of financial statements for the National Government (NG) as a single entity.

    Components of General-Purpose Financial Statements

    • The complete set of General-Purpose Financial Statements (GPFSs) includes:
      • Statement of Financial Position
      • Statement of Financial Performance
      • Statement of Changes in Net Assets or Equity
      • Statement of Cash Flows
      • Notes to the Financial Statements

    Qualitative Characteristics of Financial Reporting

    • The qualitative characteristics of financial reporting include:
      • Relevance
      • Reliability
      • Comparability
      • Consistency
      • Verifiability
      • Timeliness
      • Understandability

    Elements of Financial Statements

    • Liabilities refer to present obligations of the entity to transfer resources.
    • Net assets/equity refers to the residual interest or claim on the entity's assets after deducting its liabilities.
    • Revenues refer to inflows or other enhancements of assets or settlements of liabilities.
    • Expenses refer to outflows or other using up of assets or incurrences of liabilities.

    Journalizing and Posting

    • Transactions not recorded in the Special Journals should be recorded in the General Journal.
    • The General Ledger summarizes all transactions recorded in the General Journal and special journals.
    • The Cash Receipts Journal is maintained by the Cashier.
    • Disbursements made through checks are recorded in the Cash Disbursements Journal.
    • The Report of Collection and Deposit should be recorded in the Cash Receipts Journal.

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    Description

    Learn about the processes involved in analyzing, recording, and summarizing transactions related to government funds and property. Explore the basic principles of government accounting and budget reporting.

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