University of San Carlos
School of Business & Economics
Accountancy Department
AC 518 Examination
1. The following are objectives of government accounting, except:
a. To produce information concerning present operations and past conditions
b. To provide a basis for guidance for future operations
c. To provide for control of the acts of public bodies and officers in the receipt, disposition
and utilization of funds and property
d. To report on the financial position and the results of operations of government agencies
for the information of all persons concerned
2. As to purpose, private enterprises are organized ________ to make profits while the government
is set up _______ to render service at lowest possible cost.
a. Solely; Mainly b. Primarily; Mainly
c. Mainly; Primarily
d. Primarily; Solely
3. Who formulates the national policies?
a. President of the Philippines
c. National Economic Development Authority
b. Congress
d. Department of Budget and Management
4. Which of the following statements is/are true?
I: Effectiveness refers to the relationship between goods or services produced and resources used
to produce them.
II: The function of government accounting is to provide financial information primarily
quantitative in nature about the operations of the government.
a. I only
b. II only
c. Both I and II
d. Neither I nor II
5. It is a budget release document that serves as the obligational authority replacing the Agency
Budget Matrix (ABM) for the comprehensive release of budgetary items appropriated in the GAA,
categorized as “For Comprehensive Release”.
a. General Allotment Release Order
c. Disbursement Authority
b. Special Allotment Release Order
d. General Appropriation Act
6. Which government body determines the accounting and other item of information needed to
monitor budget performance?
a. Commision on Audit
c. Department of Budget and Management
b. Bureau of Treasury
d. Department of Finance
7. Separate fund accounting shall be done only in the following, except
a. when specifically required by law
b. when specifically required by a donor agency
c. when specifically required by the COA
d. when otherwise necessitated by circumstances subject to prior approval of the COA
8. Which of the following is not a GOCC?
a. Duty Free Philippines Corporation
c. Boy Scouts of the Philippines
b. Board of Accountancy
d. Cebu Port Authority
9. It refers to a claim of legitimacy, the justification and right to exercise that power.
a. authority
b. power
c. accountability
d. responsibility
10. When does the government recognize a liability?
a. at the time goods and services are accepted or rendered
b. when supplier/creditor bills are received.
c. A or B
d. A and B
11. Which of the following statements is/are false?
I: Under PD 1445, accounting responsibility for all government funds and property is entrusted,
immediately and primarily, to the head of the government agency or office.
II: The New Government Accounting System took effect on January 1, 2003.
a. I only b. II only
c. Both I and II
d. Neither I nor II
12. Which of the following is not a national government agency?
a. Bangko Sentral ng Pilipinas
c. Cebu Normal University
b. Commission on Audit
d. Bureau of Treasury
13. The following are financial expenses, except
a. bank charges b. interest expenses
c. bond expenses
d. commitment charges
14. Which of the following is not a feature of government accounting?
a. Accounting is done by fund.
c. Preparation of income statement is a must.
b. Budgetary accounts are used.
d. Periodic inventory system.
15. Under the Construction Period Theory, bonus paid to the contractor for completing the work
____ shall be ______ the total cost of the project.
a. on time; added to
c. on time; deducted from
b. ahead of time; added to
d. ahead of time; deducted from
16. Which of the following statements is/are not true?
I: Serviceable assets no longer being used are reclassified to Other Assets.
II: The budgetary accounts in the government are the appropriation, allocation and obligation.
a. I only
b. II only
c. Both I and II
d. Neither I nor II
17. Which is not charged with the government accounting responsibility?
a. Commission on Audit
c. National Government Agencies
b. Department of Budget and Management
d. Legislative Department
18. Which government body exercises technical supervision over the accounting functions of each
agency?
a. Department of Finance
c. Bureau of Treasury
b. Commission on Audit
d. Department of Budget and Management
19. Which of the following statements is/are true?
I:The Bureau of Treasury ensures that government resources are generated and managed
judiciously and in a manner supportive of development activities.
II: Government funds or property shall be spent or used solely for public purpose.
a. I only
b. II only
c. Both I and II
d. Neither I nor II
20. An Allowance for Doubtful Accounts shall be set up for estimated uncollectible trade
receivables to allow for their
a. net realizable valuation
c. fair valuation
b. realizable valuation
d. net fair valuation
21. Collection of P645,000 representing motor vehicles registration fees was recorded by Land
Transportation Office as P654,000. What is the correcting entry?
a. Cash – Collecting Officer
(9,000)
Registration Fees
(9,000)
b. Cash – Collecting Officer
9,000
Registration Fees
9,000
c. Registration Fees
(9,000)
Cash – Collecting Officer
(9,000)
d. Registration Fees
9,000
Cash – Collecting Officer
9,000
22. Which of the following public official can exercise the Doctrine of Augmentation?
a. Presiding Justice of the Sandiganbayan
b. BIR Commissioner
c. COA Chairman
d. Senate majority floor leader
e. none of the above
23. Any public officer who, shall appropriate public funds, or property or shall take or misappropriate
or shall consent or through abandonment or negligence, shall permit any other person to take
such public funds or property, wholly or partially, shall be guilty of malversation of public funds
or property.
a. True
b. False. The act described is illegal use of public funds or property.
c. False. The crime committed is estafa.
d. False. The public officer should be one accountable for public funds or property.
e. False. The public officer should be the head of the government agency or office.
24. Who has control of the expenditure of public funds?
a. The Office of the President through the Department of Budget and Management.
b. The House of Representatives from where all appropriation bills emanate.
c. The Senate through its Committee on Finance.
d. The Congress of the Republic of the Philippines.
e. Both the members of Congress and the President acting jointly, if so provided by the
General Appropriations Act.
25. Mr. Mike Manza sued the government for damages. After trial, the court ruled in his favor and
awarded damages amounting to P50 million against the government. To satisfy the judgment
against the government, which valid option is available to Mr. Manza?
a. Garnish the government funds deposited at the Land Bank of the Philippines (LBP).
b. File a claim with the Commission on Audit (COA).
26.
27.
28.
29.
30.
c. Make representations with the Congress to appropriate the amount to satisfy the
judgment.
d. File a petition for mandamus in court to compel Congress to appropriate P50 million to
satisfy the judgment.
e. Proceed to execute the judgment because the State allowed itself to be sued.
The following are true about fundamental principles for fiscal operations, except
a. All disbursements from public treasury must be made through enactment of a General
Appropriation Law or a special law created for the purpose.
b. Fiscal responsibility shall, to the greatest extent, be shared by all those exercising
authority over the financial affairs, transactions, and operations of the government
agency
c. Government funds or property may be used for private purposes, provided, it has an
incidental benefit on the public.
d. In case of conflict between a Philippine Financial Reporting Standard and a COA
administrative issuance, the latter shall prevail.
Which of the following does not belong to the group?
a. Special Budget
b. Incremental Approach
c. Capital Budgeting
d. Zero-based Budgeting
It refers to the budgetary requirements, of ongoing programs/projects with foreign financial
assistance
a. Priority Program/Project Fund
b. Foreign-Assisted Programs
c. Financially-Assisted Program
d. Agency Baseline
What is the legal basis of the current national budget system?
a. PD 1445 - Government Auditing Code of the Philippines.
b. PD 1177 - Budget Reform Decree of 1977
c. Article IX – C of the 1987 Constitution – Commission on Audit
d. None of the above
There are two major sources of our national budget: 1) revenues and 2) borrowings. In relation
to AC518, which of the following is not included as a source of revenue?
a. Income taxes imposed on income generated by the citizen
b. Import duties collected by Bureau of Customs
c. Value- Added Tax
d. Professional Tax imposed by the City Government
31. Determine the proper order in accordance with the budget cycle
i. Audit
ii. Agency Proposals
iii. Budget Call
iv. Early Bidding for Infrastructures
v. The President’s Budget
vi. Approval of the President of the Bicam version of the GAB
vii. Performance Targets
a. iii, ii, vii, iv, vi, v, i
b. ii, iii, vii, iv, vi, v, i
c. iii, ii, vii, iv, vi, v, i
d. iii, ii, v, vi, iv, vii, i
32. Which of the following does not belong to the group?
a. Special Allotment Release Order
b. General Allotment Release Order
c. GAA as Release Document
d. Notice of Cash Allocation
33. This refers to a document reminding the different agencies in the government to prepare their
respective budgets in accordance with approved overall budget ceilings and parameters
a. Agency Proposals
b. Budget Call
c. Notice of Cash Allocation
d. DBM Resolutions
34. It refers to the financial commitments of agencies pertaining to a budget year. They are
maintained for the purpose of (1) controlling major financial commitments so that funds are not
misappropriated or to prevent juggling of funds, (2) to disclose the funds and have a clear picture
of the expenditures; and (3) to track down a mandatory obligations and insure funding of priority
projects
a. National Budget
b. Key Budgetary Inclusions
c. Long-term Budget
d. Priority Program/Project Fund
35. It is a situation wherein the budget is equal or less than expected revenues.
a. Break Even
b. Anticipated Operational efficiency
c. Balanced budget
d. None of the above
36. It is issued by DBM to the Department of the Foreign Affairs (DFA) and Department of Labor
and Employment (DOLE) to utilize their income collected/retained by the Foreign Service Posts
(FSPs) to cover their operating requirements, but not to exceed the released allotment to the
said post.
a. Notice of Cash Allocation
b. General Allotment Order
c. Special Allotment Order
d. Cash Disbursement Ceiling
37. It provides the guidelines on the releases of funds for FY 2018
a. National Budget Circular 578
b. National Budget Circular 567
c. National Budget Circular 576
d. National Budget Circular 573
38. The following modifications in the allotment are subject to the DBM’s approval, except:
a. Change in the object expenditure (e.g., Salaries and Wages, Travelling Expenses) within
an allotment class
b. From one allotment class to another
c. For the payment of newly-authorized Magna Carta benefits not otherwise appropriated
d. From one operating unit to the other
39. The obligational authority for items of appropriations in the budget enumerated in Schedule I of
the relevant NBC, characterized as For Comprehensive Release (FCR) is
a. GAA as Allotment Order
b. Special Allotment Release Order
c. General Allotment Release Order
d. Notice of Cash Allocation
40. Savings may result to the following except:
a. Non-commencement of program, project or activity
b. Final Discontinuance or abandonment of an ongoing program, activity or project
c. Difference between the approved budget for the contract and the contract award price
including any variations required for the project
d. Lesser cost incurred due to procurement of substandard materials for the
implementation of project, program or activity.
41. Statement I: The agency shall journalize the NCA it receives as debit to Cash-MDS Regular and
credit to Subsidy from the National Government.
Statement II: The Agency shall monitor the allotments and the obligations it incurs in the Regular
Agency books that it shall also maintain
a. Statement I is true; Statement II is False
b. Statement I is false; Statement II is true
c. Both statements are true
d. Both statement are false
42. It is tasked to review and approve the macroeconomic targets, determines the overall
expenditure levels, the revenue projections, the deficit levels and the financing plan.
a. Department of Finance
b. National Economic and Development Authority
c. Development Budget Coordinating Committee
d. Banko Sentral ng Pilipinas
43. The Department of Environment and Natural Resources received a total income collections of
P500,000 which they are authorized to use. The income is broken down as follows:
i.
Certification Fees
100,000
ii.
Permit Fees
275,000
iii.
Inspection fees
50,000
iv.
Processing fees
75,000
What is the journal entry upon receipt of the collections?
a. Cash – MDS, Regular
P500,000
Certification Fees
100,000
Permit Fees
275,000
Inspection fees
50,000
Processing fees
75,000
b. Cash – MDS, Trust
P500,000
Accumulated Surplus (deficits) P500,000
c. Cash – Collecting Officer
Certification Fees
Permit Fees
Inspection fees
Processing fees
P500,000
100,000
275,000
50,000
75,000
d. Cash – Collecting Officer
P500,000
Cash-Treasury/Agency Deposit –Trust P500,000
44. What is the journal entry upon receipt of the NCA from the DBM for the full amount
a. Cash-Collecting Officer
P500,000
Cash-Treasury/Agency Deposit –Trust P500,000
b. Cash-Treasury/Agency Deposit –Trust P500,000
Cash-MDS, Trust
P500,000
c. Cash-MDS, Regular
P500,000
Cash-Treasury/Agency Deposit –Trust P500,000
d. Cash-MDS, Trust
P500,000
Cash-Treasury/Agency Deposit –Trust P500,000
45. Assuming DENR used the income received to purchase computer equipment costing a total of
P100,000. What is the journal entry?
a. Computer Equipment
P100,000
Cash – Collecting Officer
P100,000
b. Computer Equipment
P100,000
Cash – MDS, Trust
P100,000
c. Computer Equipment
P100,000
Cash – MDS, Regular
P100,000
d. Computer Equipment
P100,000
Cash – Treasury/Agency Deposit –Trust P100,000
46. Use the same facts given in number 43. Assume that the receipt of income collection was without
authority to use. What is the journal entry upon receipt of money?
a. Cash – MDS, Regular
P500,000
Certification Fees
100,000
Permit Fees
275,000
Inspection fees
50,000
Processing fees
75,000
b. Cash – MDS, Trust
P500,000
Accumulated Surplus (deficits)
P500,000
c. Cash – Collecting Officer
Certification Fees
Permit Fees
Inspection fees
Processing fees
P500,000
100,000
275,000
50,000
75,000
d. Cash – Collecting Officer
P500,000
Cash-Treasury/Agency Deposit –Trust P500,000
47. A government hospital received income amounting to P250,000, of which, it is authorized to use
but subject to limitation. What is the journal entry upon receipt of the income?
a. Cash – MDS, Regular
P250,000
Accumulated Surplus (Deficits)
P250,000
b. Cash – MDS, Trust
P250,000
Accumulated Surplus (Deficits)
P250,000
c. Cash – Local Currency Current Account P250,000
Hospital fees
P250,000
d. Cash – Collecting Officer
P250,000
Hospital fees
P250,000
48. Using the preceding example, assume that after one week the hospital decided to purchase
supplies worth P20,000. What is the journal entry?
a. Supplies Expense
P20,000
Cash – Collecting Officer
P20,000
b. Supplies Expense
Cash – MDS, Trust
P20,000
P20,000
c. Supplies Expense
P20,000
Cash – Local Currency Current Account
P20,000
d. Supplies Expense
P20,000
Cash – Treasury/Agency Deposit –Trust
P20,000
49. Continuing the presumption of the previous number, what will be the journal entry for the
excess?
a. Accumulated Surplus (Deficit)
P230,000
Cash – Collecting Officer
P230,000
b. Cash- Treasury/Agency Deposit – Trust
P230,000
Cash – Collecting Officer
P230,000
c. Accumulated Surplus (Deficit)
P230,000
Cash – Local Currency Current Account
P230,000
d. No entry
50. In circumstances where the recipient of the of funds cannot implement the project, such agency
(Source Agency) transfers such fund to implementing. What is the journal entry from the
perspective of the implementing agency.
a. Cash-MDS, Regular
XXX
Accounts Payable - SA
XXX
b. Cash-MDS, Regular
XXX
Due to NGAs (SA)
XXX
c. Cash-Collecting Officer
XXX
Due to NGAs (SA)
XXX
d. Cash-Collecting Officer
XXX
Accounts Payable - SA
XXX
Inspirational quote: “Gggggaaaaaaarrrrr. Arrrrhhgggg.” -Chewbacca
University of San Carlos
School of Business & Economics
Accountancy Department
Name:
Class Schedule:
AC518 Exam
Date:
1.
26.
2.
27.
3.
28.
4.
29.
5.
30.
6.
31.
7.
32.
8.
33.
9.
34.
10.
35.
11.
36.
12.
37.
13.
38.
14.
39.
15.
40.
16.
41.
17.
42.
18.
43.
19.
44.
20.
45.
21.
46.
22.
47.
23.
48.
24.
49.
25.
50.