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Govt Acctg 1234

The document contains 10 multiple choice questions that test knowledge of accounting concepts and standards. Specifically, the questions cover topics such as indicators of reliable measurement, types of government disbursement authorities, the sequence of accounts in the revised chart of accounts, indications of asset impairment, accounting for government transactions and financial results, impairment and reversal of impairment losses for intangible assets, accounting for operating leases, and accounting for biological assets including gains from changes in fair value.

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146 views

Govt Acctg 1234

The document contains 10 multiple choice questions that test knowledge of accounting concepts and standards. Specifically, the questions cover topics such as indicators of reliable measurement, types of government disbursement authorities, the sequence of accounts in the revised chart of accounts, indications of asset impairment, accounting for government transactions and financial results, impairment and reversal of impairment losses for intangible assets, accounting for operating leases, and accounting for biological assets including gains from changes in fair value.

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taylor swiftyyy
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© © All Rights Reserved
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Download as DOCX, PDF, TXT or read online on Scribd
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REVIEW MATERIAL

1. Which of the following is not an indicator of reliable measurement for an asset?


a. Benefits can be expected on the basis of available evidence or logic.
b. Valuation method is free from material error or bias.
c. Faithful representation of the asset’s benefits.
d. Reliable information will, without bias or undue error, faithfully represent those
transactions and events.

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. Notice of Cash Allocation (NCA)
b. Tax Remittance Advice (TRA)
c. Cash Disbursement Ceiling (CDC)
d. Non-Cash Availment Authority (NCAA)

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. Assets, Expenses, Liability, Equity and Revenue
d. In no particular order.

4. Which of the following is an indication of impairment from internal sources?


a. Significant changes with an adverse effect on the entity have taken place during the
period, or will take place in the near future, in the technological, market, economic, or
legal environment in which the entity operates, or in the market to which an asset is
dedicated.
b. During the period, an asset’s market value has declined significantly more than would be
expected as a result of the passage of time or normal use.
c. Significant changes with an adverse effect on the entity have taken place during the
period, or are expected to take place in the near future, in the extent to which, or the
manner in which, an asset is used or is expected to be used.
d. Market interest rates or other market rates of return on investments have increased
during the period, and those increases are likely to affect the discount rate used in
calculating an asset’s value in use and decrease the asset’s recoverable amount
materially.

5. Entity A, a government entity, had the following transactions during the period:

 Received Notice of Cash Allocation (NCA) amounting to ₱1,226,618.


 Earned total revenue of ₱1,598,000 from billings and collections of unbilled income.
 Incurred total expenses of ₱791,652.
 Remitted total taxes withheld of ₱87,460 to the BIR through Tax Remittance Advice
(TRA).
 The “Cash-Modified Disbursement System (MDS), Regular” has an unused balance of
₱132,196 at the end of the period.
How much is the surplus (deficit) for the period?
a. 1,988,230
b. 1,898,230
c. 1,742,320
d. 1,988,320

Revenue 1,598,000
Expenses (791,652)
Surplus (Deficit) from operations 806,348
Subsidy from NG (NCA) 1,226,618
Subsidy from NG (TRA) 87,460
Unused NCA (132,196)
Net Financial Assistance/Subsidy 1,181,882
Surplus (Deficit) for the period 1,988,23

6. The following accounts with their corresponding balances before closing were taken from the
accounting records of an NGA on December 31, 2018:

Accumulated Surplus/(Deficit), Beginning P250,000


Subsidy from National Government 600,000
Cash-Treasury/Agency Deposit, Regular 700,000
Travel Tax 65,000
Immigration Tax 225,000
Registration Fees 15,000
Other Service Income 50,000
Salaries and Wages-Regular 160,000
PERA 15,000
Traveling Expenses – Local 10,000
Office Supplies Expense 8,000
Water Expenses 5,000
Security Services 20,000

What is the balance of the Accumulated Surplus/(Deficit), End to be presented in the Statement of
Financial Position as of December 31, 2020?

Accumulated Surplus/(Deficit), Beginning 250,000


Add: Credit to Accumulated Surplus/(Deficit) 737,000
Less: Debit to Accumulated Surplus/(Deficit) (700,000)
Accumulated Surplus/(Deficit),Ending 287,000

Travel Tax                     65,000

   Immigration Tax         225,000

   Registration Fees            15,000

   Other Service Income     50,000

   Salaries and Wages-Regular  160,000


   PERA                                15,000

   Traveling Expenses – Local 10,000

   Office Supplies Expense  8,000

   Water Expenses          5,000

   Security Services          20,000  

   Revenue expense summary         137,000

   Add: Subsidy from Government 600,000

   Total                                                     737,000 (credit)

Use the following information for the next two questions:

At the beginning of Year 1, a government entity acquires an intangible asset for ₱100,000. The

intangible asset has a useful life of 10 years. At the end of Year 3, the entity determines an

indication of impairment and makes the following estimates:

Fair value less costs to sell 60,000

Value in use 50,000

7. How much is the impairment loss?

a. 10,000

b. 20,000

c. 30,000

d. 0

A (100,000 x 7/10) – 60,000 = 10,000

8. At the end of Year 6, Entity A determines an indication that the previous impairment may

no longer exist and makes the following estimates:

Fair value less costs to sell 32,000

Value in use 38,000P a g e | 5


How much is the gain on the reversal impairment loss?

a. 3,714

b. 5,714

c. 8,714

d. 0

Recoverable amount (VIU – higher): 38,000

CA had no I.L. been recognized in previous period:

(100,000 x 4/10) = 40,000

CA after the I.L: (60,000 x 4/7) 34,286

Gain on reversal of I.L. = (38,000* – 34,286) = 3,714

* Lower than CA had no I.L. been recognized in previous period

9. Entity A leased a new machine to Entity B on January 1, 20x1. The lease expires on

January 1, 20x6. The annual rental is ₱90,000. Additionally, on January 1, 20x1, Entity B

paid ₱50,000 to Entity A as a lease bonus and ₱25,000 as a security deposit to be refunded

upon expiration of the lease. In Entity A's 20x4 statement of financial performance, the

amount of rental revenue should be

a. 140,000

b. 125,000

c. 100,000

d. 90,000

C [90,000 + (50,000 ÷ 5 years)] = 100,000

10. On January 1, 20x1, the biological assets of Entity A consist of two 1-year old animals with

fair value less costs to sell of ₱1,000 each.


The following transactions occurred during the period:

 On July 1, 20x1, two 1-year old animals are acquired for ₱1,100 each, equal to the FVLCS

on this date.

 On October 1, 20x1, two animals are born. The FVLCS of a newborn on this date is ₱500.

The FVLCS on December 31, 20x1 are as follows:

Age FVLCS

new born ₱600

3 mos. Old ₱800

1 yr. old ₱1,200

1.5 yr. old ₱1,500

2 yrs. old ₱2,000

How much is the total gain from the change in FVLCS during the period?

a. 3,800

b. 4,200

c. 4,400

d. 4,800

Solution:

beg. (1,000 x 2) + (1,100 x 2) = 4,200

end. (2,000 x 2) + (1,500 x 2) + (800 x 2) = 8,600

total gain = (8,600 – 4,200) = 4,400

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