QUESTIONS:

1. Statement 1: A statement of financial position shows assets and liabilities similar to

commercial accounting. Assets are classified into unrestricted, temporarily restricted and
permanently restricted. F
Statement 2: Revenues, gains, losses and expenses are also classified into unrestricted,
temporarily restricted and permanently restricted in the statement of activities of a not for
profit organization. F

a. Only statement 1 is incorrect

b. Only statement 2 is incorrect
c. Both statements are correct
d. Both statements are incorrect

2. Statement 1: Temporarily restricted funds include resources that are available for use by
authority of the Board of Directors but designated for specified purposes. F
Statement 2: United Hope, a private not-for-profit voluntary health and welfare
organization, received the following contributions in 2013: P50,000 from donors who
stipulated that the money not be spent until 2014 and P10,000 from donors who
stipulated that the contributions be used for the acquisition of equipment, none of which
was acquired in 2013. Both contributions increased unrestricted net assets for the year
ending December 31, 2013. F

a. Only statement 1 is incorrect

b. Only statement 2 is incorrect
c. Both statements are correct
d. Both statements are incorrect

Use the following information for the next four questions:

GHI, a national government agency unit incurs an obligation for the purchase of garbage truck
for P450,000 on March 15, 2013. The dump truck is to be delivered on March 31, 2013 and the
motor form has agreed for a 30-day, interest free-delayed payment. i.e. payable on April 30,
2013. Assume a 12% tax on the purchase covered by TRA:

3. On March 15, 2013, the entry to be recorded by GHI will be: D

a. Equipment 450,000
Accounts payable 450,000
b. Equipment 450,000
Accounts payable 396,000
Subsidy income for NG 54,000
c. Equipment 450,000
Accounts payable 396,000
Due to BIR 54,000
d. Memorandum entry in RAOCO

4. On March 31, 2013, the entry to be recorded by GHI will be:

a. Equipment 450,000
Accounts payable 450,000
b. Equipment 450,000
Accounts payable 396,000
Subsidy income for NG 54,000
c. Equipment 450,000
Accounts payable 396,000
Due to BIR 54,000
d. Memorandum entry in RAOCO
5. On April 30, 2013, the entry to be recorded by GHI will be:

a. Accounts payable 450,000

Cash NT MDS 450,000
b. Accounts payable 396,000
Due to BIR 54,000
Cash NT MDS 450,000
c. Accounts payable 450,000
Cash NT MDS 396,000
Due to BIR 54,000
d. Accounts payable 396,000
Due to BIR 54,000
Cash NT MDS 396,000
Subsidy income from NG 54,000

6. The entry by GHI to record subsequent disposal of the withheld tax will be:

a. Due to BIR 54,000

Cash NT MDS 54,000
b. Due to BIR 54,000
Withholding tax payable 54,000
c. Due to BIR 54,000
Subsidy income from NG 54,000
d. Memorandum income from RAOFE

7. The statement of financial position (balance sheet) for Founders Library, a private
nonprofit organization, should report separate peso amounts for the librarys assets
according to which of the following classifications?

a. Unrestricted and Permanently restricted

b. Temporarily restricted and Unrestricted
c. Unrestricted, Temporarily restricted and Permanently restricted
d. None of the above

8. Statement 1: Temporarily restricted funds include resources that are available for use by
authority of the Board of Directors but designated for specified purposes. F
Statement 2: On November 30, 2013, Ms. X, an alumnus of ABC School, a private not-
for-profit high school, contributed P300,000, with the stipulation that the donation be
used for faculty travel expenses during 2014. During 2014, ABC spent all of the donation
in accordance with Ms. Xs wishes. For the year ended December 31, 2014, unrestricted
assets will decrease. F

a. Only statement 1 is incorrect

b. Only statement 2 is incorrect
c. Both statements are correct
d. Both statements are incorrect

9. A not-for-profit organization received a donation temporarily restricted as to use. The

donated amount was later spent in accordance with the restriction. In which category(ies)
of net assets should the related revenues and expenses be recognized?

a. Option A
b. Option B
 c. Option C
d. Option D

10. What is the appropriate entry to record cash overage in the viewpoint of the NG?

a. A cash overage is returned to the cashier and not recorded

b. A cash overage is debited to Cash and credited to Miscellaneous Income
c. A cash overage is not recorded and should be distributed to all government
employees equally
d. A cash overage is debited to Accounts receivable and credited to Cash

11. According to FASB 93, "Recognition of Depreciation by Not-For-Profit (NFP) Entities,"

NFP entities should recognize depreciation:

I. On all long-lived tangible assets.

II. On all long-lived intangible assets.

a. I only
b. II only
c. Both I and II
d. Neither I nor II

12. Chicago Museum, a private nonprofit organization, has both regular and term
endowments. On the museums statement of financial position, how should the net assets
of each type of endowment be reported?

Term Endowments Regular Endowments

a. Temporarily restricted Permanently restricted
b. Permanently restricted Permanently restricted
c. Unrestricted Temporarily restricted
d. Temporarily restricted Temporarily restricted

13. Mario is an employee of a national government agency. Mario was granted and received
cash advance of P30,000 for its travel. Mario liquidated the cash advance as follows (P):

Travel expenses 10,000

Training expenses 10,000
Representation expenses 8,000_
Total 28,000

The amount advanced had an un-liquidated balance of P2,000. What is the appropriate
entry to record the liquidation of the cash advance?

a. Travel expenses 10,000

Training expenses 10,000
Representation expenses 10,000
Cash Disbursing Officer 28,000

b. Travel expenses 10,000

Training expenses 10,000
Representation expenses 8,000
Due to officers and employees 2,000
Cash Disbursing Officer 30,000

c. Travel expenses 10,000

Training expenses 10,000
Representation expenses 8,000
Due to officers and employees 2,000
Cash National Treasury 30,000
 d. Travel expenses 10,000
Training expenses 10,000
Representation expenses 8,000
Cash Collecting Officer 2,000
Due to officers and employees 30,000

14. Statement 1: Under pure endowment fund, a principal may be expended on the basis of
passage of time. F
Statement 2: A storm broke glass windows in the building of New Life Meditators, a not-
for-profit religious organization. A member of congregation, a professional glazier,
replaced the windows at no charge. In New Life Meditators statement of activities, the
breakage and replacement of the windows should be reported as an increase in expenses
and in contributions revenue at the same time. T

a. Only statement 1 is incorrect

b. Only statement 2 is incorrect
c. Both statements are correct
d. Both statements are incorrect

15. Which of the following is an example of volunteer services received by a not-for-profit

entity that should be recognized as revenue?

I. Services requiring specialized skills, provided by individuals with those skills, that
otherwise would have to be purchased.

II. Services that create or enhance non-financial assets, which also require specialized
skills.

a. I only
b. II only
c. Either I or II
d. Neither I nor II

16. Statement 1: Contributed services are always recognized both as expenses and
contribution revenues if one of the conditions or requirements has been met. F
Statement 2: Philippine Museum, a private nonprofit organization, has both regular and
term endowments. On the museums statement of financial position, they are classified as
temporarily restricted and permanently restricted, respectively. F

a. Only statement 1 is incorrect

b. Only statement 2 is incorrect
c. Both statements are correct
d. Both statements are incorrect

17. W, a national government agency received cash allotment from its head agency totaling
P1,000,000. Of the total amount received, W distributed P100,000 to one of its operating
units as subsidy. What entry should be prepared to record the distribution of the subsidy
to Ws operating units?

a. Subsidy from national government 100,000

Cash National Treasury MDS 100,000

b. Subsidy to national government 100,000

Cash National Treasury MDS 100,000

c. Subsidy to Operating units 100,000

Cash National Treasury MDS 100,000

d. Subsidy to Operating unit 100,000

Cash from National Government 100,000
18. M is the cashier of DILT, a national government agency. During the month, she received
total collections from earnings amounting to P250,000 of which P150,000 was income
that should be deposited to the national government and the P100,000 was income
received from its own agency operation. The P150,000 was deposited to the national
treasury and the remaining balance was deposited to the agency bank account. What
should be the entry to record the deposit of the collections received by the collecting
officer?

a. Cash National Treasury 150,000

Cash in bank current account 100,000
Cash Collecting Officer 250,000

b. Due to National Treasury 150,000

Cash in bank current account 100,000
Cash Collecting Officer 250,000

c. Due to National Treasury 150,000

Cash in bank current account 100,000
Income 250,000

d. Cash National Treasury 150,000

Cash in bank current account 100,000
Income 250,000

19. Kerry College, a private not-for-profit college, received P25,000 from Ms. Mary Smith
on April 30, 2013. Ms. Smith stipulated that her contribution be used to support faculty
research during the fiscal year beginning on July 1, 2014. On July 15, 2014,
administrators of Kerry awarded research grants totaling P25,000 to several faculty in
accordance with the wishes of Ms. Smith. For the year ended June 30, 2014, Kerry
should report the P25,000 contribution as

a. Temporarily restricted revenues on the statement of activities

b. Unrestricted revenue on the statement of activities
c. Temporarily restricted deferred revenue on the statement of activities
d. An increase in fund balance on the statement of financial position

20. Statement 1: In quasi-endowment fund, the principal is to be maintained indefinitely in

revenue providing investments and are therefore permanently restricted. F
Statement 2: The statement of cash flows for a private not-for-profit hospital should
report cash flows according to operating, investing and financing activities. T

a. Only statement 1 is incorrect

b. Only statement 2 is incorrect
c. Both statements are correct
d. Both statements are incorrect

21. According to FASB 124, not-for-profit entities should report investments in the financial
statements at:
I. fair market value.
II. lower of cost or market.

a. I only
b. II only
c. Either I or II
d. Neither I nor II

22. Investment income for not-for-profit entities may include:

I. interest from debt investments.
 II. dividends from equity investments.
III. changes in the fair values of both debt and equity investments.

a. I only
b. I and II only
c. I and III only
d. I, II and III

23. Statement 1: On the statement of activities of a private not-for-profit performing arts

center, expenses should be deducted from restricted revenue only. F
Statement 2: A pledge represents income derived from other related activities, other than
service or contribution revenues of nonprofit organizations. F

a. Only statement 1 is incorrect

b. Only statement 2 is incorrect
c. Both statements are correct
d. Both statements are incorrect

Use the following information for the next two questions:

X, a national government agency, established a petty cash fund of P20,000. During the month,
P12,000 of the petty cash liquidated but was not replenished. The total amount liquidated
pertains to the following (P):

Gas and oil 8,000

Office supplies 4,000

Of the P4,000 office supplies, P1,500 is on hand at the end of the month.

24. How much should be reported as petty cash at the end of the month assuming that a
financial report is to be prepared?

a. P20,000 c. P8,000
b. P12,000 d. P1,500

25. What is the appropriate entry to record the liquidation of the petty cash fund?

a. Gas and oil 8,000

Office supplies expense 4,000
Petty cash fund 12,000

b. Gas and oil 4,000

Office supplies expense 4,000
Cash in bank 12,000

c. Gas and oil 8,000

Office supplies inventory 1,500
Office supplies expense 2,500
Cash in bank 12,000

d. Gas and oil 8,000

Office supplies inventory 1,500
Office supplies expense 2,500
Petty cash fund 12,000

26. A private university offers graduate assistantships to qualified students each year. In
exchange for the waiver of tuition, graduate assistants are required to assist faculty
members with research and other activities. Assume a graduate assistant received a
P4,000 tuition waiver for the current academic year. Based on these facts, the university
should record

a. Tuition revenues of P4,000 and expenditures of P4,000.

 b. Tuition revenues of P0 and expenditures of P0.
c. Tuition revenues of P4,000 and expenditures of P0.
d. Tuition revenues of P4,000 and a reduction of tuition revenues of P4,000.

27. Pera University, a private nonprofit university, had the following cash inflows during the
year ended June 30, 2013:

I. P500,000 from students for tuition

II. P300,000 from a donor who stipulated that the money be invested indefinitely
III. P100,000 from a donor who stipulated that the money be spent in accordance with
the wishes of Peras governing board

On Pera Universitys statement of cash flows for the year ended June 30, 2013, what
amount of these cash flows should be reported as operating activities?

a. P900,000 c. P500,000
b. P400,000 d. P600,000

28. Worldwide Foundation, a nonprofit private entity, received a cash donation for a specific
purpose in December of 2013 from Herold Smith. Worldwide Foundation is controlled
by Worldwide Helpers, a nonprofit entity that raises contributions for others. The
resources of Worldwide Foundation are used for the benefit of Worldwide Helpers. How
should Worldwide Foundation account for the cash contributions?

a. As an increase in contributions revenue

b. As an increase in liabilities
c. As either an increase in contributions revenue or liabilities
d. As neither an increase in contributions revenue nor liabilities

Use the following information for the next three questions:

Agency A is a National Government with an NCA from the DBM for MOOE amounting to
P5,500,000. Of the total amount, P4,675,000 was obligated and 80% was paid. The remaining
20% was recognized as accounts payable.

29. How much is the un-obligated balance that should be shown in the Registry of Allotment
and Obligation MOOE?

a. P825,000 c. P1,760,000
b. P935,000 d. P110,000

30. How much is the utilization rate of obligation?

a. 80% c. 85%
b. 20% d. 38%

31. What entry should be prepared to record the unutilized subsidy income from national
government?

a. Subsidy income from National Government 935,000

Cash National Treasury MDS 935,000

b. Subsidy income from National Government 825,000

Cash National Treasury MDS 825,000

c. Subsidy income from National Government 110,000

Cash National Treasury MDS 110,000

d. Subsidy income from National Government 825,000

Government Equity 825,000
32. Darling Hospital, a private NPO had the following cash receipts for the year ended
December 31, 2013 (P):

Patients revenue 300,000

Gift shop revenue 25,000
Interest revenue restricted by donor for
acquisition of equipment 50,000

The hospitals statement of cash flows for 2013 would report an increase in operating
activities of:

a. P325,000 c. P350,000
b. P375,000 d. P300,000

33. Rose Smith made a cash donation for a specific purpose in December 2013 to United
Ways, a private nonprofit organization that raises contribution for others. Assume United
Ways was (1) not granted variance power by Ms. Smith over her donation and (2) the
beneficiaries of the donation are not financially related to United Ways. How would
United Ways account for the donation?

a. As an increase in contributions revenue

b. As an increase in liabilities
c. As either an increase in contributions revenue or liabilities
d. As neither an increase in contributions revenue nor liabilities

34. Sea Lion Park, a private nonprofit zoological society, received contributions restricted for
research totaling P50,000 in 2013. None of the contributions were spent in 2013. In 2014,
P35,000 of the contributions were used to support the research activities of the society.
The net effect on the statement of activities for the year ended December 31, 2014, for
Sea Lion Park would be

a. P15,000 increase in temporarily restricted net assets

b. P35,000 increase in temporarily restricted net assets
c. P35,000 increase in unrestricted net assets
d. P35,000 decrease in temporarily restricted net assets

35. Statement 1: On the statement of financial position for a private not-for-profit performing
arts center, expenses should be deducted from unrestricted revenue only. F
Statement 2: If the not-for-profit hospital has a total service revenue of P750,000 from its
patients, P35,000 of which is classified as charity care, the patients revenue to be
reported as part of the organizations net income on its statement of activities was
P715,000. F

a. Only statement 1 is incorrect

b. Only statement 2 is incorrect
c. Both statements are correct
d. Both statements are incorrect

36. Statement 1: A nonprofit organization is organized for the benefit of the public as well as
of the benefit of an individual proprietor, or a group of partners or stockholders. F
Statement 2: Unrestricted fund includes all assets of a nonprofit organization that are
available for use as authorized by board of directors. T

a. Only statement 1 is incorrect

b. Only statement 2 is incorrect
c. Both statements are correct
d. Both statements are incorrect

37. A private not-for-profit university generally must depreciate all tangible fixed assets,
except:
 I. works of art and other historical treasures.
II. administration buildings.

a. I only
b. II only
c. Both I and II
d. Neither I nor II

38. Clara Hospital, a private not-for-profit hospital, earned P250,000 of gift shop revenues
and spent P50,000 on research during the year ended December 31, 2014. The P50,000
spent on research was part of a P75,000 donor who stipulated that the donation be used
for medical research. Assume none of the gift shop revenues were spent on 2011. For the
year ended December 31, 2014, what was the increase in unrestricted net assets from the
events occurring during 2014?

a. P300,000 c. P250,000
b. P200,000 d. P275,000

39. Which of the following is not a closing entry?

a. Subsidy income from National Government 350,000

Cash National Treasury MDS 350,000

b. Income and expense summary 645,000

Salaries and wages regular 645,000

c. Government Equity 2,000,000

Public Infrastructures 2,000,000

d. Allowance for bad debts 100,000

Income and Exp. Summary 100,000

40. Which of the following is most likely recognition of stale check?

a. Cash collecting officer 100,000

Electricity expense 100,000

b. Cash National Treasury MDS 100,000

Electricity expense 100,000

c. Cash disbursing officer 100,000

Telephone expense landline 100,000

d. Cash in bank current account 100,000

Miscellaneous income 100,000

41. Which of the following transactions of a private not-for-profit voluntary health and
welfare organization would have a net increase in temporarily restricted net assets on the
statement of activities for the year ended June 30, 2013?

I. Received a contribution of P10,000 from a donor on May 15, 2013, who stipulated
that the donation not be spent until August of 2013.
II. Spent P25,000 for fund raising on June 20, 2013. The amount expended came from a
P25,000 on March 12, 2013. The donor stipulated that the contribution be used for
fund-raising activities.

a. Both I and II c. I only

b. Neither I nor II d. II only
42. A private college received an offer from a CPA who is an alumnus to teach a one-
semester advanced accounting course at no cost. FASB 116 prescribes that this
contribution of services:

a. Need only be disclosed in the footnotes to the financial statements

b. Be recorded as an asset with an equivalent amount recorded in the unrestricted fund
balance
c. Be recorded as a revenue with an equivalent amount recorded as an expenditure
d. Need not be recorded if the service is for a period less than one academic year

43. What is the appropriate entry to record receipt of NCA from the DBM?

a. Cash in bank current account 5,000,000

Subsidy income from National Govt. 5,000,000

b. Cash National Treasury MDS 5,000,000

Government equity 5,000,000

c. Cash National Treasury MDS 5,000,000

Subsidy income from National Govt. 5,000,000

d. Subsidy income from National Govt. 5,000,000

Government equity 5,000,000

44. What is the appropriate entry to record issuance of check for payment of payroll with net
amount of P600,000 received by the disbursing officer?

a. Salaries and wages regular 680,000

Due to BIR 45,000
Due to GSIS 30,000
Due to Philhealth 5,000
Due to officers and employees 600,000

b. Salaries and wages regular 680,000

Due to BIR 45,000
Due to GSIS 30,000
Due to Philhealth 5,000
Cash National Treasury MDS 600,000

c. Cash Disbursing Officer 600,000

Cash National Treasury MDS 600,000

d. Cash Disbursing Officer 600,000

Due to officers and employees 600,000

45. Statement 1: The concept of net income can be a primary objective of organizing a
nonprofit organization. F
Statement 2: In the statement of financial position, the balances of the Contractual
Adjustments account and the Expenditures Student Aid account are to be deducted
from the total service revenues to compute for the net service revenue for the month. F

a. Only statement 1 incorrect

b. Only statement 2 is incorrect
c. Both statements are correct
d. Both statements are incorrect
46. In accordance with FASB 117, contributions from donors which are to be permanently
invested should be disclosed on the statement of activities of a private university as an
increase in:

a. Permanently restricted net assets

b. Permanently restricted fund balance
c. Endowment fund balance
d. Deferred revenues

47. For the year ended June 30, 2013, a private college received contributions from alumni
which were restricted for faculty research stipends to be awarded during the next fiscal
year. For the year ended June 30, 2013, these contributions should be disclosed on the
statement of activities of the private college as an increase in:

a. The fund balance of the restricted current fund

b. Temporarily restricted net assets
c. Deferred revenues
d. Temporarily restricted fund balance

48. A private, not-for-profit university should prepare which of the following financial
statements?

a. I, II, and III

b. II, III, and IV
c. I, II, and IV
d. II, III, and V

49. The process of analyzing, classifying, summarizing and communicating all transactions
involving the receipt and disposition of government funds and property and interpreting
the results thereof is

a. Government accounting c. Government accounting

b. Budgetary accounting d. Obligation accounting

50. One of the basic features in government accounting is

a. The accounting of money collected is not separate and independent from the
accounting of the use or disbursement of said money collected
b. As to the basis of accounting, it is either cash or accrual basis not a combination of
both
c. Budgetary and real accounts are used and estimates are recorded and accounted
for
d. Depreciation of fixed assets is considered an overhead expense
51. A feature of government accounting that provides for the ceiling or maximum amount an
agency can spend or incur in the performance of its functions.

a. Budgeting accounting c. Obligation accounting

b. Responsibility accounting d. Fund accounting

52. A major difference between government and commercial accounting is that a

governmental unit should

a. Always establish and maintain complete self-balancing account for each fund
b. Use only the cash basis of accounting
c. Not record depreciation expense in any of its funds
d. Use only the modified accrual basis of accounting
53. Catherine College, a private nonprofit college, received the following contributions
during 2013:

I. P5,000,000 from alumni for construction of a new wing on the science building to
be constructed in 2013
II. P1,000,000 from a donor who stipulated that the contribution be invested
indefinitely and that the earnings be used for scholarships. As of December 31,
2013, earnings from investments amounted to P50,000

For the year ended December 31, 2013, what amount of these contributions should be
reported as temporarily restricted revenues on the statement of activities?

a. P50,000 c. P5,000,000
b. P5,050,000 d. P6,050,000

54. For Guiding Light, a nongovernmental nonprofit religious organization, net assets that
can be expended in accordance with the wishes of the governing board of the
organization should be reported as

I. Unrestricted
II. Temporarily restricted
III. Permanently restricted

a. I only c. I, II and III

b. Both I and II d. Either I or II

55. Statement 1: Program activities are goods and services provided to beneficiaries or
customers that fulfill the purpose of the organization. F
Statement 2: An endowment fund is used to account for assets held by a nonprofit
organization as a custodian. The assets are disbursed only as instructed by their owner. F

a. Only statement 1 is incorrect

b. Only statement 2 is incorrect
c. Both statements are correct
d. Both statements are incorrect

56. Formal authorization issued by the Department of Budget and Management to a

government agency to incur obligations up to a specific amount.

a. Cash disbursement ceiling c. Supplementary budget

b. Allotment advice d. Appropriation

57. An authorization from a legislative body to make payments out of the National Treasury
under specified conditions and for specific purposes

a. Cash disbursement ceiling c. Appropriations

b. Allotment d. Budget

58. The Jackson Foundation, a not-for-profit private organization, had the following cash
contribution and expenditures for 2013:

Unrestricted cash contributions of P500,000

Cash contributions of P200,000 restricted by the donor to the acquisition of property
Cash expenditures of P200,000 to acquire property with the donation in the above item

Jacksons statement of cash flows should include which of the following amounts?

Operating Activities Investing Activities Financing Activities

a) P700,000 P0 P0
b) P500,000 P0 P0
c) P500,000 P(200,000) P200,000
 d) P0 P500,000 P200,000

59. As specifically provided for in the New Constitution, no money shall be paid out of the
National Treasury except in pursuant of a

a. Budget
b. Presidents directive or letter of instruction (LOI)
c. Fund
d. Appropriation
e. Cash allotment

60. United Hope, a private not-for-profit voluntary health and welfare organization, received
the following contributions in 2013:

I. P500 from donors who stipulated that the money not be spent until 2011
II. P1,000 from donors who stipulated that the contributions be used for the
acquisition of equipment, none of which was acquired in 2013

Which of the above events increased temporarily restricted net assets for the year ending
December 31, 2013?

a. I only c. II only
b. Both I and II d. Neither I nor II

61. Unrestricted gifts and endowment income of a private university are reported as

a. increases in the unrestricted current fund balance on the statement of changes in fund
balances
b. unrestricted revenues on the statement of current funds revenues, expenditures, and
other changes
c. unrestricted revenues on the statement of activities
d. increases in the unrestricted current fund balance on the statement of activities

62. A not-for-profit private college in Virginia created a separate foundation responsible for
obtaining financial support from alumni and others. Foundation assets are used for the
benefit of the college. Donations made to the foundation and subsequently transferred to
the college should be:

a. recognized as revenues by the foundation when received, and as revenues of the

college when transferred
b. recognized as revenues by the foundation when received and as expenses by the
foundation when transferred
c. recognized both as a change in its interest in the foundation and as revenues by the
college when the donation is received by the foundation
d. recognized as an increase in net assets of the foundation and as revenues of the college
when the donation is received by the college

63. This is a sum of money or other government resources set aside for the purpose of
carrying out specific activities or attaining certain objectives in accordance with specific
regulations, restrictions, or limitations, and constitutes an independent fiscal and
accounting entity.

a. Cash disbursement ceiling c. Appropriations

b. Fund d. Budget

64. The agency responsible with the duty to keep the general accounts of the Government,
promulgate accounting rules and regulations, and to submit to the President and to
Congress an annual financial report of the Government including its subdivisions

a. Department of Finance
b. Department of Budget and Management
 c. Bureau of Treasury
d. Commission on Audit

65. The term fund as used in government or fund accounting usually denotes a (an)

a. Sum of money designated for a special purpose

b. Liability to other governmental units
c. Fiscal and accounting entity having a set of self-balancing accounts
d. Appropriation authorized by the legislature for use of an agency, bureau or office

66. SFAS 117, Financial Statements of Not-for-Profit Organizations, focuses on

a. Basic information for the organization as a whole

b. Standardization of funds nomenclature
c. Inherent differences of not-for-profit organizations that impact reporting presentations
d. Distinctions between current fund and noncurrent fund presentations

67. On December 30, 2013, Leigh Museum, a not-for-profit organization, received a

P7,000,000 donation of Day Co. shares with donor stipulated restrictions as follows:

Shares valued at P5,000,000 are to be sold, with the proceeds used to erect a public
viewing building. Shares valued at P2,000,000 are to be retained, with the dividends used
to support current operations. As a consequence of the receipt of Day shares, how much
should Leigh report as temporarily restricted net assets on its 2013 statement of financial
position (balance sheet)?

a. P0 c. P5,000,000
b. P2,000,000 d. P7,000,000

68. Which agency of the government is in charge of the accounting receipt of the proceeds of
foreign and domestic loans as well as the servicing thereof?

a. Bureau of Treasury c. Office of the Budget and Management

b. Central Bank of the Philippines d. None of the above

69. On the statement of operations prepared for a private, not-for-profit hospital, patient
service revenue earned during the year is reported net of amounts for which of the
following items?

I. Contractual adjustments
II. Bad debts expense

a. I only
b. II only
c. I and II
d. Neither I nor II

70. A private, not-for-profit geographic society received cash contributions which were
restricted by the donors for the acquisition of fixed assets. In which section of the
statement of cash flows would these cash contributions be reported?

a. Financing activities
b. Investing activities
c. Operating activities
d. Capital and related financing activities

71. One of the following is not considered government income:

a. Proceeds from loans and borrowings.

b. Government buildings.
c. Grants and aids received from foreign governments.
 d. Taxes

72. In government accounting, it is not correct to

a. Regularly take up depreciation

b. Adopt a combination of the cash basis and accrual basis
c. Correct a debit error by a debit entry but in the negative
d. Emphasize on correctness, so reports are certified correct

73. When reporting for governmental units, what type of costs should be presented in the
financial statements

a. Historical cost c. Current appraisal

b. Costs adjusted for price level changes d. Replacement cost

74. If the Pel Museum, a not-for-profit organization, received a contribution of historical

artifacts, it need not recognize the contribution if the artifacts are to be sold and the
proceeds used to

a. Support general museum activities

b. Acquire other items for collections
c. Repair existing collections
d. Purchase buildings to house collection

75. Bridger Hospital, which is operated by a religious organization, provides charity care for
the indigent living in the region served by the hospital. How should Bridger report the
amount of its charity care on its financial statements?

a. In the notes to the financial statements only

b. As unrestricted revenues on the statement of operations
c. As net patient service revenue and as an expense, equal to the net patient service
revenue, on the statement of operations
d. As temporarily restricted revenue on the statement of operations

76. When reporting for governmental units, what type of costs should be presented in the
financial statements?

a. Historical
b. Historical adjusted for price-level changes
c. Current appraisal
d. Historical and current presented in two separate columns

77. The governing board of Samaritan Hospital, which is operated by a religious

organization, designated $500,000 of cash for future expansion of the hospital. On the
hospital's balance sheet, the cash designated for future plant expansion would be
disclosed in which of the following classes of net assets?

a. Temporarily restricted net assets

b. Unrestricted net assets
c. Plant replacement and expansion
d. Board designated net assets

78. Michael Hospital, a nonprofit hospital affiliated with a private university reported the
following information for the year ended December 31, 2013:

Cash contributions received from donors for capital addition to be acquired in 2015,
P150,000
Proceeds restricted by donors for capital acquisitions, P75,000
Dividend revenue not restricted by donors or by law, P25,000
 What amount should be reported as other revenues and gains on the hospitals
statement of operations?

a. P25,000 c. P100,000
b. P75,000 d. P250,000

79. A private, not-for-profit hospital uses a fund structure which includes a general fund and
donor restricted funds. The hospital's revenues from nursing programs and gift shops
should be accounted for in the:

a. specific purpose fund

b. restricted current fund
c. general fund
d. time-restricted fund

80. A private, not-for-profit hospital uses a fund structure which includes a general fund and
donor restricted funds. Contributions received from donors for research to be conducted
by the hospital should be accounted for in the:

a. specific purpose fund

b. time-restricted fund
c. general fund
d. restricted current fund