60. This type of budget is prepared in such a way that estimated revenues exceed estimated expenditures.

a.Obligations budget

b.Budget meal

c.Excess budget

d.Balanced budget

8. When determining depreciation, an entity considers all of the following except

a.Expected residual value at the end of the asset's useful life

b.Initial cost

c.Useful life

d.Whether the asset is classified as with finite or indefinite useful life.

16. Entity A exchanges an item of PPE with Entity B. How should Entity A account for any cash paid or received from the exchange?

a.Account for any cash paid or received in gain or loss but not on the initial measurement of the asset received.

b.Add the cash paid to the initial measurement of the asset received.

c.Add the cash received to the initial measurement of the asset received.

d.Deduct the cash paid from the initial measurement of the asset received.

6. This refers to valid and legal obligations of NGAs/OUs, for which, goods/services/projects have been delivered/rendered/completed and accepted, regardless of the year when these obligations were incurred.

a.Obligations

b.Liability

c.Not Yet Due and Demandable

d.Accounts Payable

21. The notes to the financial statements is least likely to be expected to show which of the following information?

a.General information on the reporting entity.

b.Current and noncurrent distinctions of assets and liabilities.

c.Statement of compliance with the PPSAS and basis of preparation of financial statements.

d.Summary of significant accounting policies.

43. The 8-digit Revised Chart of Accounts (RCA) Code for revenues starts with number

a.2

b.None of these

c.5

d.1

27. Which of the following applies to business entities but not to government entities?

a.Presenting information on earnings per share.

b.Continued depreciation of idle equipment.

c.Accounting for biological assets at fair value less costs to sell.

d.Preparation of interim financial statements.

40. If plotted on a graph, the periodic interest expenses recognized on bonds issued at a premium will show a: (X axis - time; Y axis - )

a.curvilinear line sloping here and there

b.downward line sloping to the right

c.straight line

d.upward line sloping to the right

51. A private not-for-profit hospital provided P150,000 in charity care for the current year. The hospital should report this charity care as

a. As an unpaid accounts receivable on the balance sheet.

b. Only in the notes to the financial statements.

c. Net patient service revenue of P150,000 and patient care expense of P150,000.

d. Net patient service revenue of P150,000 on the statement of operations.

38. Which of the following statements is incorrect regarding the accounting for unreleased checks by a government entity?

a.The accounting procedures for unreleased checks prescribed under the GAM for NGAs apply only to commercial checks.

b.Unreleased checks are reverted back to cash.

c.Unreleased checks are perforated.

d.At the start of the year, a reversing entry is made for the unreleased checks in the previous year.

32. The classification of leases under the GAM for NGAs is based on

a. the significance in value of the leased asset and the length of the lease term.

b. the form of the contract rather than the substance of the transaction.

c.bthe extent of transfer of risks and rewards incidental to ownership of the leased asset from the lessor to the lessee.

d. the significance in value of the leased asset.

23. This is attached to the annual general purpose financial statements of a government entity as a cover letter.

a. Dedications, acknowledgments and best wishes.

b. Report on Highlights and Executive Summary

c. President's Budget Message

d. Statement of Management Responsibility for Financial Statements

48. Vista, a voluntary health and welfare organization, received a donation of P100,000 to be spent in accordance with the wishes of the institution's Board of Trustees. This donation should be reported on the statement of activities as:

a. Unrestricted revenue.

b. Temporarily restricted revenue

c. Other income - gifts.

d. Permanently restricted revenues

50. Home Care, Inc., a nongovernmental voluntary health and welfare organization, received two contributions in 2003. One contribution of P250,000 was restricted for use as general support in 2004. The other contribution of P200,000 carried no donor restrictions. What amount should Home Care report as temporarily restricted contributions in its 2003 statement of activities.

a.P250,000

b.P200,000

c.P0

d.P450,000

20. Which of the following statements is correct regarding the presentation of financial statements by government entities?

a. Non-adjusting events are never recognized but are always disclosed.

b. Changes in accounting policies may be accounted for by prospective application.

c. Just like business entities, government entities may (if they choose to) prepare interim financial statements on a quarterly basis.

d. Prior period errors are corrected by retrospective application.

25. The operator in a service concession arrangement is a

a. private entity

b. jeepney

c. government entity

d. separate entity

9. Entity A spends 20,000 on the repair of one of its equipment. It is not clear whether the repair is a major repair or a minor repair. In accordance with the GAM for NGAs, how should Entity A account for the repair cost?

a. As an addition

b. All the choices

c. As a major repair

d. As a minor repair

53. Which one of the following is not a required financial statement for a private voluntary health and welfare organization?

a. Statement of Cash Flows

b. Statement of Activities and Changes in Net Assets

c. Statement of Financial Position

d. Statement of Fund Balance

e. Statement of Functional Expense

75. The taxable event for Value added tax (VAT) is the

a. any of these

b. earning of taxable income.

c. undertaking of a taxable activity.

d. movement of dutiable goods or services across the customs boundary.

38. Which of the following principles used by business entities is not applicable to non-profit organizations/

a. Use of fair value measurement

b. Accrual basis of accounting

c. Disclosure of earnings per share.

d. Going concern

71. Which of the following is a non-exchange transaction?

a. Rendering of legal services

b. Collection of tuition fees

c. Leasing

d. Collection of taxes

52. Cash flows from a public university bookstore would appear on the statement of cash flows as

a. Cash flows from financing activities.

b. Cash flows from investing activities.

c. Cash flows from noncapital financing

d. Cash flows from operations.

15. Which of the following may not be included in the inventories of a government entity?

a. rice and other welfare goods held for distribution

b. equipment costing 15,000

c. raw materials and work-in-process

d. accountable forms

3. Account titles in the Revised Chart of Accounts (RCA) are arranged according to this sequence

a. Assets, Equity, Liability, Revenue, and Expenses

b. Assets, Liability, Equity, Revenue, and Expenses

c. In no particular order.

d. Assets, Expenses, Liability, Equity and Revenue

2. It refers to the disbursement authority issued by the DBM to agencies with foreign operations allowing them to use the income collected by their Foreign Service Posts to cover their operating requirements.

a. Non-Cash Availment Authority (NCAA)

b. Tax Remittance Advice (TRA)

c. Cash Disbursement Ceiling (CDC)

d. Notice of Cash Allocation (NCA)