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Revenue And Fund Management Exam Questions With
Accurate Answers
What is revenue in the context of government entities? - accurate answers-A gross inflow of economic benefits or service potential during the reporting period that results in an increase in equity, excluding contributions from owners. What do receipts refer to in government accounting? - accurate answers-Actual cash collections from all sources during a period. What is the fundamental principle regarding the remittance of revenue for government entities? - accurate answers-All revenue must be remitted to the National Treasury and included in the General Fund unless specified otherwise by law. How should money and property received by a public officer be accounted for? - accurate answers-They shall be accounted for as government funds and property unless specified otherwise by law. What is the protocol for recording receipts in Special, Fiduciary, or Trust Funds? - accurate answers-Receipts shall only be recorded as revenue in these funds when authorized by law. What must a collecting officer do upon collecting a payment? - accurate answers- Immediately issue an official receipt (OR). What is the requirement for issuing official receipts? - accurate answers-Pre- numbered official receipts must be issued in strict numerical sequence, and duplicate copies must be exact copies of the original. Can temporary receipts be used to acknowledge the receipt of public funds? - accurate answers-No, temporary receipts shall never be used for this purpose. What forms of payment can a collecting officer accept for government payments?
- accurate answers-Payments can be accepted in the form of checks, with proper endorsement and identification of the payee. What is a General Fund in government accounting? - accurate answers-A fund available for any purpose other than those designated for other funds.
What is a Special Fund? - accurate answers-A fund designated for a specific purpose. What is a Trust Fund (fiduciary fund)? - accurate answers-A fund held by a government agency or public officer acting as a trustee for the fulfillment of a condition. What constitutes a Revenue Fund? - accurate answers-All funds derived from the income of any government agency available for appropriation or expenditure according to the law. What is a Depository Fund? - accurate answers-A fund held in an authorized depository bank, where the recipient agency retains control for lawful purposes. What is a Special Account in the General Fund (SAGF)? - accurate answers-An account established to facilitate the funding of priority activities of the government. What are Special Purpose Funds (SPFs)? - accurate answers-Funds allocated by the President for special programs and projects. What are the sources of the Special Account in the General Fund (SAGF)? - accurate answers-Sourced from specific fees, grants, donations, and other legally identified sources. What happens to income and collections for Special and Fiduciary Funds? - accurate answers-They shall be remitted to the Treasury and treated as SAGF. What is the automatic appropriation status of SAGF? - accurate answers-SAGF is considered automatically appropriated for authorized purposes unless the General Appropriations Act (GAA) states otherwise. Who must approve the release of SAGF to government agencies? - accurate answers-The release is subject to the approval of the president. What must be indicated on receipts of government funds? - accurate answers-The date of receipt, from whom the funds were received, and what account the funds were received into.
What indicates a non-exchange transaction in terms of asset value? - accurate answers-If the asset received is greater than the asset given up, it is classified as a non-exchange transaction. What is an example of a non-exchange transaction involving a donated vehicle? - accurate answers-Agency A Region Office XI received a donated vehicle valued at P2,500,000, incurring additional costs of P50,000 for transfer. What happens if the asset received is less than the asset given up? - accurate answers-The asset is considered impaired, subject to impairment loss, and should be disposed of. What are the sources of revenue from exchange transactions? - accurate answers- Sources include sale of goods, service income (e.g., fees), and business income (e.g., school fees, rent). What are examples of service income in exchange transactions? - accurate answers-Service income examples include permit fees, registration fees, franchising fees, and legal fees. What types of income arise from the use of assets in exchange transactions? - accurate answers-Interest income, royalties, and dividends are examples of income from the use of assets. What conditions must be met for revenue from the sale of goods to be recognized?
- accurate answers-Conditions include transfer of ownership risks, no managerial involvement, probable economic benefits, and reliable measurement of revenue and costs. How is revenue from the rendering of services recognized? - accurate answers- Revenue from services is recognized on a straight-line basis over the period the services are rendered. What conditions must be satisfied for the sale of goods to recognize revenue? - accurate answers-1. Significant risks and rewards of ownership are transferred to the buyer. 2. The entity does not retain continuing managerial involvement or effective control over the goods sold. 3. It is probable that economic benefits will flow to the entity. 4. Revenue can be measured reliably. 5. Costs relating to the transaction can be measured reliably.
What are the conditions for using the percentage of completion method for recognizing revenue from services? - accurate answers-1. The stage of completion can be measured reliably. 2. It is probable that economic benefits will flow to the entity. 3. Revenue can be measured reliably. 4. Costs relating to the transaction can be measured reliably. When is revenue recognized if the outcome of a service transaction cannot be estimated reliably? - accurate answers-Revenue is recognized only to the extent of the expenses recognized that are recoverable. How is interest revenue recognized? - accurate answers-Interest is recognized on a time proportion basis that takes into account the effective yield of the asset. When are royalties recognized as revenue? - accurate answers-Royalties are recognized as they are earned in accordance with the substance of the relevant agreement. When are dividends recognized as revenue? - accurate answers-Dividends are recognized when the entity's right to receive payment is established. When does a government entity normally recognize revenue from service income? - accurate answers-Revenue is recognized when the services are rendered, unless impractical, in which case it is recognized when fees are collected. How is revenue from business income recognized? - accurate answers-Revenue is recognized when fees are billed, or if not practicable, when fees are collected. How is revenue from exchange transactions measured? - accurate answers- Revenue is measured at the fair value of the consideration received or receivable, taking into account any trade discounts and volume rebates. What is fair value in the context of revenue recognition? - accurate answers-Fair value is the amount for which the asset could be exchanged, or liability settled, between knowledgeable, willing parties in an arm's length transaction. How is revenue recognized when consideration is received in advance? - accurate answers-It is initially recognized as a liability and subsequently recognized as revenue only when the revenue recognition criteria are met.
How are taxes defined in the context of non-exchange transactions? - accurate answers-Compulsory payments intended to provide revenue to the government, excluding fines and penalties. What are fines and penalties? - accurate answers-Monetary sanctions received as a consequence of breaching laws. What are gifts, donations, and goods/services in-kind? - accurate answers- Voluntary transfers of assets and services made to another entity, normally free from stipulations. When is revenue from non-exchange transactions recognized? - accurate answers-On a cash basis until a reliable measurement model is developed; recognized when collected or legally collectible. How is tax revenue recognized? - accurate answers-At the gross amount, not reduced for expenses paid through the tax system. What are tax expenditures? - accurate answers-Preferential provisions of tax law providing certain taxpayers with concessions not available to others, considered forgone revenue. What is the taxable event for income tax? - accurate answers-Earning of taxable income. What triggers the taxable event for value-added tax? - accurate answers- Undertaking a taxable activity. What is the taxable event for goods and service tax? - accurate answers-Purchase or sale of taxable goods or services. What triggers custom duty? - accurate answers-Movement of dutiable goods and services across the customs boundary. What is the taxable event for death duty? - accurate answers-Death of the owner of the taxable property. What triggers property tax? - accurate answers-Passage of the time period for which the tax is levied.
What are transfers in the context of non-exchange transactions? - accurate answers-Inflows of future economic benefits or service potential from non- exchange transactions, excluding taxes. How are fines and penalties recognized as revenue? - accurate answers- Recognized as income in the year collected or when the receivable meets recognition criteria. When are gifts, donations, and goods in-kind recognized as revenue? - accurate answers-When it is probable that future economic benefits will flow; unconditional ones are recognized immediately. How are conditional gifts and donations treated in revenue recognition? - accurate answers-Initially recognized as a liability and recognized as revenue only when conditions are satisfied. Why are service in-kind not recognized as revenue? - accurate answers-Due to uncertainties affecting the entity's ability to control and measure them at fair value. How are assets from non-exchange transactions measured? - accurate answers-At the acquisition date fair value. How are liabilities from non-exchange transactions measured? - accurate answers-At present value when the effect of time value of money is material. How is revenue from non-exchange transactions measured? - accurate answers- At the amount of increase in net assets; if initially recognized as a liability, subsequent reductions are recognized as revenue. What happens when a lender cancels the debt of a government entity? - accurate answers-The debtor recognizes revenue equal to the carrying amount of the debt forgiven. How is cancelled debt treated when a controlling entity cancels the debt of a wholly owned controlled entity? - accurate answers-Treated as a contribution from owners, not as revenue.
What is recognized when an amount already recognized as revenue becomes uncollectible? - accurate answers-It is recognized as an expense (impairment loss) rather than an adjustment to the original revenue. What factors should entities evaluate to assess the collectability of accounts receivable? - accurate answers-Historical bad debts, customer creditworthiness, current economic trends, and changes in payment activity. What is the journal entry for recognizing an impairment loss of P237,633? - accurate answers-Impairment Loss 237,633; Allowance for Impairment Loss - AR 237,633. What is the updated balance for Allowance for Impairment Loss as of 12.31.23? - accurate answers-P924,142.20. What is the net realizable value of accounts receivable as of 12.31.23? - accurate answers-P775,483.46. What is the journal entry to recognize receipt of subsidy from the National Government? - accurate answers-Cash-Collecting Officers 100,000; Subsidy from Other NGAs 60,000; Assistance from LGUs 30,000; Assistance from GOCCs 10,000. What documentation is required for the receipt of subsidy or assistance from other government agencies? - accurate answers-An official receipt (OR) must be issued by the collecting officer. What is the significance of Other Deferred Credits in the context of grants? - accurate answers-They represent liabilities until the conditions of the grant are satisfied. When is revenue recognized from a grant with condition? - accurate answers- Only when the condition is satisfied. What is the role of the Department of Public Works and Highways in the grant example provided? - accurate answers-It is the implementing entity for the construction of the flood control system.
What is recognized when remitting collections to BTr from a Trust account? - accurate answers-Cash-Treasury/Agency Deposit, Trust is recognized for remittance of collections. Why does the agency use a Trust account for Cash-Treasury/Agency Deposit, Trust? - accurate answers-The funds received are for a specific purpose and recorded under Trust Fund (Code 7). What is the entry upon receipt of NCA for the release of deposited cash under Trust? - accurate answers-Cash-MDS, Trust is debited and Cash-Treasury/Agency Deposit, Trust is credited. What is recorded when excess cash advance is received from officers and employees? - accurate answers-Cash-Collecting Officer is debited and Advances to Officers and Employees is credited. What is the entry to remit excess cash advance to BTr? - accurate answers-Cash- Treasury/Agency Deposit, Regular is debited and Cash-Collecting Officer is credited. What is the closing entry for excess cash advance? - accurate answers- Accumulated Surplus is debited and Cash-Treasury/Agency Deposit, Regular is credited. What is recorded upon receipt of a refund of overpayment of expenses? - accurate answers-Cash-Collecting Officer is debited and respective expense accounts are credited. What is the entry to remit overpayment to BTr? - accurate answers-Cash- Treasury/Agency Deposit, Regular is debited and Cash-Collecting Officer is credited. What is the closing entry for overpayment of expenses? - accurate answers- Accumulated Surplus is debited and Cash-Treasury/Agency Deposit, Regular is credited. What is the entry for receipt of a performance bond? - accurate answers-Cash- Collecting Officer is debited and Guaranty/Security Deposit Payable is credited.
What is the significance of using a Trust account for remittances? - accurate answers-It ensures that funds received for specific purposes are properly accounted for. What is the purpose of the Cash-Collecting Officer account? - accurate answers-It records cash transactions made by the collecting officer. What happens to the Cash-Treasury/Agency Deposit, Trust account upon remittance? - accurate answers-It is credited to reflect the outflow of funds to BTr.
