Government Accounting Quiz

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Questions and Answers

What is the condition for recognizing individual items of PPE as a group?

Each item of the group has a value below the capitalization threshold.

The total cost of the group meets the capitalization threshold. (correct)

The total cost of the group is below the capitalization threshold.

Each item of the group has a value above the capitalization threshold.

How are trade discounts treated in the initial measurement of items of PPE according to GAM for NGAs?

They are partially included.

They are partially excluded.

They are excluded. (correct)

They are included.

What is the treatment of items below the capitalization threshold of PPE?

They are recognized as Operating Expenditure.

They are recognized as Capital Expenditure.

They are recognized as PPE.

They are recognized as Semi-Expendable Property. (correct)

How are provision for decommissioning and restoration costs of an item of PPE subsequently measured?

At amortized cost. Signup and view all the answers

What are the two models that government entities may choose from to subsequently measure their PPE?

Cost model and revaluation model. Signup and view all the answers

What is the typical residual value assigned to items of PPE by government entities?

10% of cost. Signup and view all the answers

When do government entities recognize depreciation on PPE?

On an annual basis. Signup and view all the answers

When is an item of PPE derecognized?

In all of the above situations. Signup and view all the answers

What is the net amount paid to MERALCO?

P168,448 Signup and view all the answers

What is the invoice price of the construction equipment purchased by DPWH?

P2,500,000 Signup and view all the answers

What is the estimated useful life of the asset purchased by DPWH?

10 years Signup and view all the answers

What is the depreciation expense for 2020?

P237,500 Signup and view all the answers

What is the book value of the equipment on December 31, 2021?

P2,312,333 Signup and view all the answers

What is the amount of cash advance granted to Department Heads?

P500,000 Signup and view all the answers

What is the debit account in the journal entry to recognize liquidation of cash advance?

Traveling Expense – Local, P575,000 Signup and view all the answers

What is the total amount of invoices paid to MERALCO and PLDT?

P600,000 Signup and view all the answers

What is the total amount of payments made to ESJAY CORP. and MANARA MKTG.?

P546,000 Signup and view all the answers

What is the total amount of contributions made to Retirement & Life Insurance, PAG-IBIG, and PHIL-HEALTH?

P3,585,000 Signup and view all the answers

What is the total amount of Employees Compensation Insurance Premiums?

P465,000 Signup and view all the answers

What is the correct entry to record the advances relating to payroll in a national government agency?

Debit to Due from Officers & Employees, P16,755,000 Signup and view all the answers

What is the total amount of payments made to MANILA WATER and TIP TOP CO.?

P1,090,000 Signup and view all the answers

What is the total amount of payments made to MERALCO, PLDT, MANILA WATER, and TIP TOP CO.?

P1,590,000 Signup and view all the answers

What is required for the establishment of a petty cash fund according to GAM for NGAs?

The approval of the Head of the Agency Signup and view all the answers

What is the purpose of a petty cash fund?

To manage small transactions Signup and view all the answers

What happens if the cash on hand and petty cash vouchers (PCV) do not equal the ledger balance of the petty cash fund?

The difference is considered a shortage or overage Signup and view all the answers

What is the system of handling petty cash fund called if the cash on hand and petty cash vouchers must be equal to the ledger balance?

Imprest System Signup and view all the answers

Who is responsible for approving the establishment of a petty cash fund?

The Head of the Agency Signup and view all the answers

What is the purpose of petit cash vouchers (PCV)?

To record small transactions Signup and view all the answers

What happens if there is a shortage in the petty cash fund?

The difference is written off as a loss Signup and view all the answers

Why is a petty cash fund used?

To manage small transactions efficiently Signup and view all the answers

What is the total amount of taxes withheld?

P3,734,839.29 Signup and view all the answers

What is the unused NCA for the month of January?

P7,039,500 Signup and view all the answers

What is the total obligations incurred for Personnel Services?

P27,150,000 Signup and view all the answers

What is the total amount remitted to GSIS?

P5,625,000 Signup and view all the answers

What is the 'Net Financial Assistance/Subsidy' to be reported in the Statement of Financial Performance?

P619,000 Signup and view all the answers

What is the surplus (deficit) for the period?

(P595,000) Signup and view all the answers

What is the total revenue earned from billings and collections of unbilled income?

P290,000 Signup and view all the answers

What is the unused balance of Cash – MDS, Regular at the end of the period?

P43,000 Signup and view all the answers

Study Notes

Government Accounting and Management (GAM) for National Government Agencies (NGAs)

Petty cash fund establishment requires approval of the Head of the Agency, not the President of the Republic of the Philippines.
Petty cash fund handling system involves reconciling cash on hand and petty cash vouchers (PCVs) to the ledger balance to ensure equality, and any difference is either a shortage or overage.

Accounting for Property, Plant, and Equipment (PPE)

Trade discounts are excluded from initial measurement of PPE, but not cash discounts.
Items below the capitalization threshold are not recognized as PPE, but as Semi-Expendable Property – a separate class of PPE.
Provision for decommissioning and restoration costs of PPE is subsequently measured at amortized cost.
Government entities may choose either the cost model or revaluation model to subsequently measure PPE.
Government entities normally assign a residual value of 10% of cost to PPE.
Depreciation on PPE is typically recorded on a monthly basis.

Accounting for Disbursements and Inventory

A government entity derecognizes an item of PPE that is idle, fully depreciated, or unserviceable.
Inventory and Construction and Heavy Equipment acquisitions are recorded at cost, and depreciation is calculated accordingly.

Government Accounting and Management (GAM) for Liquidation of Cash Advances

A cash advance is granted to defray expenses, and a liquidation report is submitted to justify the expenses incurred.
Journal entries for liquidation of cash advance involve crediting Advances to Officers and Employees and debiting relevant expense accounts.

Government Accounting and Management (GAM) for Payroll and NCA

Payment of government share includes Retirement & Life Insurance Contributions, PAG-IBIG Contributions, PHIL-HEALTH Contributions, and Employees Compensation Insurance Premiums.
Receipt of NCA for the month is recorded by debiting Cash – MDS Regular and crediting Subsidy from National Government.
Advances relating to payroll are recorded by debiting Advances to Officers & Employees or Due from Officers & Employees.

Accounting for Taxes Withheld and NCA

Taxes withheld include withholding taxes, and the total amount of taxes withheld is recorded accordingly.
Unused NCA for the month is calculated by subtracting total obligations incurred from total NCA received.
Net Financial Assistance/Subsidy is calculated by adding unused NCA, total revenue, and total taxes withheld, then subtracting total expenses.

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Description

Practice quiz for government accounting students, covering topics related to accountancy and finance.