Government Accounting Quiz 7 Write The Letter Pertaining To Best Answer

Government Accounting
Quiz 7
Write the letter pertaining to best answer.
1. On March 1, the Bureau of Treasury received credit advice amounting to $500,000 from
the Bangko Sentral ng Pilipinas for loan received from World Bank for the housing
project in Agusan Del Norte which was highly affected by Typhoon Andoy. The loan is
payable within 30 years. Exchange rate at the transaction date is P51.40:$1.
What is the entry to recognize the loan received from World Bank?
25,700,00
a. Cash in Bank-Foreign Currency, Bangko Sentral ng Pilipinas 0
25,700,00
Loans Payable-Foreign 0
25,700,00
b. Subsidy to National Government 0
25,700,00
Cash in Bank-Foreign Currency, Savings Account 0
25,700,00
c. Subsidy to National Government 0
Cash in Bank-Foreign Currency, Bangko Sentral ng 25,700,00
Pilipinas 0
25,700,00
d. Cash in Bank-Foreign Currency, Savings Account 0
25,700,00
Loans Payable-Foreign 0
2. The National Government received a foreign grant amounting to P50,000,000 from

Japanese Government for the construction of a public school in Saranggani Province.
Under the terms of the grant, the money can only be used as stipulated and the money
shall be returned to the grantor if the construction project is not completed within a
period of 18 months from the receipt of the grant.
What is the journal entry to record the receipt of grant in the books of the Bureau of
Treasury?
a. Cash-Collecting Officer 50,000,000
Income from Grants and Donations 50,000,000
b. Loans Payable 50,000,000
Cash in Bank, Foreign Currency Savings Deposit 50,000,000
c. Cash in Bank, Foreign Currency Savings Deposit 50,000,000
Income from Grants and Donations 50,000,000
d. No entry, Posting to appropriate Registry of Allotments, Obligations and
Disbursements (RAOD)
3. Jocelyn Santiago is the Petty Cash Custodian of National Archives of the Philippines
since 1998. She will retire on July 31, 2020 on her position due to lingering ailment. The
established petty cash fund is P30,000 with a total expenses paid and liquidated
amounting to P24,800. What is the entry to record the return of unused Petty Cash Fund
upon the retirement of the Petty Cash Custodian?
a. Cash Collecting officer 5,200

Cash-Modified Disbursement System, Regular 5,200
b. Cash-Modified Disbursement System, Regular 5,200
Petty Cash Fund 5,200
c. Cash Collecting officer 5,200
d. Expenses 24,800
Cash-MDS, Regular 5,200
4. The Land Transportation Office’s taxes withheld through Tax Remittance Advice
amounted to P1,200,000. What is the entry on the books of Bureau of Internal Revenue to
recognize constructive receipt of tax revenue based on the TRA received from the
agency?
a. Due to BIR 1,200,000

Income Tax 1,200,000
b. Due to BIR 1,200,000
Cash-Tax Remittance Advice 1,200,000
c. Cash-Tax Remittance Advice 1,200,000
Subsidy from National Government 1,200,000
d. Cash-Tax Remittance Advice 1,200,000
Income Tax 1,200,000
5. MGC Builders Inc. constructed a two-storey building in Caloocan for Local Water
Utilities Administration which will serve as the agency’s storage area with a total cost of
P580,000 consisting of construction materials (inclusive of VAT), labor costs and various
overhead expenses amounting to P330,000, P170,000, and P80,000, respectively. What is
the entry to recognize investment property upon completion of construction?
a. Investment Property, Buildings 580,000

Subsidy from National Government 580,000
b. Investment Property, Buildings 580,000
Construction in Progress- Investment Property, Building 580,000
c. Investment Property, Buildings 580,000
d. No entry, Posting to appropriate Registry
6. On October 1, 2020, the Land Transportation Office – Central Office transferred to a

Regional Office (RO) an office equipment which was purchased by the agency last
January 1, 2020. The equipment’s acquisition cost is P90,000 and its accumulated
depreciation is P20,000. What is the entry to recognize the transfer of office equipment in
the books of the Central Office?
90,00
a. Office Equipment 0
20,00
Accumulated Depreciation - Office Equipment 0
70,00
Office Equipment 0
90,00
b. Subsidy to Regional Offices/Staff Bureaus 0
90,00
Office Equipment 0
70,00
c. Subsidy to Regional Offices/Staff Bureaus 0
70,00
Office Equipment 0
70,00
d. Subsidy to Regional Offices/Staff Bureaus 0
20,00
Accumulated Depreciation - Office Equipment 0
90,00
Office Equipment 0
7. Cooperative Development Authority purchased a land with a cash price of P3,600,000. It

is agreed that the agency shall pay 35% down payment and the balance is payable in 8
equal annual installments at 6% interest per year. The land was bought for capital
appreciation only. What is the entry to recognize payment of first annual installment?
Ignore tax implication.
a. Investment Property, Land 292,500

b. Accounts Payable 292,500
c. Accounts Payable 274,950
Interest Expenses 17,550
d. Accounts Payable 292,500
Interest Expenses 17,550
8. NS Constructions Inc. constructed a building intended a safe house for crime witnesses.
The Contract Price of the project is P8,400,000, inclusive of VAT, payable in two
progress billings. The agreement states the following:
i. An advance payment to the Contractor shall be given amounting to P1,200,000

ii. The contract is payable in two progress billings.
iii. Retention fee is 10% of the progress billing.
What is the journal entry to record the payment of first progress billing? Ignore tax
implications.
a. Accounts Payable 4,200,000

Cash-Modified Disbursement System, Regular 4,200,000
b. Accounts Payable 3,000,000
Guarantee Deposit 210,000
c. Accounts Payable 3,000,000
d. Accounts Payable 3,210,000
Guarantee Deposit 210,000
9. David Cruz – Collecting Officer of the Bureau of Immigration collected the following
tax:
Immigration tax P210,000

Travel tax 120,000
On February 1, the collection was directly remitted by the agency thru Authorized Agent
Banks. What is the journal entry to record collection/remittance of income to BTr
through Authorized Agent Banks?
a. Cash-Treasury/Agency Deposit, Regular 330,000

Cash-Collecting Officers 330,000
b. Cash-Treasury/Agency Deposit, Regular 330,000
Immigration tax 210,000
Travel tax 120,000
c. Cash-Collecting Officers 330,000
Cash-Treasury/Agency Deposit, Regular 330,000
d. Cash-Collecting Officers 330,000
Immigration tax 210,000
Travel tax 120,000
10. Department of Human Settlements and Urban Development received an unconditional

donation of a piece of land with a fair value of P10,000,000. What is the journal entry to
recognize the receipt of donated land?
a. Investment Property, Land 10,000,000

Income from Grants and Donation in Kind 10,000,000
b. Land 10,000,000
Income from Grants and Donation in Kind 10,000,000
Merchandise Inventory - Land/Reclaimed
c. Land 10,000,000
Contribution Revenue 10,000,000
d. Land 10,000,000
Contribution Revenue 10,000,000

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Government Accounting

Write the letter pertaining to best answer.

2. The National Government received a foreign grant amounting to P50,000,000 from

a. Cash Collecting officer 5,200

a. Due to BIR 1,200,000

a. Investment Property, Buildings 580,000

6. On October 1, 2020, the Land Transportation Office – Central Office transferred to a

7. Cooperative Development Authority purchased a land with a cash price of P3,600,000. It

a. Investment Property, Land 292,500

i. An advance payment to the Contractor shall be given amounting to P1,200,000

a. Accounts Payable 4,200,000

Immigration tax P210,000

a. Cash-Treasury/Agency Deposit, Regular 330,000

10. Department of Human Settlements and Urban Development received an unconditional

a. Investment Property, Land 10,000,000

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