chapter 1 Flashcards by MARY JUSTINE GALLANO

It encompasses the processes of analyzing, recording, classifying, summarizing and communicating all transactions involving the receipt and disposition of government funds and property, and interpreting the results thereof.
a. Government accounting
b. Government reporting
c. Government auditing
d. Tax accounting

a. Government accounting

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The GAM for NGAs is promulgated by the
a. Commission on Accounting (COA)
b. Commission on Audit (COA)
c. Board of Accountancy (BOA)
d. Bureau of Internal Revenue (BIR)

b. Commission on Audit (COA)

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The Commission on Audit (COA) is responsible for

a. the formulation and implementation of the national budget with the goal of attaining the nation’s socio-economic objectives.
b. receiving and keeping national funds and managing and controlling the disbursements thereof.
c. directly implementing the projects of the government.
d. promulgating accounting and auditing rules and regulations

d. promulgating accounting and auditing rules and regulations

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Which of the following is not charged with government accounting responsibility?
a. Commission on Audit
b. Bureau of Internal Revenue
c. Non-stock, non-profit private hospital
d. Department of Budget and Management

c. Non-stock, non-profit private hospital

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Which of the following qualitative characteristics may be sacrificed when reporting information on a timely basis?
a. Relevance
b. Reliability
c. Substance over form
d. Faithful representation

b. Reliability

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According to the GAM for NGAs, information has this qualitative characteristic if it can be used to assist in evaluating past, present or future events or in confirming or correcting past evaluations.
a. Feedback value
b. Predictive value
c. Materiality
d. Relevance

d. Relevance

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This refers to the comparability between the financial statements of different entities?
a. Inter-comparability
b. Intra-comparability
c. Horizontal comparability
d. Vertical comparability

a. Inter-comparability

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When the substance of a transaction or event differs from its legal form, the entity should report the transaction’s or event’s
a. substance
b. legal form
c. a trade-off between a and b
d. either a or b, based on their significance

a. substance

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The implication that users must be informed of the entity’s policies, changes to those policies, and the effects of those changes refers to
a. Comparability
b. Completeness
c. Understandability
d. Reliability

a. Comparability

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In the financial reporting system of the national government, to which of the following shall an entity reconciles its cash records?
a. Commission on Audit
b. Bureau of Treasury
c. Department of Budget and Management
d. Office of the President

b. Bureau of Treasury

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Compared to the accounting for business entities, government accounting places greater emphasis on the sources and utilization of government funds and the management’s stewardship over government resources.

TRUE

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Taxes are the main source of funds of the government.

TRUE

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Other sources of funds of the government include fees, borrowings, and grants from other governments and international bodies.

TRUE

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Currently, the financial reporting of government entities is based on NGAS

FALSE

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The principles used in the financial reporting of government entities are very unique that only a very few of these principles are similar to those that are applied to business entities.

FALSE

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The principles in the GAM for NGAs are similar to the principles in the PFRSs.

TRUE

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The GAM for NGAs is promulgated by the Philippine Congress under the authority conferred to it under the Philippine Constitution.

FALSE

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A unique financial reporting requirement of government entities is the use of fund cluster accounting. Under fund cluster accounting, separate books and reports are prepared for each type of fund held by a government entity.

TRUE

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The GAM for NGAs is promulgated primarily to harmonize government accounting standards with the U.S. GAAP.

FALSE

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An item is recognized as an asset if it meets both the “probable future economic benefits” and “reliable measurement” criteria, regardless of whether the item is a resource controlled arising from past events. T/F

FALSE

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information should be complete within the bounds of materiality and cost

Completeness

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users are able to identify similarities and differences between that information and information in other reports.

Comparability

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intended to meet the needs of users who are not in a position to demand reports tailored to meet their particular information needs

General Purpose Financial Statements

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general purpose financial statements consists the ff

statement of financial position
statement of financial performance
statement of changes in net assets/equity
statement of cash flows
statement of comparison of budget and actual amounts
notes to financial statements

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Gov Acc places greater emphasis on the ff

1. Sources and utilization of government funds 2. Responsibility, accountability and liability of entities entrusted with government funds and properties

financial statement unique to a government entity

comparison of budget and actual amounts

1. Receipts from taxes and other fees 2. Borrowings 3. Grants from other governments and international bodies

Sources

resources controlled by an entity as a result of past events, and from which future economic benefits or service potential are expected to flow to the entity

ASSETS

1. Expenditures on programs 2. Projects 3. Unanticipated losses from calamities

Utilization

ability to benefit from an asset or prevent others from benefitting from that asset

CONTROL

directly responsible in implementing this policy and is primarily responsible for government resources entrusted to his agency

Head of the government agency

All those who are exercising authority over a government agency

Fiscal Responsibility

means the ability to use, exchange, lease, sell, or use the asset to settle liabilities, or distribute it to owners

BENEFIT

the transfer of government funds from one officer to another shall, except as allowed by law, be made only after the ___

authorization of COA

a transaction or event giving rise to control of future economic benefits must have occurred

past event

an accountable officer shall immediately notify the COA for any loss of government funds from unforeseen events (force majeure) within __

30 DAYS

present obligations of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits or service potential

Liabilities

residual interest in the assets of the entity after deducting all its liabilities

net assets/equity

offices charged with government accounting responsibility

1. Commission on Audit (COA) 2. Department of Budget and Management (DBM) 3. Bureau of Treasury (BTr) 4. Government agencies

gross inflow of economic benefits or service potential during the reporting period when those inflows result in an increase in net assets/equity, other than increases relating to contributions from owners

revenue

future economic benefits that have been contributed to the entity by external parties which do not result to liabilities of the entity and for which the contributor obtains interest in the net assets of the entity

contributions from owners

Keeps the general accounts of the government, supporting vouchers, and other documents

COA

comprise all funds derived from the income of any agency of the government and available for appropriation or expenditure in accordance with law

revenue funds

submits financial reports to the president and congress

COA

decreases in economic benefits or service potential during the reporting period in the form of outflows or consumption of assets or incurrence of liabilities that result in decreases in net assets/equity, other than those relating to distributions to owners

Expenses

responsible for the formulation and implementation of the national budget with the goal of attaining the nation's socio-economic objectives

DBM

future economic benefits distributed by the entity to its owners, either as a return on investment or as a return of investment

distributions to owners

functions under the Department of Finance and is the cash custodian of the government

BTr

authorized to receive and keep national funds and manage and control disbursements thereof

BTr

authorized to maintain accounts of financial transactions of all national government offices, agencies and instrumentalities

BTr

refers to any department, bureau or office of the national government, or ant of its branches and instrumentalities, or any political subdivision, as well as any government owned or controlled corporation (GOCC), including its subsidiaries, or other self-governing board or commission of the government

Government Agencies

Responsible for directly implementing the projects of and performing the functions delegated by, the government

Government agencies

refers to a government agency, department or operating/field unit

entity

the process of preparation, presentation and submission of the general purpose financial statements and other reports

Financial reporting

GAM for NGAs

Government Accounting Manual for National Government Agencies

promulgated primarily to harmonize accounting standards, particularly the International Public Sector Accounting Standards (IPSAS)

GAM for NGAs

the IPSAS are based on the ___

International Financial Reporting Standards (IFRS)

the Philippine Government has adopted the IPSAS through ___

Philippine Public Sector Accounting Standards (PPSAS)

financial records and reports of government entities shall comply with the ff

1. PPSAS and relevant laws, rules and regulations 2. Accrual basis of accounting 3. budget basis 4. revised chart of accounts 5. double entry bookkeeping 6. FS based on accounting and budgetary records 7. fund cluster accounting

attributes that make information useful to others

qualitative characteristics

when users can reasonably be expected to comprehend its meaning

Understandability

can assist users in evaluating past, present or future events or in confirming or correcting past evaluations. must be timely

Relevance

its omission or misstatements could influence the decisions if users.

materiality

information loses its relevance if there is undue delay in its reporting

Timeliness

free from material error and bias, and can be depended on by users to represent faithfully that which it purports to represent or could reasonably be expected to represent

Reliability

presented in accordance with the substance of the transaction and other events, and not merely their legal form

Faithful Representation

necessary that they be accounted for and presented in accordance with their substance and economic reality, not merely their legal form

substance over form

free from bias. information shall not be selected or presented in a manner that is designed to influence the user's decision in order to achieve a predetermined outcome

Neutrality

exercise of a degree of caution when making estimates under conditions of uncertainty, such that assets or revenue are not overstated and liabilities or expenses are not understated

prudence

chapter 1 Flashcards

(71 cards)