— Chapter 14
Government Accounting - Generai Fund
(New Government Accounting System)
Definition (Section 109 of PD 1445)
Government Accounting encompasses the processes of analyzing, recording, classifying,
summarizing and communicating all transactions involving the receipt, disposition and
utilization of government funds and property and interpreting the results thereof.
As a process, it puts together all activities pertaining to the gathering of data which are to be
used as the bases for management decisions. It Includes:
1.
2.
3.
4.
bookkeeping referred to as analysis, recording and journalizing.
posting or grouping or classifying of similar items
preparation of periodic financial reports
analysis of reports to determine their accuracy and adequacy as well as the efficiency
and effectiveness of agency operations.
Like commercial accounting, government accounting is an art and are based on
fundamental concepts regarding accounting functions and the rules governing accounting
practices. These rules which are derived from experience and reason are flexible and in a
constant process of evolution.
Primary Purpose of Government Business
To render service to the public as distinguished from the usual profit motive of the private
business.
Peculiarities of Government Business
As to Purpose:
The primary purpose of the government business is to render service to the public at the
lowest cost possible as distinguished from the usual profit motive of the private business.
As to Ownership:
There are no defined individual ownership interests in the governmetn business that can be
acquired, sold, transferred or redeemed in the commercial sense. Although every citizen is said
to have a share in the assets of the government, no one may dispose of his share and realize
profit from it.
As to Management:
Managers of private businesses have relatively few internal limitations unlike the officers and
administrators of the government business who are governed by specific laws and regulations.
As to Income:
Private business derives its income from charges made for services rendered or comodities sold
while the government derives most of its income from the collection of taxes and fees.
Basic Objectives of Government Accounting
The basic objectives of government accounting are:
1.
2.
3.
4.
The provide information concerning past operations and present conditions.
To provide as a basis for guidance for future operations.
To provide for control the acts of public bodies and offices regarding the receipt,
disposition, and utilization of government funds and property.
To report on the financial condition and the results of operations of government
agencies for the information of all persons concerned.
Objectives of NGAS
The following are the objectives of the NGAS:
1.
2.
3.
Simplify government accounting;
conform to international accounting standards;
Generate periodic and relevant financial reports for better monitoring of performance.
Subjects of Government Accounting
The subjects of government accounting includes:
1.
2.
3.
//.
National Government - consisting of departments, bureaus, commissions, boards,
state colleges and universities.
Local Government - provinces, chartered cities, municipalities, and barangays.
Government-owned or government controlled corporations - which were created
by law to manage specific type of business.
Basic Features
1.
Accrual Accounting. A modified accrual basis of accounting is used. Under this
method, all expenses shall be recognized when incurred. Income shall be on accrual basis
except for transactions where accrual basis is impractical or when other methods
may be required by law.
2.
One-fund Concept. This system adopts the one-fund concept. Separate fund
accounting shall be done only when specifically erquired by law or by donor agency or
when otherwise necessitated by circumstances subject to prior approval of the
Commission.
Books of Accounts - All national agencies shall maintain two sets of books: Regular Agency
(RA) Books and the National Government (NG) Books.
3.
These shall be used to record the receipt and utilization of Notice of Cash Allocation (NCA)
and other income/receipts which the agencies are authorized to use and to deposit with
Authorized Government Depository Bank (AGDB) and the National Treasury. These shall
consist of journals and ledgers, as follows:
journals
Cash Receipts Journal (CRJ)
Cash Disbursements Journal (CDJ)
Check Disbursements Journal (CkDJ)
General Journal (GJ)
edgers
General Ledger (GL)
Subsidiary Ledgers (SL)
for:
Cash
Receivable
s
Inventories
Investments
Properties, Plant and Equipment
Construction In Progress
Liabilities
Income
Expense
s
National Government (NG) Books. These shall be used to record income which the
agencies are not authorized to use and are required to be remitted to the National
Treasury. These shall consist of:
•
•
•
Cash Journal (CJ)
General Journal (GJ)
General Ledger (GL)
Subsidiary Ledger (SL)
Responsibility Centers. The NGAS provides for responsibility centers. This will enable
the collecting, sumamrizing and reporting of accounting data relating to the
responsibilities of segments/individual units of the agency identified as responsibility
centers.
New Chart of Accounts and Account Codes. A new chart of accounts and coding
structure (as per Gen. Circ. No. 2003-01) with a three-digit account numbering system
shall be adopted. The following is the account code structure:
Accounts
Assets
Asset Contra Account
Liabilities
Equity
Income
Tax Revenue National Taxes
Local Taxes
General Income Permits and Licenses
Service Income
Business Income
Subsidy Income
Other Income
Gain or Loss Accounts
Expenses
Personal Services
Maintenance and Other Operating Exp.
Financial Expenses
Account Code
100-299
300-399
400-499
500-549
550-699
550-579
580-599
600-609
610-629
630-649
650-659
660-679
700-749
750-969
970-999
680-699
700-999
7.
Accounting Reports. The following reports shall be prepared:
Report
*
Trial Balance
*
Balance Sheet
*
Statement of Income and Expenses
*
Cash Flow Statement
Balance Sheet Approach
Income statement Approach
Frequency
. Monthly
Quarterly
Quarterly
Quarterly
8.
Financial Expenses. Financial expenses such as bank charges, interest expense,
commitment fees and other related expenses shall be separately classified from
Maintenance and Other Operating Expenses MOOE)
9.
Allotments and Obligations. The receipt of budgetary allotments from the Department
of Budget and Management (DBM), as well as the incurrence of obligations shall not be
recorded in the regular books of accounts. Instead, they shall be separately
recorded in the Registry of Allotments and Obligations (RAO).
Registries:
RAOCO - Registry of Allotments & Obligations-Capital Outlay
•
RAOMO - Registry of Allotments & Obligations-Maintenance and Other
Operating Expenses
RAOPS - Registry of Allotments & Obligations-Personal Services
•
RAOFE - Registry of Allotments & Obligations-Financial Expenses
10.
Notice of Cash Allocation (NCA). The receipt of NCAs by an agency shall be in
regular books of accounts, thus:
Cash - National Treasury, Modified Disbursement System
Subsidy Income from National Government
xxx
xxx
11.
Construction of Assets. For assets under construction, liability shall be recognized as
bills are received, based on eprcentage of completion and/or contract. The
construction period theory shall be applied for costing purposes.
12.
Depreciation. A feature of the accrual accounting system is the recognition of
depreciation for the depreciable assets of an agency. The straight-line method of
depreciation shall be used. The COA shall issue separate guidelines indicating. Among
others, the depreciable lives and residual or scrap values of various of assets.
In case of leasehold improvement, it shall be depreciated over the period of the lease
or the life of the improvement whichever is shorter.
13.
Registry of Public Infrastructures. For agencies that construct public infrastructures,
such as roads, bridges, plazas, monuments, etc. a separate Registry of Public
Infrastructures (RPI) shall be maintained for each category of infrastructure. Examples:
RPI - Bridges
RPI - Roads
RPI - Parks, Plazas, etc.
During construction, the abobve property shall be recorded in the regular books of
the concerned agency as Construction in Progress. However, upon completion,
they shall be transferred to the appropriate RPI and removed from the agency's
regular books of accounts. As such, they will not be subject to depreciation.
14.
Allowance for Doubtful Accounts. An allowance for doubtful accounts shall be set
up for estimated uncollectible receivables. This will allow for a fair valuation of
receivables prior to write-off.
15.
Recognition of Liability. Liability shall be recognized at the time goods and services
are accepted or rendered and suppler/creditor bills are received in accordance
with International Accounting Standards.
16.
Interest Accrual. Whenever applicable and appropriate, interest income and/or
expense shall be accrued and recognized in the books of accounts.
17.
Contingent Accounts. Contingent assets and/or liabilities are off-book items and
shall be shown only in the notes to financial statements. However, if any amount of
a contingent liability has a reasonable assurance of maturing into an actual liability,
such amount shall be recognized in the books and the appropriate journal entry
shall be made.
18.
Corollary/Negative Journai Entries. Corollary and/or negative journal entries shall
no longer be used in the new accounting system.
Acquisition of inventory, fixed assets and other assets shall be recognized as capital
expenditures in the regular books of accounts, eliminating the need for corollary
journal entires.
Corrections of erroneous journal entries shall not be affected by negative journal
entries but by making the necessary reversing or other adjusting entries, all in the
positive amounts.
III.
The Budget Process (Budgetary Procedures)
One of the distinguishing characteristics of government accounting is the requirement of a
budget which shall be the basis for all expenditures. Budgeting is performed on a basis
consistent with the revenue and appropriation systems. The appropriation system provides
for the control and ultimate disbursement of funds.
The budgetary procedures are as follows:
1.
Budget Preparation and Presentation. It covers estimation of government revenues,
the determination of budgetary priorities and activities within the constraints imposed
by available revenues and borrowing limits, and the translation of approved priorities
and activities into expenditure levels for a budget eyar.
The budget preparation begins with the issuance of a budget call issued by the DBM
in December. This document outlines the specific guidelines on the preparation of
the agency budget estimates to be submitted to the DBM. The DBM, then consolidates
all budgets to form a government-wide budget to be submitted to the President for
final approval before it will be forwarded to the Congress.
2.
Budget Legislation and Authorization. This procedure is a prerogative of the Congress,
which refers to the enactment of the General Appropriations Bill based on the budget of
"receipts and expenditures" into Appropriations Act. Series of budget hearings/ debate
is conducted whereby the various heads of agencies would explain to Congress
the details of their respective budgets. Appropriations are approved by the legislative
body in the form of General Appropriations Act which covers most of the expendituers of
the government. This Act will be forwarded to the President to sign it into law.
3.
Budget Execution or Operation. This covers the various operational aspects of
budgeting, thus making budgeting to serve as one of the principal tools of
management control to insure that public funds are spent only for the specific
purpose for which they are appropriated. This aspect involves also the regulation of
funds release, the scheduling of preferred activities, etc. The responsibility for
monitoring the budget execution rests primarily with the DBM.
4.
Budget Accounting. This aspect focuses on tracking, monitoring, and evaluation of
expenditures and performance. This is simply achieved by comparing performance with
predetermined plans.
Basic Concepts
What is an appropriation?
It refers to an authorization made by tow or other legislative enactment, directing the
payment of goods and services out of government funds under specified
conditions or for special purposes.
What is an Allotment?
Allotment, on the other hand, is the authorization issued by the DBM to the
Agency, which allows it to incur obligations, for specified amounts, within the
legislative appropriation.
In order that the appropriation may be released, the Agency, in consultation with the DBM, is
required to prepare and to submit the Agency Budget Matrix (ABM), the official document used as the
basis in the release of the obligational authority. The ABM is prepared by appropriation source and
major programs and the amounts are classified into "Needing Clearance" and "Not Needing
Clearance". For automatic appropriations, a separate ABM is prepared and submitted.
An Annual Cash Program, which shall provide cash to finance the programs reflected in the ABM and
the prior years' accounts payable, is also submitted with the ABM. Upon approval of the total
comprehensive release, the DBM machine validates the last page of the ABM and releases it to
Agency.
For requests "Not Needing Clearance", the Notice of Cash Allocation (NCA) is issued as requested. For
items "Needing Clearance", the DBM issues the Special Allotment Release Order (SARO), while the
NCA'will be released upon request.
Control and Recording of Appropriations, Allotments, Obligations and NCA
Under the new system, the COA does not journalize the appropriations. The control of the release of
allotments and the NCA shall be made by the DBM and the BTr (Bureau of Treasury), thru the registries that
they shall maintian. The Agency shall also monitor the allolments and the obligations it incurs in the registry
that it shall also maintain.
Records of the Department of Budget and Management (DBM)
RAPAL (Registry of Appropriations and Allotments)
Upon approval and issuance of the ABM and the SARO, the DBM shall enter the pertinent data on
releases for each government agency in the RAPAL. In this registry, there is a new expense
classification, the financial expenses. These ere categorized separately from the MOOE since they
are not operating expenses.
RESPFA (Registry for Special Purpose Funds Appropriation)
The DBM maintains this registn/ to maintain releases from Special Purpose Fund.
RANCA (Registry of Allotments and NCA)
The DBM shall maintain this registry for the allotments and the NCA issued to the Agency. The
RANCA shall be the control and monitoring record of the DBM. The DBM shall furnish the BTr a copy
of the NCA.
Records of the Bureau of Treasury (BTr)
RENREP (Registry of NCA and Replenishments)
Upon receipt of the copy of the NCA from the DBM, the BTr shall enter it in the RENREP. It shall also enter in
the RENR the transfer of cash from its bank account(s) to fhe appropriate MDS accounts.
Record of the Agency
Although the Agency will not journalize its appropriation and allotments, it shall maintain four
registries for the allotments if receives and for the obligations it incurs. These are:
RAOCO
RAOMO
RAOPS
RAOFE
Definition of Terms
1.
Obligations are amounts which are committed to be paid by the government
which arise from acts of a duly authorized administrative officer and which binds the
government to the immediate or eventual payment of a sum of money.
2.
Cash Disbursement Ceiling is a control measure designed to ensure that withdrawals
from the Treasury shall be within the Treasury's capability to honor such withdrawals.
3.
Expected results means services, products, or benefits accruing to the public,
estimated in terms of performance measures or targets.
4.
Rrogram refers to the functions and activities necessary for the performance of a
major purpose for which a government entity is established.
5.
Project means a compound of a program covering a homogeneous group of activities
that ersult in the accomplishment of an identifiable output.
6.
Resources refers to the actual assets of any agency of the government such as
cash, instrument erpresenfing or convertible into money, receivables, land, buildings, as
well as contingent assets such as estimated revenues applying to the current fiscal
period not accrued or collected, and bonds authorized and unissued.
IV.
7.
Internal control is the plan of organization and all the coordinate methods and
measures adopted within an organization or agency to safeguard its assets, check the
accuracy and erliability of its accounting data, and encourage adherence to prescribed
managerial policies.
8.
Balanced budget is applied in the preparation of the national budget, where the
total estimated income must be more than the total estiamted expenditures.
9.
Continuing Appropriation refers to a legislative authorization which extends beyond
one fiscal eyar.
10.
Performance Budget is a plan or program of activities together with costs of
undertaking the to meet goals or targets which emphasixe on expected results.
The National Budget
The national budget is the government estimate of its income and expenditure. It is what the
government plans to spend for its programs and projects, and where the money will come from.
It is based on what the government thinks it will spend during the year and the sources of what it
hopes to have as funds, either from revenues or from borrowing, with which to finance such
expenditure.
The national budget is allocated for the implementation of various programs and projects, the
operation of government offices, payment of salaries of government employees, payment
of public debts.
V.
Accounting for MOOE, FE, CO, Adjsuting Entries and Closing Entries
A.
Maintenance and Other Operating expenses
Asset Method/Perpetual Inventory Method
The new accounting system, the Asset Method will be followed in recording disbursements when
expenditures apply to more than just the accounting period. Examples of these
disbursements are insurance, interest, and rent where the prepaid (asset) accounts shall be
debited. The expense shall be recorded upon utilization/consumption. However, when insurance,
interest, rent, etc., will be fully used up/consumed within the current accounting period, the
disbursement shall be taken up as expense.
Purchases of supplies and materials for stock, regardless of whether or not they are
consumed within the accounting period, shall be recorded as Inventory following the
Perpetual Inventory Method. Like the perpaid expenses, the expense shall be taken up upon
utilization/consumption. However, supplies and materials purchased for immediate use or on
emergency shall be taken up as outright expense-.
In this connection, the petty cash shall not be used to purchase supplies for stock.
As a review, when perpetual inventory method is followed, detailed perpetual inventory records,
in addition to the usual ledger accounts, are maintained for each inventory item, and an
inventory control account is maintained in the general ledger on a current basis. The perpetual
inventory record for each item must provide information for recording receipts, issues and
balances on hand, usually both in units and peso.
B.
Financial Expenses
These are the expenses which are not use in the actual operation of the agency such as
interest expenses, bank charges, etc.
C.
Capital Outlay
Purchases or Construction of Fixed Assets: Construction Period Theory
Fixed assets are charged against capital outlay. Since corollary entry is no longer made, the asset
account is taken up upon purchase. Under the depreciation accounting adopted, depreciation will
be taken up starting on the month succeeding the month of purchase or completion of
construction. Straight-line method will be followed. The rate of depreciation shqll depend on the nature
of the assets, guidelines for this shall be issued by the COA.
In the recording of fixed assets, the Construction Period Theory shall be followed. All
expenses such as interests, license fees, etc., during the construction period shall be
capitalized.
Bonus paid to the contractor for completing the work ahead of schedule shall be added to the
total cost of the project. However, liquidation damages charged to the contractor for delayed
completion should be deducted from the total cost.
This policy is also in accordance with International Accounting Standards Board, which states
'The historical cost of acquiring an asset includes the costs necessarily incurred to bring it to
the condition and location necessary for its intended use."
Assets for use of the general public such as roads, bridges, waterways, railways, etc., shall be
classified as Public Infrastructures. During the construction period, the costs for the
construction shall be taken up as "Construction In Progress" with the appropriate asset
classification. As soon as the project is completed, the "Construction In Progress" is dropped from
the books and the asset is entered in a separate registry, the Registry of Public
Infrastructures (RPI).
D.
Adjusting Entries
Under the NGAS, and in view of the preparation of the Statement of Income and Expenses, there
is a need for a proper matching of revenues and expenses. Under the matching principle,
adjustments should be made for economic activities that have taken place but are not yet
recorded at the time when the financial statements are prepared. Adjustments are:
1.
• 2.
3.
4.
Accrued Items
Deferred Items
Depreciation
Doubtful accounts
Government Accounting '. General Fund (New Government Accounting System)
Types of Receipts and their Accounting Implications
789
WITHOUT AUTHORITY TO USE
As a general rule, all revenues regardless of amount and frequency of collections are to be
remitted to the National Treasury. Such income is to be recorded by the collecting agency in a
separate books of accounts, the National government (NG) books. The collection shall be
credited to the income of the collecting agency, which shall be debited upon
remittance to the National Treasury.
WITH AUTHORITY TO USE
For agencies which are authorized to use income for their operations, the collections shall be
recorded as income in the Regular Agency (RA) books. The authority may be in the form of the
special provision of the GAA, specific authority from the Permanent Committee pursuant
to the requirements of the general provisions of the GAA or a special law.
AUTHORITY WITH LIMITATIONS
If the authority is subject to the limitation that any excess shall be remitted to the National
Treasury, such as collections for seminar and convention fees, the collections shall be
recorded in the RA books. The expenses shall be journalized, the balance/excess to be
remitted to the National Treasury shall be transferred to the NG books.
INCOME FROM SALE OF EQUIPMENT
Proceeds fromt he sale of non-serviceable, obsolete and other unnecessary equipment
including cars, vans and the like may be deemed automatically appropriated for the
purchase of new ones and for the repair or rehabilitation of existing vital equipment, it is
understood that the purchase of cars and vans is subject to the prior authority required
under existing rules.
GRANTS AND DONATIONS INTENDED FOR AGENCY
If there is no specific authority for their use, grants and donations from whatever source
shall be recorded in the NG books and shall be remitted to the National Treasury. The
agency shall prepare a special budget for the use of th e income remitted, upon approval of
the special budget, the DBM shall issue the SDARO and the NCA. The former is the
agency's additional allotment and shall be recorded in the appropriate registry. The latter is
the agency's additional subsidy income from the national government and is journalized in its
RA books.
MISCELLANEOUS COLLECTIONS
1.
Refund of Cash Advance
2.
Cash from another agency to implement its project (Inter-agency transferred
funds)
3.
Cash settlement of disallowances
4.
Settlement of charges
^5.
Dishonored checks
6.
Restitution of cash shortage
7.
Performance bonds
MULTIPLE CHOICE QUESTIONS
1.
Agency AAA received the following allotment for year 2017:
Capital Outlay (CO)
Maintenance and Other Operating Expenses (MOOE)
Personal Services (PS)
Financial Expenses (FE)
P50,000,000
10,000,000
5,000,000
100,000
P65,100,000
The entry to record the above allotment would be:
a.
b.
c.
d.
2.
No entry
Memorandum entry in Registry of Allotments and Obligations
National Clearing Account
65,100,000
Appropriations Alloted
65,100,000
Cash-National Treasury,
Modified Disb. System
65,100,000
Subsidy Income from National
Government
65,100,000
Agency BBB received Notice of Cash Allocation (NCA) - P45,000,000 for the
year 2017; the entry would be:
a.
b.
c.
d.
No entry
Memorandum entry in Registry of Alloti nents
National Clearing Account
45,0C 0,000
Appropriation Alloted
Cash-National Treasury, MDS
45,000.000
Subsidy Income from National
government
45,000,000
45,000,000
3. Agency CCC had obligation for Personnel Services (PS) amounting to
P300.000 for the month of February, the entry would be'.
a. 'No entry
b.
Memorandum entry in Registry of Allotment and Obligations for
PS (RAOPS)
c.
Appropriations Alloted
300,000
Obligations Incurred
300,000
d.
Cash-Disbursing Officer
300,000
Cash-National Treasury (NT), MS
300,000
4. Agency DDD was granted cash advances for payroll amounting to P280,000,
the entry would be:
a.
b.
c.
d.
No entry
Memorandum entry in RAOPS
Payroll Fund
Cash - National Treasury, MDS
Cash - Disbursing Officer
Due from National Government.........
280,000
280,000
280,000
280,000
5. Using the same information in No. 4, Agency DDD paid salaries and other
allowances:
Salaries
PERA (Personnel Economic Relief Allowance)
P300,000
70,000
Total
Less: Salary deductions
Withholding tax
Life and Retirement
Pag-ibig
PhilHealth
P370,000
P60,000
20,000
4,000
6,000
Net Amount
90,000
P280,000
The entry to record the above transaction would be:
a.
Obligations Liquidated
Cash-Disbursing Officer
Due to National Government Agency
Due to GSIS
Due to PhilHealth
370,000
b.
Salaries, etc
Withholding tax payable
Cash - Disbursing Officer
370,000
Salaries and Wages - Regular Pay
PERA
Payroll Fund
Due to BIR
Due to GSIS
Due to Pag-ibig
Due to PhilHealth
300,000
70,000
c.
d.
No entry required.
280,000
60,000
24,000
6,000
60,000
310,000
280,000
60,000
20,000
4,000
6,000
6.
Using the same information in No. 5, the entry to record the remittance of
withholding tax: (with Tax Remittance Advice
a.
b.
c.
d.
7.
60,000
60,000
60,000
60,000
60,000
60,000
60,000
60,000
Using the same information in Nos. 5 and 6, the entry to record the remittance
of Other Salary deductions:
a.
b.
c.
d.
8.
Due to BIR
Cash-National Treasury, MIS
Due to BIR
Cash-Disbursing Officer
Due to BIR
Due to National Government
Due to BIR
Subsidy Income from National Government
Due to Pag-ibig
Due to GSIS
Due to PhilHealth
Cash-National Treasury, MDS
Withholding tax payable
Cash-National Treasury, MDS
Due to National Government Agency
Cash-National Treasury, MDS
No entry required
4,000
20,000
6,000
60,000
30,000
30,000
60,000
30,000
Agency EEE's share in relation to salary deductions were as follows:
Life and retirement
PhilHealth
Pag-ibig
P30,000
20,000
10,000
P60,000
The entry to record the incurrence of agency's share in salary deduction
would be:
a.
b.
c.
d.
GSIS Payable
PhilHealth Payable
Pag-ibig Payable
Cash-National Treasury, MDS
Life and Retirement Contribution
PhilHealth Contribution
Pag-ibig Contribution
Due to NGA
Due to National Government Agency
Cash-National Treasury, MDS
Life and Retirement Contribution Expense.......
PhilHealth Contribution Expense
Pag-ibig Contribution Expense
„
Due to GSIS
Due to PhilHealth
30,000
20,000
10,000
30,000
20,000
10,000
60,000
30,000
20,000
10,000
60,000
60,000
60,000
30,000
20,000
Due to Pag-ibig
9.
10,000
Agency FFF's obligation of rent for three years (3) amounted to P90,000. The
entry to record this transaction would be:
a.
b.
c.
d.
Rent Expenses
Cash-National Treasury, MDS
Prepaid Rent
Cash-National Treasury, MDS
Rent Expense
Prepaid Rent
Memorandum entry in RAOMO
90,000
90,000
90,000
90,000
30,000
30,000
10. Using the same information in No. 9, Agency FFF paid rent for three (3)
years, P90,000. The entry for this transaction would be:
a.
b.
c.
d.
Rent Expense
Cash-National Treasury, MDS
Prepaid Rent'.
Cash-National Treasury, MDS
Rent Expense
Prepaid Rent
Memorandum entry in RAOMO
90,000
90,000
90,000
90,000
30,000
30,000
11. Agency GGG paid Meralco bill amounting to P40,000, the entry to record
this transaction would be:
a.
b.
c.
d.
Electricity Expenses
Cash-National Treasury, MDS
Electricity Expenses
*
Accounts Payable
Memorandum entry only.
No entry required.
40,000
40,000
40,000
40,000
12. Agency HHH received spare parts amounting to P10,000 and set-up liability.
The entry for this transaction would be:
a.
( Spare Parts Expense
Accounts Payable
b.
Spare Parts Inventory
Accounts Payable
c.
Spare Parts Inventory
Due from Suppliers
d.
Memorandum entry only.
10,000
10,000
10,000
10,000
10,000
10,000
13.
Agency III establish a petty cash fund for Maintenance and Other Operating
expenses (MOOE) amounting to P10,000. The entry for this transaction would
be:
a.
b.
c.
d.
14.
No entry
Memorandum etnry
Petty Cash Fund
Cash-National Treasury, MDS
Petty Cash fund
Cash-Disbursing Officers
10,000
10,000
10,000
10,000
Using the information in number 13, Agency III received a request for
replenishment of petty cash fund for the following expenses:
Office Supplies
Transportation fares
Repair of aircon
JRS mail
P500
100
200
_J60
Total
P960
The entry for this transaction would be:
a.
b.
c.
d.
15.
No entry.
Memorandum entry to the RAOMO
Office Supplies Expense
Travelling Expense
Repairs and Maintenance
Other Maintenance and Operating Expense
Cash, National Treasury, MDS
Office Supplies Expense
Travelling Expense
Repairs and Maintenance
Other Maintenance and Operating Expense
Petty Cash Fund
'
Using the same information in number
replenishment of the petty cash fund is:
a.
b.
c.
500
100
200
160
500
100
200
160
960
960
13, the entry to record the
No entry.
Memorandum entry to the RAOMO
Office Supplies Expense
' Travelling Expense
.Repairs and Maintenance
Other Maintenance and Operating Expense
Cash, National Treasury, MDS
d.
Office Supplies Expense
Travelling Expense
Repairs and Maintenance
Other Maintenance and Operating Expense
500
100
200
160
500
100
200
160
960
Petty Cash Fund
960
16. Agency JJ J grants cash advance to Mr. Ube for traveling expense amount
to PI 2,000. The entry for the cash advance would be:
a.
b.
c.
d.
Cash-Disbursing Officer
Cash-National Treasury, MDS
Cash-Collecting Officer
'
Cash-National Treasury, MDS
Travel Expense
Cash-National Treasury, MDS
Advances to Officers & Employees
Cash-National Treasury, MDS
12,000
12,000
12,000
12,000
12,000
12,000
12,000
12,000
17. Using the information in number 14, Mr. Ube presented certificates of
appearance for the travel completed along with the necessary documents
to support the travel expenses, P10,000; Mr. Ube refunded the agency for
the excess. The entry for these transactions would be:
a.
b.
c.
d.
Travelling expenses
Cash Collecting Officer
Advances to officers and Employees
Cash collecting officer
Travelling expenses
Cash, National Treasury, MDS
Travelling expenses
Travelling expenses
Cash, National Treasury, MDS
Due from officers and Employees
10,000
2,000
12,000
2,000
2,000
2,000
2,000
10,000
2,000
12,000
18. Agency KKK have an obligation for equipment per purchase order
amounting to P200,000. The entry for this transaction would be:
a.
b.
.c.
d.
Office Equipment
200,000
Accounts Payable
200,000
Office Equipment
200,000
Cash-National Treasury, MDS
200,000
Office Equipment
200,000
Subsidy Income from National Government
200,000
Memorandum entry in RAOCO.
19. Using the same information in No.
18, Agency, KKK received the office
equipment based on invoice/delivery receipt. The entry for this transaction
would be: (ignore tax implication)
a.
b.
c.
d.
Office Equipment
200,000
Accounts Payable
200,000
Office Equipment
200,000
Cash-National Terasury, MDS
200,000
Office Equipment
200,000
Subsidy Income from National Government
200,000
Memorandum entry in RAOCO.
20. Using the same information in Nos. 18 ana 19, Agency KKK liquidates the
office equipment acquired in full. The entry to recod this transaction would
be (ignore tax implication):
a.
b.
c.
d.
Obligation liquidated
200,000
Cash-Treasury Account-Check Disb
Subsidy Income from National Government. 200,000
Cash-National Treasury, MDS
Accounts Payable
200,000
Cash-National Treasury, MDS
Memorandum entry in RAOCO.
200,000
200,000
200,000
21. Agency LLL have obligation for Information Technology (IT) Software from
Microsoft Great Plains Solutions amounting to PI20,000. The entry for this
transaction would be:
a.
b.
c.
d.
22.
Obligations Incurred
Appropriations Alloted
IT Equipment and Softwares
Accounts Payable
IT Equipment and Software
Cash-National Treasury, MDS
Memorandum entry in RAOCO.
120,000
120,000
120,000
120,000
120,000
120,000
Using the same information in No. 21, Agency LLL received the IT Software
based in invoice/delivery receipt. The enty for this transaction would be
(ignore tax implication):
a.
b.
c.
d.
Memorandum entry in RAOCO
IT Equipment and Software
Cash-National Treasury, MDS
IT Equipment and Software
Accounts Payable
IT Equipment and Software
120,000
120,000
120,000
120,000
120,000
Subsidy Income from Nat'l. Government
23.
Using the same information in Nos. 21 and 22. Agency LLL paid the IT Software
to MS Great Plains in full. The entry to record this transaction would be
(ignore tax implication):
a.
b.
c.
d.
24.
120,000
Obligations Liquidated
Cash-Treasury Account-Check Disb
Accounts Payable
Cash-National Treasury, MDS
Subsidy Income from Nat'l. Government
Cash-National Treasury, MDS
Memorandum entry in RAOCO.
120,000
120,000
120,000
120,000
120,000
120,000
Using the same information inNo. 23, Agency LLL cancelled the check issued
to MS Great Plains within the year of issue. The entry to record this transaction
would be:
a.
b.
c.
d.
Cash-National Treasury, MDS
Obligations Liquidated
Cash-National Treasury, MDS
Subsidy Income from Nat'l. Government
Cash-National Treasury, MDS
Accounts Payable
Memorandum entry in RAOCO.
120,000
120,000
120,000
120,000
120,000
120,000
25. Agency MMM have an obligation for building upon signing of contract
amounting to PI0,000,000. The entry to record this transaction would be:
a.
b.
c.
d.
No entry
Memorandum entry in RAOCO.
Appropriations Alloted
Obligations Incurred
Buildings
:
Accounts Payable
10,000,000
10,000,000
10,000,000
10,000,000
26. Using information in No. 25, Agency MMM received a performance/(cash)
bond from contractor, one (1) percent of the contract price. The entry to
record this transaction would be:
a.
b.
c.
d.
Cash-collecting officer
Performance Bonds Payable
Cash-National Treasury, MDS
Performance Bonds Payable
Accounts Receivable
Performance Bonds Payable
Due from Contractors
Perforamnce Bonds Payable
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
27.
Using the same information in No. 26, Agency MMM deposited the performance
bond to Bureau of Treasury thru AGDB (Authorized Government Depository
Bank). The entry to record this transaction would be:
a.
b.
c.
d.
28.
100,000
100,000
100,000
100,000
100,000
100,9000
100,000
100,000
Using the same information in No. 25, the agency paid the contractor 15%
of contract price (PI,500,000) representing mobilization fee. The entry to
record this transaction would be:
a.
b.
c.
d.
29.
Due from National Government Agency
Cash-Collection Officer
Due from National Government Agency
Cash-National Treasury, MDS
Due from National Government Agency
Accounts Receivable
Cash-Treasury Account
Due from Contractors
Due from National Government Agency...
Cash-National Treasury, MDS
Advances to Contractors
Cash-National Treasury, MDS
Advances to Contractors
Cash-Disbursing Officer
Advances to Contractors
Cash in Bank - Local Company
1,500,000
1,500,000
1,500,000
1,500,000
1,500,000
1,500,000
1,500,000
1,500,000
Using the same information in Nos. 25 and 28 Agency MMM received a
progress billing for the building as follows:
Progress Billing: 70%x PI0,000,000
Less: Recoupment of the advances in No. 28:
70%x PI ,500,000
P7,000,000
Net amount
P5,950,000
1,050,000
The entry to record the above transaction would be:
a.
Construction in Progress - Agency Assets
Bldg
Accounts Payable
b.
Construction in Progress - Agency Assets
' Bldgs
Accounts Payable
Advances to Contractors
c.
Buildings
Accounts Payable
d.
Buildings
5,950,000
7,000,000
5,950,000
7,000,000
5,950,000
5,950,000
1,050,000
5,950,000
Accounts Payable
Advances to Contractors
30.
5,950,000
1,050,000
Using the same information in No. 29, Agency MMM paid the bill for the
construction of the building as follows:
Accounts Payable
Less: 10% Retention (P7,000,000 x 10%)
Withholding tax (P7,000,000 x 10%)
P5,950,000
700,000
700,000
Net amount
P4,550,000
The entry to record this transaction would be:
a.
b.
c.
d.
31.
Accounts Payable
Due to National Government Agency
Cash-National Treasury, MDS
Accounts Payable
Cash-National Treasury, MDS
Accounts Payable
Other Payables ...:
Withholding tax payable
Cash-disbursing officer
Accounts Payable
Guarantee Deposits Payable
Due to BIR
Cash-National Treasury, MDS
Using the same information in Nos. 25, 29'and
final billing for building computed as follows:
5,950,000
1,400,00
4,550,000
4,550,000
4,550,000
5,950,000
700,000
700,000
4,550,000
5,950,000
700,000
700,000
4,550,000
30, Agency MMM paid the
Final Billings: 30% x P10,000,000
Less: Liquidated damages (due to delay
in completion)
P3,000,000
Net Cost
Less: Recoupment of the advances in No. 28
[Pl,500,000-Pl,050,000(No.29)J
P2,990,000
Accounts Payable balance
' Less: Withholding tax (10% x Net Cost
of P2,990,000)
Net amount
10,000
450,000
P2,540,000
299,000
P2,241,000
The entry to record the final payment of billing would be:
a.
b.
c.
d.
32.
2,540,000
299,000
2,241,000
2,540,000
299,000
2,241,000
2,241,000
2,241,000
2,241,000
2,241,000
Using the same information in No. 30, the entry to record the liquidated
damages imposed to the contractor due to delay in the final completion
would be:
a.
b.
c.
d.
33.
Accounts Payable
Withholding tax payable
Cash-disbursing officer
Accounts Payable
Due to BIR
Cash-National Treasury, MDS
Accounts Payable
Cash-National Treasury, MDS
Buildings
Cash-National Treasury, MDS
No entry
Memorandum entry in RAOCO
Cash-Collecting officer
Buildings
Cash-disbursing officer
Buildings
10,000
10,000
10,000
10,000
Using the same information in Nos. 25, 28, 29, and 30, the entry to record
the turnover and acceptance of the building:
a.
b.
c.
d.
Buildings
Construction in Progress - Agency
Assets Bldgs
Memorandum entry in RAOCO
Buildings
Construction in Progress - Agency
Assets Buildings
No entry is required.
10,000,000
10,000,000
9,990,000
9,990,000
34.
Using the same information in No. 33, except that the turnover and acceptance
of completion is for Public Roads instead of building, the entry would be:
a.
b.
c.
d.
35.
9,990,000
9,990,000
9,990,000
9,990,000
10,000,000
9,990,000
10,000,000
9,990,000
Agency NNN issued check to Nongovernment Organziations (NGO's) for
fund assistance amounting to P100,000. The entry to record this transaction
would be:
a.
b.
c.
d.
36.
Roads, Highways and Bridges
Construction in Progress - Roads,
Highways, Bridges
Public Infrastructures
Construction In Progress - Roads,
Highways, Bridges
Subsidy Income from Nat'l. Gov't
Construction in Progress - Roads,
Highways, Bridges
Subsidy Income from National Gov't...
Construction in Progress - Roaas,
Highways, Bridges
No entry
Memorandum entry in RAOMO
Due from National Gov't. Agency
Cash-National Treasury, MDS
Other Receivables
Cash-National Treasury, MDS
100,000
100,000
100,000
100,000
Using the same information in No. 35, Agency NNN received liquidation reports
from NGO's amounting to P90,000. The entry to record this transaction would be:
a.
b.
c.
d.
No entry
Memorandum entry only is RAOMO.
Grants and Donations
Due from National Gov't. Agency
Grants and Donation
Other Receivables
90,000
90,000
90,000
90,000
37. Agency OOO had a balance of PI,000,000 unused NCA (Cash-NT, MDS)
balance, what would be the entry to adjust this Unused NCA:
a.
b.
c.
Subsidy Income from Nat'l. Gov't
Due fron NGA
Subsidy Income from Nat'l. gov't
Cash-National Treasury, MDS
Cash-National Treasury, MDS
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
d.
Subsidy Income from Nat'l. Gov't..
No entry.
1,000,000
38. Agency PPP had a P20.000 credit balance of Subsidy Income from National
Government, what would be the entry to record this transaction?
a.
Subsidy Income from Nat'l. Gov't
Income and Expense Summary
b. Subsidy Income from Nat'l. Gov't
Cash-National Treasury, MDS
c. Subsidy Income from Nat'l. Gov't
Due from National Gov't. Agency.
d. No entry.
20,000,000
20,000,000
20,000,000
20,000,000
20,000,000
20,000,000
39. What is the entry to record the collection of a P15,000,000 corporate income
taxes by the BIR in its agency books?
a.
b.
c.
d.
Memo entry
Cash Collecting Officer
Income Tax - Corporation
Cash, National Treasury, MDS
Income Tax - Corporation
Income Tax - Corporation
Cash Collecting Officer
15,000,000
15,000,000
15,000,000
15,000,000
15,000,000
15,000,000
40. What is the entry on the Agency books to record BIR's remittance of the
same collection to the BTr?
a.
b.
c.
d.
Memo entry
Cash Collecting Officer
Income Tax - Corporation
Cash, National Treasury, MDS
Income Tax - Corporation
Income Tax - Corporation
Cash Collecting Officer
15,000,000
15,000,000
15,000,000
15,000,000
15,000,000
15,000,000
41. Agency CCC issued a bill for rent of office space to JTE Holdings, P50,000.
The agency is authorized as per a special provision in the GAA to use receipts
from rentals for their operations. The entry on the Agency books to record
the foregoing transactions would be:«
a.
b.
c.
Memo entry.
Accounts Receivable
Rent income
Accounts Receivable
50,000
50,000
50,000
d.
42.
50,000
50,000
Agency XXX conducted a seminar/conference and was able to collect
seminar fees from attendees totaling a PI00,000. The authority to use such
receipt is subjected to limitations that any excess over those expended for
seminar/conference costs shall be remitted to the National Treasury. P20,000 and
P5,000 from the amount collected were used for rent of the seminar/
conference venue and office supplies used, respectively. The excess amount was
remitted to the BTr. The entry/ies to record the remittance of the excess would be:.
a.
b.
c.
d.
43.
Due to BTr
Accounts Receivable
50,000
Subsidy Income from National Government
Seminar Fees
75,000
Cash in Bank - LCCA
Due to BTr
75,000
Cash in Bank - LCCA...,
Rent Expense
20,000
Office Supplies expense
5,000
Due to BTr
75,000
Cash in Bank-LCCA
Subsidy income from National Government 75,000
Cash in Bank - LCCA
:.
75,000
75,000
100,000
75,000
Agency ABC sold a 50% depreciated motor vehicle which had an original
cost of P300,000 for P200,000. The proceeds shall be deemed automatically
appropriated for the purchase of replacement higher capacity vehicle worth
P500,000, net of applicable tax. The agency subsequently received a NCA of
P500,000 for the purchase of the said vehicle. What is the entry to record the
receipt from the disposal of the motor vehicle?
a.
b.
c.
d.
Cash - Collecting Officer
Due to BTr
Cash - Collecting Officer
Gain on Sale of Disposed Assets
Cash - Collecting Officer
Accumulated Depreciation - Vehicles
Motor Vehicles
Gain on Sale of Disposed Assets
Cash - Collecting Officer
Accumulated Depreciation - Vehicles
Motor Vehicles
Due to BTr
200,000
200,000
200,000
200,000
200,000
150,000
300,000
50,000
200,000
150,000
300,000
50,000
44.
Using the information in number 43, what is the entry to record remittance
of the collection to the BTr, if any.
a.
b.
c.
d.
45.
No necessary entry, since there is no need to remit the collection
to the BTr.
Gain on Sale of Disposed Assets
50,000
Government Equity
150,000
Cash - Collection Officer
200,000
Due to BTr
200,000
Cash - Collecting Officer
200,000
Subsidy Income from National Government200,000
Cash - Collecting Officer
200,000
Using the information in number 43, what is the entry to record the receipt
of the NCA for the purchase of new motor vehicle?
a.
b.
c.
d.
Memo entry
Cash - National Treasury, MDS
300,000
Subsidy Income from National Government
Cash - National Treasury, MDS
450,000
Subsidy Income from National Government
Cash - National Treasury, MDS
500,000
Subsidy Income from National Government
300,000
450,000
500,000
46. Agency QQQ had the following account balances for the year 2017:
Dr(Cr)
Cash
Receivables
Marketable securities
Fixed assets
Long-term investments
Other assets
Inventories
Prepaid Expenses
Accumulated depreciation
P5,000,000
10,000,000
18,000,000
95,000,000
5,000,000
8,000,000
7,000,000
2,000,000
(5,000,000)
Determine the current assets for the year 2017:
a.
b.
P55,000,000
95,000,000
c. PI 45,000,000
d.
42,000,000
47. Agency RRR had the following account balances for the year 2017:
Current Assets
Investments and Fixed Assets
Other Assets
Liabilities
Contingent Liabilities
Contingent Assets
P10,000,000
90,000,000
5,000,000
18,000,000
5,000,000
3,000,000
Determine the Government Equity for the year 2017:
a.
b.
PI 05,000,000
85,000,000
c.
d.
P87,000,000
82,000,000