NATIONAL COLLEGE OF BUSINESS AND ARTS

Cubao-Fairview-Taytay
SECOND SEMESTER SY 2015-2016
FINAL DEPARTMENTAL EXAMINATIONS 2 HRS
ACCOUNTING 13 – 07 GOVERNMENT ACCTG & ACCTG FOR NGO

INSTRUCTIONS: Select the correct answer for each of the following questions. Mark only one answer
for each item by shading the corresponding letter of your choice on the answer sheet provided.
STRICTLY NO ERASURES ALLOWED. Use Pencil No. 2 only.

1. In hospital accounting, restricted funds are

A. Not available unless the Board of Directors remove the restrictions.
B. Restricted as to use only for board-designated purposes.
C. Not available for current operating use; however, the income generated by the funds is
available for current operating use.
D. Restricted as to use by the donor, grantor, or other source of the sources.

2. Which of the following transactions or events would cause increase in unrestricted net asset for
the year ended December 31, 2016?
I. A voluntary health and welfare organization spent a restricted donation which was received
in 2012. In accordance with the donor’s wishes, the donation was spend on public health
education during 2016.
II. During 2016, a private, not-for-profit college earned dividend and interest on term
endowments. Donor’s placed no restriction on the earnings of term endowments. The
governing board and the college intends to use this investment income to fund
undergraduate scholarships for 2014.
A. II only B. I only C. Neither I nor II D. Both I and II

3. St. Luke’s Hospital Hospital’s patient service revenues for services provided in 2016, at
established rates, amounted to P 8,000,000 on the accrual basis. For internal reporting, St. Luke’s
Hospital uses the discharge method. Under this method, patient service revenues are recognized
only when patients are discharged, with no recognition given to revenues accruing for services to
patients not yet discharged. Patient service revenues at established rates using the discharge
method amounted to P 7,000,000 for 2016. According to generally accepted accounting principles.

St. Luke’s Hospital should report patient service revenues for 2016 of:
A. Either P 8,000 or P 7,000,000 at the option of the hospital
B. P 8,000,000
C. P 7,500,000
D. P 7,000,000

4. 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.

5. In addition to the statement of changes in changes in net assets, which of the following financial
statements should not-for-profit hospitals prepare?
A. Balance sheet and income statement
B. Balance sheet, income statement, and statement of changes in financial position.
C. Balance sheet, statement of operations, and statement of cash flows.
D. Statement of funds, statement of operations, and statement of cash flows.
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6. The statement of financial position (balance sheet) for Cecilia Library should report separate peso
amounts for the library’s net assets according to which of the following classifications?
A. Unrestricted and permanently restricted.
B. Temporarily restricted and permanently restricted
C. Unrestricted and temporarily restricted
D. Unrestricted, temporarily restricted, and permanently restricted

7. Land valued at P 400,000 and subject to a P 150,000 mortgage was donated to Makati Medical
Hospital without restriction as to use. Which of the following entries should Makati Medical make to
record this donation?
A. Land 400,000
Mortgage payable 150,000
Endowment fund balance 250,000
B. Land 400,000
Debt fund balance 150,000
Contributions 250,000
C. Land 400,000
Debut fund balance 150,000
Endowment fund balance 250,000
D. Land 400,000
Mortgage payable 150,000
Unrestricted fund balance 250,000

8. The following receipts were among those recorded by St. Dominic College during 2016:
Unrestricted gifts P 500,000
Restricted current funds (expended for current operating purposes) 200,000
Restricted current funds (not yet expended) 100,000

The amount that should be included as

Revenues Current Fund Revenue
A. P 800,000 P 700,000
B. 700,000 800,000
C. 600,000 600,000
D. 500,000 500,000

9. Manila Adventist Hospital’s accounting records disclosed the following information:

Net resources invested in plant assets P 10,000,000
Board designated funds 2,000,000
What amount should be included as part of unrestricted funds?
A. P 12,000 B. P 10,000 C. P 2,000,000 D. P 0

10. Bernal Hospital fiscal year ends May 31, 2016. In March 2016, a P 300,000 unrestricted bequest
and a P 500,000 pure endowment grant were received. In April 2016, a bank notified Bernal
Hospital that the bank received P 10,000 to held in permanent trust by the bank. Bernal Hospital is
to receive the income from this donation.

Bernal Hospital should record the P 300,000 unrestricted bequest as

A. Non-operating revenue
B. Other operating revenue
C. A direct credit to the fund balance
D. A credit to operating expenses

11. Unrestricted current funds of a private university designated by the governing board for a specific
future purpose should be reported as part of:
A. unrestricted net assets. C. board-restricted net assets
B. temporarily restricted net assets. D. term endowments.

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12. On January 2, 2016, a graduate of Arellano established a permanent trust fund and appointed
Land Bank as the trustee. The income from the trust is to be paid to Arellano and used only the
school of education to support student scholarships.

What entry is required on Arellano’s books to record the receipt of cash from the interest on the
trust fund?
A. Debit cash and credit restricted current funds deferred revenue
B. Debit cash and credit restricted endowment revenue
C. Debit cash and credit endowment fund balance
D. Debit cash and credit unrestricted endowment revenue

13. The following information was available from St. Therese University’s accounting records for its
current funds for the year ended March 31, 2012:
Restricted gifts received
Expended P 100,000
Not expended 300,000
Unrestricted gifts received
Expended 600,000
Not expended 75,000

What amount should be included in current funds revenues for the year ended March 31, 2012?
A. P 600,000 B. P 700,000 C. P 775,000 D. P 1,000,000

14. The following funds were among those held by UDMC University of December 31, 2012:

Principal specified by the donor as non-expendable P 500,000

Principal expendable after the year 2012 300,000
Principal designated from current funds 100,000

What amount should UDMC University classify as regular endownment funds? (or permanently
restricted endowments)
A. P 100,000 B. P 300,000 C. P 500,000 D. P 900,000

15. St. Scholastica’s College, a private not-for-profit college, received the following contributions
during 2015:

I. P 5,000,000 from alumni for construction of a new wing on the science on the science building
to be constructed in 2016.
II. P 1,000,000 from a donor who stipulated that the contribution be invested indefinitely and that
the earnings be used for scholarships. As of December 31, 2015, earnings from investments
amounted to P 50,000.

For the year ended December 31, 2015, what amount of these contributions should be reported as
temporarily restricted revenues on the statement of activities?
A. P 50,000 B. P 5,050,000 C. P 5,000,000 D. P 6,050,000

16. Good Shepherd, a voluntary health and welfare organization, received a cash donation of
P 500,000 from Mr. Charles on November 15, 2016. Mr. Charles requested that his donation be
used to acquire equipment for the organization. Good Shepherd used the donation to acquire
equipment costing P 500,000 in January of 2016. For the year ended December 31, 2016, Good
Shepherd should report the P 500,000 contribution on its
A. Statement of activities as unrestricted revenue
B. Statement of financial position as temporarily restricted deferred revenue
C. Statement of financial position as unrestricted deferred revenue.
D. Statement of activities as temporarily restricted revenue.

17. A statement of functional expenses is required for which one of the following private nonprofit
organizations?
A. Colleges
B. Hospitals
C. Voluntary health and welfare organizations
D. Performing arts organizations
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18. In 2016, the Board of Trustees of Ayala Foundation, designated P 100,000 from its current funds
for college scholarships. Also in 2016, the foundation received a bequest of P 200,000 from an
estate of a benefactor who specified that the bequest was to be used for hiring teachers to tutor
handicapped students.

What amount should be accounted for as current restricted funds?

A. P 0 B. P 100,000 C. P 200,000 D. P 300,000

19. On January 2, 2016, a nonprofit botanical society received a gift of an exhaustible fixed asset with
an estimated useful life of 10 years and no salvage value. The donor’s cost of this asset was
P 20,000, units fair market value at the date of the gift was P 30,000.

What amount of depreciation of this asset should the society recognize in its 2016 financial
statements?
A. P 3,000 B. P 2,500 C. P 2,000 D. P 0

20. Gota de Leche, a community foundation, incurred P 5,000 in management and general expenses
during 2012. In Gota de Leche statement of operation and changes in net assets for the year
ended December 2012, the P 5,000 should be reported as
A. A contra account offsetting revenue and support
B. Part of program services
C. Part of supporting services
D. A direct reduction of fund balance

21. The following expenditures were made by Green Community, a society for the protection of the
environment.
Printing of the annual report P 12,000
Unsolicited merchandise sent to encourage contributions 25,000
Cost of an audit performed by a CPA firm 3,000

What amount should be classified as fund-raising costs in the society’s activity statement?
A. P 37,000 B. P 28,000 C. P 25,000 D. P 0

22. Samahang Ilocano, a fraternal organization, should prepare a statement of financial position and
which of the following financial statements?
I. Statement of activities
II. Statement of changes in fund balances
III. Statement of each flows
A. I, II and III C. II and III
B. III only D. Both I and III

23. De Villa family lost its home in a fire. On December 25, 2012, a philanthropist sent money to the
Ramos Society, a not-for-profit organization, to purchase furniture for De Villa family. During
January 2012, Ramos Society purchased this furniture for De Villa family.

How should Ramos Society report the receipt of the money in its 2012 financial statements?
A. As an unrestricted contribution
B. As a temporarily restricted contribution
C. As a permanently restricted contribution
D. As a liability

24. If the Manila Museum, a not-for-profit organization, received a contribution of historical artifacts, it
need not recognized 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 collections

25. A storm broke glass windows in the building of Mediators, a not-for-profit religious organization. A
member of Mediators congregation, a professional glazier, replaced the windows at no charge. In
Mediators statement of activities, the breakage and replacement of the windows should
A. Not be reported
B. Be reported by note disclosure only
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C. Be reported as an increase in both expenses and contributions.

D. Be reported as an increase in both net assets and contributions.

26. On December 5, 2016, Bar Heating and Air Conditioning Service repaired the heating system in
the building occupied by Pahiyas, a voluntary health and welfare organization. An invoice for
P 1,500 was received by Pahiyas for the repairs on December 15, 2016. On December 30, 2016,
Bar notified Pahiyas that the invoice was cancelled and that the repairs were being donated
without charge. For the year ended December 31, how should Pahiyas report these contributed
services?
A. Only in the notes to the financial statements
B. No disclosure is required either in the financial statements or in the notes.
C. As an increase in unrestricted revenues and as an increase in expenses on the statements of
activities
D. As an increase in temporarily restricted net assets on the statement of activities

27. Agency RRV received the following allotment for year 2014:
Capital outlay (CO) P50,000,000
Maintenance and Other Operating Expenses (MOOE) 10,000,000
Personal Services (PS) 5,000,000
Financial Expenses (FE) 100,000
P65,100,000
The entry to record the above allotment would be:
A. No entry
B. Memorandum entry in Registry of Allotments and Obligations
C. National Clearing Account 65,100,000
Appropriations Alloted 65,100,000
D. Cash-national Treasury
Modified Disb. System 65,100,000
Subsidy Income from National Government 65,100,000

28. Agency AJP had obligation for Personal Services (PS) amounting to P300,000 for the month of
February, the entry would be:
A. No entry
B. Memorandum entry in Registry of Allotment and Obligations for PS (RAOPS)
C. Appropriations Alloted 300,000
Obligations incurred 300,000
D. Cash-Disbursing Officer 300,000
Cash-National treasury (NT), MS 300,000

29. Agency CED was granted cash advances for payroll amounting to P280,000, the entry would be:
A. No entry
B. Memorandum entry in RAOPS
C. Payroll fund 280,000
Cash - National Treasury, MDS 280,000
D. Cash - Disbursing Officer 280,000
Due from National Government 280,000

30. Agency MAC’s obligation of rent for three years (3) amounted to P90,000. The entry to record this
transaction would be:
A. Rent Expenses 90,000
Cash-national Treasury, MDS 90,000
B. Prepaid Rent 90,000
Cash-National Treasury, MDs 90,000
C. Rent Expense 30,000
Prepaid Rent 30,000
D. Memorandum entry in RAOMO

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31. It is the formal document issued by DBM to the head of the agency containing the authorization,
condition and amount of allocation.
A. Allotment Release Order
B. Allotment and Obligation Slip
C. Notice of Cash Allocation
D. Registry of Allotment and Obligation

32. Agency JRB establish a petty cash fund for Maintenance and Other Operating expenses (MOOE)
amounting to P10,000. The entry for this transaction would be:
A. No entry
B. Memorandum entry
C. Petty Cash Fund 10,000
Cash-National Treasury, MDS 10,000
D. Petty Cash Fund 10,000
Cash-Disbursing Officers 10,000

33. Agency ABC grants cash advance to Mr. Cody for traveling expense amount to P12,000. The
entry for the cash advance would be:
A. Cash-Disbursing Officer 12,000
Cash-National Treasury, MDS 12,000
A. Cash-Collecting Officer 12,000
Cash-National Treasury, MDS 12,000
B. Travel Expense 12,000
Cash-National Treasury, MDS 12,000
C. Advances to Officers & Employees 12,000
Cash-National Treasury, MDS 12,000

34. Agency REY have an obligation for building upon signing of contract amounting to P10,000,000.
The entity to record this transaction would be:
A. No entry
B. Memorandum entry in RAOCO
C. Appropriations Alloted 10,000,000
Obligations incurred 10,000,000
D. Buildings 10,000,000
Accounts Payable 10,000,000

35. Agency EEE issued check to Nongovernment Organizations (NGO’s) for fund assistance
amounting to P100,000. The entry to record this transaction would be:
A. No entry
B. Memorandum entry in RAOMO
C. Due from National Gov’t. Agency 100,000
Cash-National Treasury, MDS 100,000
D. Other Receivables 100,000
Cash-National Treasury, MDs 100,000

36. The journal entry to be made by the government agency upon receipt of the Notice of Cash
Allocation is
A. Cash - National Treasury, MDS
Subsidiary income from National Government
B. Cash in bank - local currency, current account
Subsidy income from National Government
C. Cash in bank - local currency, savings account
Subsidy income from national Government
D. Cash in bank - local currency, time deposit
Subsidy income from National Government

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37. It is the implementation of the national government budget by different department and release of
allotments
A. Budget preparation
B. Budget authorization
C. Budget execution
D. Budget accountability

38. Zero Base Budgeting

I - Is a process in the budget preparation which requires consideration of all programs, projects
and activities with the use of defined ranking procedures.

II - Refers to the yearly analysis, evaluation and justification of each activity or project starting
from zero performance.
A. I only
B. II only
C. Both I and II
D. Neither I nor II

39. Which of the following is charged with government accounting responsibility?

I. Commission on Audit
II. Department of Budget and Management
III. Bureau of treasury
IV. National Government Agency

A. I and II only
B. I, II and III only
C. I only
D. I, II, III, and IV

40. The following selected transactions occur for ABC Agency, a national government agency for the
month of October, 2009, in the sequence shown:
A. Received allotment advice with notice of cash allocation, P10,000
B. Issued an MDS check to Rey O as cash advance for traveling expenses, P2,000.
C. Issued an MDS check for the purchase of spare parts, net of withholding taxes, P2,640
D. Issued a TRA (Tax Remittance Advice) for the withholding taxes in ©, P360.
E. Refund of excess cash advance by Rey O to the collecting officer, P500.
F. Deposit of the collection for the excess cash advance to the National Treasury, P500.
G. Issued an MDS check for the acquisition of office equipment, net of withheld taxes, P4,400.
H. Issued an MDS check to BIR for the remittance of the withheld taxes in (g), P600.

Calculate the revenue to be reported by ABC in the September, 2009 Statement of Revenues and
Expenses:
A. P 9,860 C. P 9,500
B. P10,360 D. P 10,000

41. University of Santo Tomas unrestricted current funds comprised the following.
Assets P 5,000,000
Liabilities (including deferred revenues of P 100,000) 3,000,000

The fund balance of net assets of University of Santo Tomas unrestricted current funds was
a. P 1,900,000 c. P 2,100,000
b. 2,000,000 d. 5,000,000

42. For the 2016 summer session, Messiah University assessed its students P 300,000 for tuition and
fees. However, the net amount realized was only P 290,000 because of the following reductions:
Tuition remissions granted to faculty members’ families P 3,000
Class cancellation refunds 7,000

How much unrestricted current funds revenues from tuition and fees should Messiah University
report for the period?
a. P 290,000 c. P297,000
b. 293,000 d. 300,000
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43. Specific income accounts of the government include all of the following, except
A. Taxes imposed on income
B. Taxes imposed on properties and use or sale of goods and services
C. Fines and penalties
D. Foreign government grant

44. SME, a national government agency unit incurs an obligation for the purchase of a garbage truck
for P 4,500,000 on March 31, 2016. The dump truck is to be delivered on March 31, 2016 and the
motor firm has agreed for a 30-day, interest free delayed payment i.e. payable on April 30, 2016.
Assume a 12% tax on the purchased covered by TRA.

On March 15, 2016, the entry to be recorded by SME will be:

A. Equipment 4,500,000
Accounts payable 4,500,000
B. Equipment 4,500,000
Accounts payable 3,960,000
SI from NG 540,000
C. Equipment 4,500,000
Accounts payable 3,960,000
Due to BIR 540,000
D. Memo entry in RAOCO

45. For the summer session of 2016, Elgira University assessed its students P 1,700,000 (net of
refunds), covering tuition and fees for educational and general purposes. However, only
P 1,500,000 was expected to be realized because scholarships totaling P150,000 were granted to
students, and tuition remissions of P50,000 were allowed to faculty members’ children attending
Elgira.

What amount should Elgira include in the unrestricted current funds as revenues from student
tuition and fees?
a. P 1,500,000 c. P 1,650,000
b. 1,550,000 d. 1,700,000

46. Charity Fund is a voluntary welfare organization funded by contributions from the general public.
During 2015, unrestricted pledges of P100,000 were received, half of which were payable in 2015,
with the other half payable in 2016 for use in 2016. It was estimated that 20% of these pledges,
would be uncollectible.

With respect to the pledges, the amount that should be reported for 2015 as net contributions,
under public support, is
a. P 100,000 c. P 50,000
b. 80,000 d. 40,000

47. In 2015, Manila Health, a voluntary health and welfare organization, received a bequest of a P
200,000 certificate of deposit maturing in 2016. The testator’s only stipulations were that this
certificate be held until maturity and that the interest revenue for 2016 was P 16,000. When the
certificate matured and was redeemed, the board of trustees adopted a formal resolution
designating P 40,000 of the proceeds for the future purchase of equipment for the pre-school
program.

What amount should Manila report in its 2016 year-end current funds balance sheet as fund
balance designated for the pre-school program?
a. P -0- c. P 40,000
b. 16,000 d. 56,000

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48. In 2016, the Board of Trustees of Honesty Foundation designated P 100,000 from its current funds
for college scholarships. Also in 2016, the foundation received a bequest of P 200,000 from an
estate of a benefactor who specified that the bequest was to be used for hiring teachers to tutor
handicapped students.

What amount should be accounted for as current restricted funds?

a. P -0- c. P 200,000
b. 100,000 d. 300,000

49. On January 2, 2016, a nonprofit botanical society received a gift of an exhaustible fixed asset with
an estimated useful life of 10 years and no salvage value. The donor’s cost of this asset was
P 20,000, and its fair market value at the date of the gift was P 30,000.

What amount of depreciation of this asset should the society recognize in its 2016 financial
statements?
a. P 3,000 c. P 2,000
b. 2,500 d. -0-

50. How is charity care accounted for on the financial statements of a not for profit private sector
health-care entity?
A. As patient service revenue
B. As bad debt expense
C. As a separate component of revenue
D. Not included on the financial statements

**** THE END ****

GOD BLESS!

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