Government Accounting Quiz 3 PDF

lOMoARcPSD|35392413 Government accounting Accountancy (Botswana Accountancy College) Scan to open on Studocu Studocu is not sponsored or endorsed by any college or university Downloaded by diy SY (jairosyjuco29@gmail....

lOMoARcPSD|35392413 Government accounting Accountancy (Botswana Accountancy College) Scan to open on Studocu Studocu is not sponsored or endorsed by any college or university Downloaded by diy SY ([email protected])  lOMoARcPSD|35392413 POLYTECHNIC UNIVERSITY OF THE PHILIPPINES Sta. Maria, Bulacan Campus ACCO 30033: Accounting for Government and Non-Profit Organizations Quiz 3: G.A.M. for Disbursements, Inventory & PPE Name: _____________________________ Section: __________ Date: _________ Score: ___________ General Instructions: Read the following questions very carefully and write your final answer before the number. Cheating and any form of communication with your classmates should not be tolerated. STRICTLY NO ERASURES ALLOWED. Final answer in pencil is also not acceptable. (NO ACRONYM PLEASE!!) TEST 1 – MULTIPLE CHOICE THEORIES 1. According to GAM for NGAs, the establishment of petty cash fund a. Requires the approval of the Head of the Agency. b. Requires the approval of the Chief Accountant. c. Requires the approval of the President of the Republic of the Philippines d. Does not require any formal approval because petty cash funds are likely to be immaterial. 2. Entity A maintains a petty cash fund. At any given point of time, the cash on hand and the petty cash vouchers (PCV) must be equal to the ledger balance of the petty cash fund. If these are not equal, the difference is either shortage or overage. This system of handling petty cash fund is called a. Impress System c. Petty Cash System b. Fluctuating Balance System d. Imprest System 3. The “per transaction” threshold for petty cash disbursements of a government entity is a. P 5,000.00 b. P 10,000.00 c. P 15,000.00 d. No limit 4. According to GAM for NGAs, inventories are assets, except a. Held for sale or distribution in the ordinary course of business. b. Held for use in the production or supply of goods and services. c. In the process of production for sale. d. In the form of materials or supplies to be consumed in the production process or in the rendering of services. 5. Entity B, a government entity, purchases furniture and fixtures amounting to P14,000. The entity would most likely record the purchase as a. Property, Plant and Equipment c. Inventory Held for Sale b. Inventory Held for Consumption d. Semi-Expendable Property 6. Statement 1: The GAM for NGAs allows government agencies/entities to use a periodic inventory system. Statement 2: FIFO method is not available for use by government agencies. a. Only Statement 1 is TRUE c. Both statements are TRUE b. Only Statement 2 is TRUE d. Both statements are FALSE 7. Entity C, a government entity, purchases relief goods which are to be held on standby, ready to be distributed when a calamity strikes. Entity A would most likely classify goods purchased as a. Inventory Held for Consumption c. Purchases b. Inventory Held for Distribution d. Note disclosure will be made 8. According to GAM for NGAs, this shall be used for large numbers of items for inventory that are ordinarily interchangeable. a. Specific Identification b. FIFO c. Weighted average cost applied in a periodic inventory system d. Weighted average cost applied in a perpetual inventory system 9. Which of the following inventories of a government entity would be subsequently measured at the lower of cost and current replacement cost? a. Inventories of rice that are held for sale b. Medicines being sold by a government-owned pharmacy c. Books to be distributed to students in public schools d. Forest products held for sale Page 1 of 6 Downloaded by diy SY ([email protected])  lOMoARcPSD|35392413 10. Which of the following events or transactions would not lead to the recognition of the cost of inventory as expense? a. The inventory is written down. b. The inventory is distributed. c. The inventory is consumed. d. The inventory is exchanged. e. None of the above 11. Accountable forms such as pre-printed forms used in government transactions are most likely to be classified by a government entity as a. Inventory Held for Consumption b. Inventory Held for Distribution c. Semi-Expendable Property d. Not considered inventory 12. Which of the following does not result to the recognition of PPE? a. A single purchase of equipment costing P15,000. b. Purchases of equipment that work together as a group, individually costing P1,000 to P5,000 but with a sum total cost of more than P15,000. c. Bulk acquisitions of small items of PPE with aggregate cost of more than P15,000. d. Acquisition of a building for P10,000,000 intended to be leased out under various operating leases on commercial basis. 13. Statement 1: The capitalization threshold for items of PPE by government entities is P15,000, which is equal to the petty cash disbursement limit. Statement 2: Individual items of PPE with values below the capitalization threshold but work together as a group are recognized as PPE if the total cost of the group meets the capitalization threshold. a. Only Statement 1 is TRUE c. Both statements are TRUE b. Only Statement 2 is TRUE d. Both statements are FALSE 14. Statement 1: According to GAM for NGAs, trade discounts are excluded from the initial measurement of items of PPE but not cash discounts. Statement 2: Item below the capitalization threshold of PPE are recognized as Semi-Expendable Property – a separate class of PPE. a. Only Statement 1 is TRUE c. Both statements are TRUE b. Only Statement 2 is TRUE d. Both statements are FALSE 15. Statement 1: The provision for decommissioning and restoration costs of an item of PPE is subsequently measured at amortized cost. Statement 2: According to GAM for NGAs, government entities may choose either the cost model or revaluation mode to subsequently measure their PPE. a. Only Statement 1 is TRUE c. Both statements are TRUE b. Only Statement 2 is TRUE d. Both statements are FALSE 16. Statement 1: Government entities normally assign items of PPE a residual value of 10% of cost. Statement 2: Government entities recognize/record depreciation on a monthly basis. a. Only Statement 1 is TRUE c. Both statements are TRUE b. Only Statement 2 is TRUE d. Both statements are FALSE 17. A government entity derecognizes an item of PPE that is a. Idle b. Fully Depreciated c. Unserviceable d. All of these 18. Department of Education acquires 5 motor vehicles for a package price of P10,000,000. In conjunction with the purchase, the supplier provides a promotional item of 1 motor vehicle which is not of the same type as those acquired. The fair value of the motor vehicles is P2,000,000. Which of the following statements is correct? a. For individual costing purposes, the cost of each of the 5 motor vehicles acquired is P1,600,000 b. For individual costing purposes, the cost of each motor vehicle acquired is P2,000,000 c. For individual costing purposes, the cost of each motor vehicle acquired is P1,666,667 d. The promotional item is recognized as gain equal to fair value. Page 2 of 6 Downloaded by diy SY ([email protected])  lOMoARcPSD|35392413 19. According to GAM for NGAs, cash discounts not taken on purchases of items of PPE are a. Included in the cost of PPE c. Ignored b. Recognized as “Other Losses” d. Debited to the “Purchases Discount Lost” Account 20. According to GAM for NGAs, estimates of decommissioning and restoration costs of an item of PPE are (choose the incorrect statement). a. Included in the initial cost of the item of PPE at the present value of the estimates. b. Credited to “Other Provisions” account at their present value. c. Included in the initial cost of an item of PPE but not subject to subsequent depreciation, although subject to amortization using the effective interest method. d. Are recognized as “Other Provisions”, at present value, and subsequently measured similar to a financial liability. TEST 2 – GAM for NGAs TRANSACTION (2 points) PUP JPIA Manila purchased office supplies from a VAT-registered company for P851,200. The agency also paid P179,200 for MERALCO bill and PLDT bill of P134,400. 21. How much is the total amount remittance to the BIR through Tax Remittance Advice for EWT (BIR Form 1601-E)? a. P58,240 b. P65,200 c. P13,200 d. P52,000 22. How much is the net amount paid to MERALCO? a. P168,448 b. P168,000 c. P126,000 d. P166,656 Department of Public Works and Highways (DPWH) purchased Construction and Heavy Equipment from a supplier on March 10, 2020 and was 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. 23. How much is the depreciation expense for 2020? a. P237,500 b. P197,917 c. P178,125 d. P199,500 24. How much is the book value of the equipment on December 31, 2021? a. P2,334,500 b. P2,084,375 c. P2,312,333 d. P2,064,583 On November 14, 2019, Department of Finance granted cash advance worth P500,000 to defray expenses relative to the official travel of Department Heads to attend a convention in Davao City. On November 25, 2019, they submitted liquidation report and supporting documents worth P575,000. The amount is reviewed and validated by the Chief Accountant. 25. The journal entry to recognize liquidation of cash advance includes a credit to: a. Advances to Officers and Employees – P500,000 b. Due to Officers and Employees – P75,000 c. Advances to Officers and Employees – P575,000 d. Advances to Special Disbursing Officer – P500,000 e. Both A and B 26. Assuming they submitted liquidation report on January 05, 2020, the journal entry to recognize liquidation of cash advance includes a debit to: a. Traveling Expense – Local, P575,000 b. Traveling Expense – Local, P500,000 c. Accumulated Surplus/Deficit, P575,000 d. Accumulated Surplus/Deficit, P500,000 Department of National Defense (DND) ordered a defense equipment for P300,000 through procurement services of DBM on June 15, 2020. The equipment was available & delivered by the DBM to the government agency on July 15, 2020. The asset has an estimated useful life of 5 years. 27. The entry to recognize order/request of equipment is a. Credit Accounts Payable, P300,000 c. Credit Cash - MDS Regular, P300,000 b. Credit Due from NGAs, P300,000 d. No entry 28. The entry to record the delivery of equipment is a. Dr. Due from National Government Agencies (NGAs); Cr. Cash – MDS, Regular b. Dr. Military, Police and Security Equipment; Cr. Due from National Government Agencies (NGAs) c. Dr. Military, Police and Security Equipment; Cr. Cash – MDS, Regular d. Dr. Military, Police and Security Equipment; Cr. Accounts Payable 29. The amount of total tax withheld by DND as Due to BIR? a. P-0- b. P18,000 c. P21,000 d. P16,071.43 Page 3 of 6 Downloaded by diy SY ([email protected])  lOMoARcPSD|35392413 A national government agency had the following items for disbursements: Electricity Expenses P500,000 Rental of Real Property 280,000 Telephone Expenses 120,000 Office Supplies Inventory 67,200 Office Equipment 224,000 30. The net amount paid to rental was: a. P255,000 b. P262,500 c. P265,000 d. P252,000 31. The total amount remitted to the BIR through Tax Remittance Advice was: a. P53,178.57 b. P58,700 c. P71,850 d. P79,350 The following are the selected transactions of a national government agency: A. Signed a contract for the construction of the building, Contract Price – P100,000,000. B. Advances to Contractors were made, 15% of the contract price. C. Received the progress billings from the contractor, 30% completion D. Paid the amount due to the contractor. Deductions are as follows:  Recoupment of Advances, 20% of the billings  Retention, 10% of the billings  Withholding Tax 32. How much is credited to "Due to BIR"? a. P 937,500 b. P 1,875,000 c. P1,500,000 d. P1,285,714.29 33. How much is the net amount paid to the contractor? a. P19,500,000 b. P20,062,500 c. P19,125,000 d. P22,125,000 34. How much is the balance of Construction in Progress – Buildings & Other Structures account? a. P30,000,000 b. P21,000,000 c. P24,000,000 d. P27,000,000 The following are the transactions of a national government agency for the month of January 2020: A. Receipt of NCA to cover the operating requirements for the month of January 2020, P30,000,000. B. Payment to officers & employees for: Salaries & Wages – Regular P18,000,000 PERA 5,100,000 Deductions: Withholding Tax on Compensation 3,600,000 GSIS Contributions 2,160,000 PAG-IBIG Contributions 360,000 PHILHEALTH 225,000 6,345,000 Net Amount P16,755,000 C. Payment to the following suppliers & utility companies: Invoice Amount Invoice Amount MERALCO P450,000 MANILA WATER P300,000 PLDT 150,000 MANARA MKTG. - Office Supplies 210,000 TIP TOP CO. – Office Equip. 840,000 ESJAY CORP. – Furniture 336,000 D. Remittance of salary deductions except withholding taxes for the month of January. E. Payment of government share: Retirement & Life Insurance Contributions P3,000,000 PAG-IBIG Contributions 360,000 PHIL-HEALTH Contributions 225,000 Employees Compensation Insurance Premiums 465,000 35. The entry to record the receipt of NCA for the month includes a. Debit to Cash - MDS Regular, P30,000,000 b. Credit to Subsidy from National Government, P20,000,000 Page 4 of 6 Downloaded by diy SY ([email protected])  lOMoARcPSD|35392413 c. Debit to Cash in Bank - LCCA, P30,000,000 d. Credit to Cash – Treasury/Agency Deposit, P30,000,000 e. Both A & B 36. The entry to record the advances relating with payroll in a national government agency includes a. Debit to Due from Officers & Employees, P16,755,000. b. Debit to Advances for Payroll, P16,755,000. c. Debit to Advances to Officers & Employees, P23,100,000. d. Credit to Cash in Bank, Local Currency Current Account, P16,755,000. 37. How much is the total amount of taxes withheld? a. P3,734,839.29 b. P3,722,464.29 c. P3,742,875 d. P3,730,500 38. How much is the unused NCA for the month of January? a. P7,039,500 b. P4,294,500 c. P6,909,000 d. P6,450,000 39. How much is the total obligations incurred for Personnel Services? a. P27,150,000 b. P16,755,000 c. P29,895,000 d. P20,805,000 40. The total amount remitted to GSIS was a. P5,625,000 b. P5,160,000 c. P2,160,000 d. P4,050,000 41. A national government agency received Notice of Cash Allocation (NCA) amounting to P625,000 for the year. Unused NCA at the end of the period amounted to P6,000. A national government agency remitted taxes withheld to the BIR amounting to P48,000 through Tax Remittance Advice (TRA). How much is the “Net Financial Assistance/Subsidy” to be reported in the Statement of Financial Performance? a. P-0- b. P667,000 c. P619,000 d. P571,000 42. The following transactions incurred by a National Government Agency during the period of FY 2020:  Received Notice of Cash Allocation (NCA) amounting to P750,000  Earned total revenue of P290,000 from billings and collections of unbilled income.  Incurred total expenses of P885,000.  Remitted total taxes withheld of P140,000 to the BIR through Tax Remittance Advice (TRA).  The Cash – MDS, Regular has an unused balance of P43,000 at the end of the period. How much is the surplus (deficit) for the period? a. (P595,000) b. P155,000 c. P252,000 d. P112,000 43. The trial balances of a national government agency show the following amounts:  Unadjusted Trial Balance – P2,753,000  Adjusted Trial Balance – P2,765,000  Statement of Financial Position (Debit Column) – P1,880,000  Statement of Financial Performance (Credit Column) – P1,137,000 How much is the surplus (deficit) for the period? a. P252,000 b. P885,000 c. (P252,000) d. (P743,000) 44. On April 01, 2020, a national government agency purchased and delivered 20 units of Communication Equipment from a dealer at a price of P280,000 for replacement of old units at the Conference Room of the agency. The equipment was available for use on June 01, 2020. The equipment has a useful life of 5 years. How much is the depreciation expense for the FY 2020? a. P19,950 b. P15,516.67 c. P21,000 d. P-0- The following are the selected transactions of a national government agency for the month of March 2020: Total Allotment for MOOE P10,000,000 Total NCA for MOOE 7,500,000 Total Obligation for MOOE 8,000,000 Total Disbursed for MOOE 7,000,000 45. How much is the unpaid obligation? a. P2,500,000 b. P1,500,000 c. P2,000,000 d. P1,000,000 Page 5 of 6 Downloaded by diy SY ([email protected])  lOMoARcPSD|35392413 46. How much is the unfunded allotment? a. P2,500,000 b. P1,500,000 c. P2,000,000 d. P1,000,000 **END OF QUIZ 3** God Bless!! Page 6 of 6 Downloaded by diy SY ([email protected])