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GAM Journal-Entries - Government Accounting basic journal
entries for beginners that will guide you
Accounting for Government and Non-Profit Organizations (Pontifical and Royal
University of Santo Tomas, The Catholic University of the Philippines)
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GOVERNMENT ACCOUNTING MANUAL (GAM)
ILLUSTRATIVE ENTRIES
CA51027
MULTIPLE CHOICE
1. Which of the following statements concerning the period of validity of Notice of Cash
Allocations (NCAs) is incorrect?
a. NCA issued and credited to the Regular MDS Sub-Accounts of agencies/OUs for their
regular operations, shall be valid until the last working day of the 3rd month of that
quarter pursuant to DBM Circular Letter (CL) No. 2013-12.
b. NCA issued and credited to the Special MDS Accounts of agencies specifically for
payment of RG/TL benefits shall be valid until the last working day of the following
month when the NCA was issued, except when issued in December, pursuant to DBM
Budget Circular No. 2013-1
c. NCA issued to the BTr for working funds of agencies shall be valid until the last working
day of the year.
d. NCA, regardless of source, shall be valid only for a period of 1-month from the
date of receipt.
2. On December 31, 2020, the Department of the Interior and Local Government billed its
lessee on one of its buildings in the amount of P100,000. On January 31, 2021, the DILG
collected all of the accounts receivable. On February 28, 2021, the DILG remitted all the
collected amounts to the Bureau of Treasury. What is the journal entry to record the
remittance to the Bureau of Treasury?
a. Debit – Rent Receivable P100,000 and Credit – Rent Income P100,000(Dec 31,2020)
b. Debit – Rent Receivable P100,000 and Credit – Retained Earnings P100,000
c. Debit – Cash Collecting Officer P100,000 and Credit – Rent Receivable P100,000 (Jan
31,2021)
d. Debit – Cash – Treasury/Agency Deposit, Regular – P100,000 and Credit Cash –
Collecting Officer – P100,000
Cash Coll Officer
Rent Income
Cash - Treasury/Agency Deposit
Rent Revenue
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3. On January 1, 2020, the Department of Science and Technology received a P10,000,000
appropriation from the national government for the acquisition of laboratory equipment. On
February 1, 2020, DOST received the allotment from the Department of Budget and
Management. On March 1, 2020, DOST entered into a contract with Express
Manufacturing Inc. for the acquisition of the equipment with a price of P8,000,000. On April
1, 2020, DOST received the Notice of Cash Allocation from the Department of Budget and
Management net of 1% withholding tax for income tax of supplier and 5% withholding of
Final Tax on VAT of supplier. On May 1, 2020, Express Manufacturing Inc. delivered the
equipment to DOST. On June 1, 2020, DOST paid the obligation to Express Manufacturing
Inc. On July 1, 2020, DOST remitted the withheld income tax and final VAT to BIR. What is
the journal entry on March 1, 2020?
a.
b.
c.
d.
No entry but just posting to appropriate registry --- Jan 1
No entry but just posting to appropriate registry --- Feb 1
No entry but just posting of ORS (Obligation Request and Status) March 1
Debit Equipment P8,000,000 and credit Accounts Payable P8,000,000
4. Using the same data in number 3, what is the journal entry on April 1, 2020?
a. Debit Cash-MDS, Regular P7,520,000 and Credit Subsidy Income from National
Government P7,520,000.
b. Debit Equipment P8,000,000 and Credit Accounts Payable P8,000,000 ---May 1
c. Debit Accounts Payable P8,000,000 and Credit Due to BIR P480,000 and Cash-MDS,
Regular P7,520,000.
d. Debit Due to BIR P480,000 and Credit Subsidy Income from National Government
P480,000. TRA (Tax Remittance Advice)
5. The payroll accountant of Department of Foreign Affairs provided the following data
concerning the salaries of its officers and employees for the month ended December 31,
2020:
Salaries and wages
Personal Economic Relief Allowance (PERA)
Gross compensation
Withholding income tax
GSIS
PAG-IBIG
Philhealth
Net
P510,000
55,000
565,000
51,000
15,300
10,200
510
P487,990
DFA received the notice of cash allocation from the DBM net of 10% tax on basic salary.
Afterwards, DFA granted cash advance to the cashier for the payroll. The DFA cashier paid
the employees and submitted the liquidation report of the payroll fund with the
corresponding supporting documents. DFA remitted the withheld tax to BIR and the
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withheld contribution to GSIS, PAG-IBIG and Philhealth. What is the journal entry to
recognize the grant of cash advance to the cashier for the payroll?
a. Cash – MDS, Regular
Subsidy Income from National Government
514,000
b. Salaries and Wages
PERA
Due to BIR
Due to GSIS
Due to PAG-IBIG
Due to Philhealth
Due to officers and employees
510,000
55,000
514,000
51,000
15,300
10,200
510
487,990
c. Advances for payroll
Cash-MDS, Regular
d. Due to officers and employees
Advances for payroll
487,990
487,990
487,990
487,990
e. Due to BIR
Subsidy Income from National Government
51,000
f. Due to GSIS
Due to PAG-IBIG
Due to Philhealth
Cash – MDS, Regular
15,300
10,200
510
51,000
26,010
6. The Department of Justice received a Notice of Cash Allocation in the amount of
P1,500,000 from DBM. The DOJ made a total cash disbursement in the amount of
P1,225,00. What is the journal entry to recognize reversion of unused Notice of Cash
Allocation by DOJ in its books?
a. Debit Subsidy Income from National Government P275,000 and credit Cash-MDS,
Regular P275,000.
b. Debit Retained Earnings P275,000 and credit Cash-MDS, Regular P275,000.
c. Debit Expenses P275,000 and credit Cash-MDS, Regular P275,000.
d. Debit Investment P275,000 and credit Cash-MDS, Regular P275,000.
Cash -MDS, Regular 1,500,000
SING
1,500,000
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7. Which of the following closing entries in the accounting book of the Department of
Transportation and Communications is incorrect if the following data are provided by its
chief accountant?
Total Income, aside from SING
P1,598,000
Total expenses
791,652
Total Subsidy Income from National Government 1,181,882
a. Income account other than SING
Revenue and Expense Summary account
b. Revenue and Expense Summary account
Expense account
1,598,000
1,598,000
791,652
791,652
c. Subsidy Income from National Government
Revenue and Expense Summary Account
1,181,882
d. Revenue and Expense Summary Account
Accumulated Surplus/(Deficit)
1,988,230
e. Ordinary shares
Share premium
3,931,534
1,181,882
1,988,230
3,931,534
8. On January 31, 2020, the collecting officer of the Bureau of Customs collected P350,000
import duties plus fines of P10,000 on the goods of an importer. On February 28, 2021, the
Bureau of Customs remitted the P360,000 to the Bureau of Treasury. What is the journal
entry to record the collection of the import duties and fines?
a. Debit Cash-Collecting Officer P360,000 and Credit Import Duties P350,000 and
Fines/Penalties P10,000.
b. Debit Cash-Treasury/Agency Deposit, Regular P360,000 and Credit Cash-Collecting
Officer P360,000.
c. Debit Cash-Treasury/Agency Deposit, Regular. P360,000 and Credit Import Duties
P350,000 and Fines/Penalties P10,000.
9. Using the same data in number 8, but assuming the importer directly deposited the
350,000 import duties and P10,000 fines through Authorized Agent Banks instead of
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collection by a customer collecting officer, what is the journal entry to record the
collection/remittance of import duties and fines to the Bureau of Treasury?
a. Debit Cash-Collecting Officer P360,000 and Credit Import Duties P350,000 and
Fines/Penalties P10,000.
b. Debit Cash-Treasury/Agency Deposit, Regular P360,000 and Credit Cash-Collecting
Officer P360,000.
c. Debit Cash-Treasury/Agency Deposit, Regular P360,000 and Credit Import Duties
P350,000 and Fines/Penalties P10,000.
10. The Bureau of Treasury received P100,000 cash remittance from the Department of
Agrarian Reform (DAR) from its miscellaneous income. What is the journal entry of the
Bureau of Treasury in its accounting books to record the receipt of cash remittance from
the income of a national government agency such as (DAR), except BIR and BoC?
a. Debit Cash in Bank, Local Bank or BSP P100,000 and Credit Cash-Treasury/Agency
Deposit, Regular P100,000.
b. Debit Cash in Bank, Local Bank or BSP P100,000 and Credit Miscellaneous Income of
DA P100,000.
c. Debit Cash in Bank, Local Bank or BSP P100,000 and Credit Savings of DA, Regular
P100,000.
d. Debit Cash in Bank, Local Bank or BSP P100,000 and Credit Cash-Collecting
Officer, DA P100,000.
11. The Department of National Defense obtained a loan from Asian Development Bank to
finance the acquisition of the Philippine's first aircraft carrier. The principal of the loan($) is
P1B. What is the journal entry in the accounting book of the Bureau of Treasury to record
the receipt of loan proceeds based on credit advice from BSP?
a. Debit Cash in Bank, Local Bank or BSP P1B and Credit Cash-Treasury/Agency
Deposit, Regular P1B.
b. Debit Cash in Bank, Foreign Currency BSP P1B and Credit Loans PayableForeign P1B.
c. Debit Cash in Bank, Foreign Currency BSP P1B and Credit Subsidy Income From
Asian Development Bank P1B.
d. Debit Cash in Bank, Foreign Currency BSP P1B and Credit Capital Account, ADB P1B.
12. On February 1, 2020, the Department of Health received P10M cash from PLDT for
medical expenses of victims of calamities. The collection of the P10M donation is
considered as an authorized special account. DOH remitted the donation to the Bureau
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of Treasury on March 1, 2020. What is the journal entry on March 1, 2020 in the accounting
book of DOH?
a. Debit Cash-Collecting Officer P10M and Credit Medical Fees P10M.
b. Debit Cash-Treasury/Agency Deposit Special Account P10M and Credit CashCollecting Officers P10M.
c. Debit Cash in Bank-Local Currency, Savings Account P10M and CreditTreasury/Agency Deposit, Special Account P10M
d. Debit Cash-Treasury/Agency Deposit P10M and Credit Medical Fees P10M.
13. On September 1, 2020 P10M donation was deposited directly by the United Nations World
Health Organization to the Bureau of Treasury to help the Philippine government battle
CoronaVirus. What is the journal entry in the accounting book of the Bureau of Treasury to
record the receipt of grants or donations from UN-WHO?
a. Debit Cash in Bank, Foreign Currency Savings Deposit P10M and Credit Income
from Grants and Donations P10M.
b. Debit Cash Collecting Officer P10M and Credit Income from Grants and Donations
P10M.
c. Debit Cash in Bank, Foreign Currency Savings Deposit P10M and Credit Loans
Payable P10M.
d. Debit Cash Collecting Officer P10M and Credit Ordinary Share, UN WHO P10M.
14. On February 1, 2020, the Department of Environment and Natural Resources (DENR)
transferred P450,000 fund to the Department of Public Works and Highway (DPWH) for the
construction of DENR’s irrigation project. The P450,000 fund was then remitted by DPWH
to the Bureau of Treasury on May 1, 2020. The project was completed and turned over by
DPWH to DENR on October 31, 2020. What is the journal entry in DENR’s book to
record the transfer of funds on February 1, 2020?
a. Debit Due from DPWH P450,000 and Credit Cash, MDS, Regular P450,000.
b. Debit Cash-Treasury/Agency Deposit/Trust P450,000 and Credit Cash-Collecting
Officers P450,000.
c. Debit Cash Collecting Officers P450,000 and Credit Due to DENR P450,000
d. Debit Cash-Treasury/Agency Deposit/Trust P450,000 and Credit Cash-Collecting
Officers P450,000.
15. Using the same data in number 14, what is the journal entry of DPWH to record the
turnover of the irrigation project to DENR on October 31, 2020?
a. Debit Due to DENR P450,000 and Credit Project Title account Account P450,000
b. Debit Project Title Account P450,000 and Credit Due from DPWH P450,000.
c. Debit Due to DENR P450,000 and Credit Cash-Collecting Officer P450,000
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d. Debit Cash Collecting Officer P450,000 and Credit Due from DPWH P450,000.
-end of material-
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