ADV2

Subdecks (2)

Cards (157)

  • According to the GAM for NGAs, all financial assets are initially measured at fair value.
    FALSE
  • According to the GAM for NGAs, government entities shall prepare bank reconciliations only at year-end or whenever the need arises.
    FALSE
  • Only debt instruments with remaining maturity of 3 months or less can qualify as cash equivalents.

    FALSE
  • The PCF of a government entity is replenished when disbursements reach at least 90%, or as needed.
    FALSE
  • No journal entry is prepared when a disbursement is made out of the petty cash fund.
    TRUE
  • A government entity established a P30,000 petty cash fund. The custodian must be bonded for at least P5,000.
    FALSE
  • According to the GAM for NGAs, all financial assets shall be initially measured at fair value plus transaction costs.
    FALSE
  • Transaction costs on financial assets classified under the held to maturity category are expensed outright.
    FALSE
  • A derivative derives its value from the changes in value of a specified rate, price, event or some other variable.
    TRUE
  • Risk management is the process of identifying the desired level of risk, identifying the actual level of risk and altering the latter to equal the former.
    TRUE
  • Which of the following is not considered a financial asset?
    PREPAID ASSETS
  • A cash shortage of a government entity is most likely recorded as a
    DEBIT TO A RECEIVABLE ACCOUNT
  • Dishonored checks are recorded by a government entity as
    OTHER RECEIVABLES
  • The entry to record the replenishment of a petty cash fund of a government entity is
    debit:expense account credit:cash,MDS
  • Under this method of bank reconciliation statement preparation, the unadjusted bookand bank balances are brought to an adjusted balance that is reported on the statement of financial position.
    ADJUSTED BALANCE METHOD
  • Which of the following may be paid through the petty cash fund of government entity?
    PANTRY SUPPLIES WORTH P15,000
  • Entity A maintains a petty cash fund. At any given point of time, the cash on hand and the petty cash vouchers must be equal to the ledger balance of the petty cash fund. If these are not equal, the difference is either shortage or overage. This system of handling petty cash fund is called
    IMPREST SYSTEM
  • According to the GAM for NGAs, the establishment of a petty cash fund
    REQUIRES THE APPROVAL OF THE HEAD OF AGENCY
  • The “Loans Receivable” account is most likely to be used in the books of accounts of which of the following government agencies?
    Btr
  • Which of the following is not one of the characteristics of a derivative? IT REQUIRES NO NOTIONAL AMOUNT (OR ONLY A VERY MINIMAL NOTIONAL AMOUNT)
  • According to the GAM for NGAs, these refer to incremental costs that are directly attributable to the acquisition, issue, or disposal of afinancial instrument.
    TRANSACTION COSTS
  • Which of the following is not one of the categories of financial assets under the GAM for NGAs? FINANCIAL ASSET THROUGH OTHER COMPREHENSIVE INCOME
  • Entity A acquires an investment for P1,000,000. Transaction costs amount to P10,000. At year-end, the investment has a fair value of P900,000. If the investment is classified as financial assets through surplus or deficit, how much is the loss from the change in fair value?

    0
  • According to the GAM for NGAs, changes in fair value of investments classified as available for sale financial assets are RECOGNIZED IN NET ASSETS
  • Entity A acquires an investment for P100,000 and incurs transaction costs of P10,000. At year-end, the fair value of the investment is P80,000. Entity A recognized a P30,000 loss from the change in fair value. The investment would most likely to have been classified under which of the following categories of financial assets?AVAILABLE-FOR-SALE FINANCIAL ASSETS
  • Entity A acquires an investment for P100,000 and incurs transaction costs of P10,000. At year-end, the fair value of the investment is P120,000. However, the investment is appropriately reported in the year-endstatement of financial position at a carrying amount of P106,382. The investment would most likely to have been classified under which of the following categories of financial assets?HELD-TO-MATURITY INVESTMENTS
  • According to the GAM for NGAs, a government entity’s cash comprises all of the following except.
    cash equivalent
  • Which of the following is excluded from the amount of cash that is reported in the statement of financial position of a government entity? POST-DATED CHECKS RECEIVED
  • An unexplained cash overage of a government entity is recorded as a CREDIT TO MISCELLANEOUS INCOME ACCOUNT
    true
  • All of the following are considered internal controls over cash except MAINTAINING THE PETTY CASH FUND UNDER A FLUCTUATING BALANCE SYSTEM WHEREIN THE TOTAL CASH ON HAND AND PETTY CASH VOUCHERS MAY OR MAY NOT BE EQUAL TO A FIXED AMOUNT OF PETTY CASH FUND AT ANY GIVEN POINT OF TIME
    true
  • The per transaction threshold for petty cash disbursements of a government entity is
    15000
  • A government agency shall prepare a bank reconciliation for each bank account maintained. Bank reconciliations are prepared using the
    adjusted balance method
  • If the adjusted balance of cash is less than the unadjusted balance per books and there are no other reconciling items or errors, the difference is most likely caused by credit memo
    false
  • According to the GAM for NGAs, receivables are measured at (INITIAL) FAIR VALUE PLUS TRANSACTION COSTS (SUBSEQUENT) AMORTIZED COST
    true
  • The subsequent changes in the fair value of an investment that is classified as available for sale are recognized in NET ASSETS OR EQUITY
    true
  • According to the GAM for NGAs, the very purpose of derivatives is
    Risk management
  • According to the GAM for NGAs, inventories of government entities are subsequently measured at net realizable values or current replacement cost depending on the whether the inventory isclassified as held for sale or held for distribution.
    false
  • According to the GAM for NGAs, purchase of machinery, equipment, furniture and fixtures and similar items below the P10,000 capitalization threshold for PPE are recorded as inventories by a government entity.
    false
  • Relief goods, office supplies, equipment and furniture and fixture are items that may appropriately be recorded as inventories by a government entity.

    true
  • The GAM for NGAs allows government entities to use the FIFO cost flow formula.
    false