ANSWER THE FOLLOWING:

Overview of Government Accounting 17 I in making PROBLEMS: Iso aims to he resources PROBLEM 1-1: TRUE OR FALSE 1. Compared to the accounting for business entities, government accounting accounting places greater emphasis on the sources and utilization of government funds and the management's government stewardship over government resources. procedures to 2. Taxes are the main source of funds of the government. ent entities. It armonize the 3. Other sources of funds of the government include fees, international borrowings, and grants from other governments and international bodies. ther relevant of accounts, 4. Currently, the financial reporting of government entities is based on NGAS. counting and 5. The principles used in the financial reporting of government Relevance, entities are very unique that only a very few of these epresentation, principles are similar to those that are applied to business Completeness, entities. owing criteria 6. The principles in the GAM for NGAs are similar to the principles in the PFRSs. 7. The GAM for NGAs is promulgated by the Philippine Congress and under the authority conferred to it under the Philippine .g., fair Constitution. 8. A unique financial reporting requirement of government entities is the use of fund cluster accounting. Under fund cluster accounting, separate books and reports are prepared for each type of fund held by a government entity. 9. The GAM for NGAs is promulgated primarily to harmonize government accounting standards with the U.S. GAAP.18 Ove 10. An item is recognized as an asset if it meets both the "probable future economic benefits" and "reliable measurement" criteria, regardless of whether the item is a resource controlled arising from past events. 5 . PROBLEM 1-2: MULTIPLE CHOICE 1. Which of the following is a unique requirement of government accounting that is not required in the accounting for business entities? a. The use of double-entry recording system. 6 . b. The use of single-entry recording system. c. The use of accrual basis of accounting. d. The presentation of budget information in the financial statements. 2. What is the legal basis of the COA in promulgateng the GAM for NGAs? a. P.D. No. 1445, State Audit Code of the Philippines b. The Philippine Constitution 7 . c. R.A. 9298, The Philippine Accountancy Act of 2004 d. Philippine Public Sector Accounting Standards (PPSAS) 3. Which of the following is tasked in keeping the general accounts of the government, supporting vouchers, and other documents? a. COA c. NGAs b. DBM d. Congress 4. The Bureau of Treasury (BTR) is responsible for a. promulgateing accounting and auditing rules and regulations. b. the formulation and implementation of the national budget with the goal of attaining the nation's socio- economic objectives.Overview of Government Accounting 19 probable rement" ntrolled c. receiving and keeping national funds and managing and controlling the disbursements thereof. d. directly implementing the projects of the government. 5. According to the GAM for NGAs, the basis of accounting to be applied by government entities is the rnment a. Cash basis c. Modified accrual basis business b. Accrual basis d. Any of these as a policy choice 6. Government resources must be utilized efficiently and effectively in accordance with the law. According to P.D. No. 1445, who is directly responsible in implementing this policy? inancial a. All employees who are entrusted with the possession of government resources. b. The head of the government agency. e GAM c. The COA. d. All elected officials. 7. The transfer of government funds from one officer to another requires the prior authorization of the a. Commission on Audit SAS) b. Head of the Agency c. The President of the Republic of the Philippines general d. Bureau of Treasury d other 8. Mr. A, a government employee entrusted with the custody of government funds, was instructed by Mr. B (a politician) to release funds for the acquisition of a car as a birthday gift for Mr. B's daughter who will be having her 18th birthday next week. To relieve Mr. A from any liability, what should Mr. A do? es and a. Mr. A shall not release the fund but rather notify Mr. B, in writing, that his instruction is illegal. national b. Mr. A shall release the fund and then notify Mr. B, in s socio- writing, that his instruction is illegal. c. Mr. A shall release the fund but retains 20% commission.20 d. Mr. A shall release the fund but requires Mr. B to promise, Ov in writing, that the car shall be returned to the government after his daughter's birthday. 13 9. Mr. C, a government employee entrusted with the custody of government funds, has lost the government funds entrusted to him in a force majeure. What should Mr. C do to relieve him from liability? a. Mr. C should immediately notify the Head of Agency after 30 days. b. Mr. C should immediately notify the COA within 30 days. c. Mr. C should immediately notify the Bureau of Treasury within 30 days. d. Mr. C should keep the event a secret and wait for next funds to arrive. 10. These refer to the attributes that make information useful to users. a. Usefulness characteristics b. Quantitative characteristics c. Qualitative characteristics d. Fundamental principles 11. Information loses this qualitative characteristic if it is not reported on a timely basis. a. Relevance c. Neutrality b. Reliability d. Materiality 12. Which of the following qualitative characteristics does an entity most likely would need to make some trade-offs? a. Faithful representation and Substance over form b. Materiality and Relevance c. Relevance and Reliability d. Understandability and ComparabilityOverview of Government Accounting 21 nise, ment 13. An entity recognizes an estimated loss from the decline in value of a property. Which of the following is most likely the of qualitative characteristic being applied by the entity? d to a. Reliability c. Faithful representation b. Substance over form d. Prudence im 14. Which of the following is not one of the fund clusters of a fter government entity? a. Regular Agency Fund ys. b. Foreign Assisted Projects Fund ury c. Special Account-Locally Funded/Domestic Grants Fund d. Business Related Funds ext e. Petty Cash Fund 15. To achieve a proper balance between relevance and reliability, to the overriding consideration is a. how users' needs are best satisfied. b. relevance is always more important than reliability. c. reliability is always more important than relevance. d. greater weight shall be given to relevance compared to reliability. PROBLEM 1-3: FOR CLASSROOM DISCUSSION 1. How does government accounting differ from the accounting for business entities? a. Government accounting places more emphasis on profit- making. an b. Government accounting is very complex that only highly intellectual individuals can understand it. c. Government accounting places greater emphasis on sources and utilization of funds in accordance with the law and management's stewardship over government resources entrusted to the entity.22 Overview d. Government accounting is specialized in nature that the principles applicable to business entities are never applicable to government entities. 6. WH for 2. Which of the following is not a source of revenue for the a. government? b . a. Taxes C . b. Fees collected by government agencies c. Grants and donations from other governments d. d. Contract price on government contracts awarded to private companies. 7. A 3. Entity A (a government agency) is entrusted with government resources. According to P.D. 1445, who is directly responsible for the efficient and effective utilization of these resources? a. The government employees who have custody over the resources. b. The Head of Entity A. c. The COA staff stationed in Entity A. 8. d. The Foot of Entity A. 4. Which of the following is not charged with government accounting responsibility under the GAM for NGAs? a. COA c. NGAs 9. b. DBM d. House of Representatives 5. The Department of Budget and Management (DBM) is responsible for a. promulgateng accounting and auditing rules and regulations. 10 b. the formulation and implementation of the national budget with the goal of attaining the nation's socio- economic objectives. c. receiving and keeping national funds and managing and controlling the disbursements thereof. d. directly implementing the projects of the government.6. Which of the following is not one of the objectives of the GAM for NGAs? Back a. to harmonize government accounting standards with international standards. b. to update the coding structure and accounts c. to update accounting books, registries, records, forms, reports and financial statements. d. to update government accounting standards to be consistent with the provisions of U.S. GAAP. 7. All of the following are requirements peculiar to a government entity. Which is not? a. Presenting budget information in the financial statements. b. Fund cluster accounting. c. Incorporating budgetary controls in the financial reporting system . d. Accrual basis of accounting. 8. Which of the following qualitative characteristics is improved when information is reported on a timely basis? a. Relevance c. Understandability b. Reliability d. a and b 9. The best estimate for a loss is P100,000. However, the entity deliberately overstated the loss to P200,000. Which of the following qualitative characteristics is violated? a. Prudence c. a and b b. Reliability d. Nothing is violated 10. Which of the following financial statements is peculiar to a government entity? a. Balance Sheet b. Statement of Cash Flows C. Statement of Comparison of Budget and Actual Amounts d. Statement of Changes in Equity