CGFO Accounting And Financial
Reporting FINAL EXAM 2025/2026
QUESTIONS AND VERIFIED CORRECT
SOLUTIONS || 100% GUARANTEED PASS
<BRAND NEW VERSION>
1. What is the difference between accounting methods in government and
private sector? - ANSWER ✓ Government uses modified accrual method for
certain funds.
2. Why is governmental accounting more complex than private-sector
accounting? - ANSWER ✓ Multiple funds and differential accounting bases.
3. How is a fund defined? - ANSWER ✓ Fiscal entity with self-balancing
accounts.
4. How can a fund be conceptually viewed? - ANSWER ✓ Legal entity with
inflows and outflows of financial resources.
5. What happens when inflows exceed outflows in a fund? - ANSWER ✓ Fund
accumulates a balance.
6. What happens when there is a net outflow in a fund? - ANSWER ✓
Reduction in fund balance.
7. Where do funds receive revenue from? - ANSWER ✓ Different sources.
8. How are funds typically created? - ANSWER ✓ By law or executive fiat.
,9. How many funds can a government have? - ANSWER ✓ Anywhere from
less than 10 to several hundred.
10.What are the three broad categories in which funds are grouped? -
ANSWER ✓ Governmental, proprietary, and fiduciary.
11.What is the largest and most important operating fund? - ANSWER ✓
General Fund.
12.What is the purpose of the General Fund? - ANSWER ✓ To account for and
report all financial resources not accounted for in another fund.
13.What are the types of Governmental Funds? - ANSWER ✓ General Fund,
Special Revenue, Debt Service Funds, Capital Projects Funds, Permanent
funds.
14.What are the types of Proprietary (Business-type) Funds? - ANSWER ✓
Enterprise Funds, Internal Service Funds.
15.What are the types of Fiduciary Funds? - ANSWER ✓ Investment Trust
Funds, Private-purpose Trust Funds, Pension Trust Funds, Agency Funds.
16.What are special revenue funds? - ANSWER ✓ Funds established to account
for specific revenue sources.
17.What is the purpose of special revenue funds? - ANSWER ✓ To segregate
revenue for specific purposes and ensure compliance.
18.What is the role of the operating budget in special revenue funds? -
ANSWER ✓ It provides authorization for the use of funds.
19.What are debt service funds? - ANSWER ✓ Funds that account for
resources used for principal and interest payments on long-term debt.
20.What type of debt is typically accounted for in debt service funds? -
ANSWER ✓ General obligation (GO) bonds.
,21.PDIC - ANSWER ✓ Philippine Deposit Insurance Corporation
22.Cash is valued at? - ANSWER ✓ face value
23.cash in foreign currency is valued at? - ANSWER ✓ current exchange rate
24.if a financial institution holding the funds of the company is in bankruptcy or
otger difficulty, cash should be? - ANSWER ✓ written down to estimated
realizable value if the amount is recoverable is estimated to be lower than
the face amount.
25.usually presented as the first item among the current assets - ANSWER ✓
cash
26.if the cash fund is set aside for use in current operations or for the payment
of current obligation - ANSWER ✓ current asset and included as part of
cash and cash equivalents
(petty cash fund, payroll fund, travel fund, interest fund, dividend fund, tax
fund)
27.if the cash fund is set aside for non-current purpose or payment of non-
current obligation - ANSWER ✓ it is a long-term investment (sinking fund,
preference share redemption fund, contingent fund, insurance fund and fund
for acquisition or construction of property, plant, and equipment)
28.classification of cash fund as current and non-current should? - ANSWER ✓
parallel the classification applied to the related liability
29.excess cash should be invested even temporarily in some type of earning
investments such as - ANSWER ✓ time deposits, money market
instruments, treasury bill
30.if the investment term is 3 months or less, it is classified as? - ANSWER ✓
cash equivalents (cash and cash equivalent)
31.if the term is more than 3 months but within one year, it is classified as? -
ANSWER ✓ short-term financial assets or temporary investments (current
assets)
, 32.if the term is more than one year, it is classified as? - ANSWER ✓ non-
current or long-term investments
33.cash in foreign currency should be - ANSWER ✓ translated to Philippine
pesos using the current exchange rate (year-end rate)
34.deposits in foreign countries which are not subject to any foreign exchange
restriction are included in? - ANSWER ✓ cash
35.deposits in foreign bank which are subject to foreign exchange restriction (if
material) should be classified seperately? - ANSWER ✓ non-current assets
and restriction clearly indicated
36.occurs when the cash in bank account in the company's ledger has a credit
balance; it is the results from the issuance of checks in excess of deposits -
ANSWER ✓ bank overdraft
37.in the philippines, generally overdraft? - ANSWER ✓ not permitted
38.bank overdraft? - ANSWER ✓ current liability and should not be offset
against other bank accounts with debit balance
39.bank overdraft can be offset only with? - ANSWER ✓ the other accounts of
the same bank; offset against the other bank account if the amount is not
material
40.the amount if its inclusion or omission in the FS could influence the decision
of a prudent investor - ANSWER ✓ material
41.bank overdraft that is repayable on demand that forms part of an entity's
cash management - ANSWER ✓ included as a component of cash and cash
equivalent
42.required minimum balance that acompany must maintain deposited with
commercial.bank to support existing borrowing arrangements with the said
bank to avoid extra bank charges; result in reduction of the amount
borrowed - ANSWER ✓ compensating balance
Reporting FINAL EXAM 2025/2026
QUESTIONS AND VERIFIED CORRECT
SOLUTIONS || 100% GUARANTEED PASS
<BRAND NEW VERSION>
1. What is the difference between accounting methods in government and
private sector? - ANSWER ✓ Government uses modified accrual method for
certain funds.
2. Why is governmental accounting more complex than private-sector
accounting? - ANSWER ✓ Multiple funds and differential accounting bases.
3. How is a fund defined? - ANSWER ✓ Fiscal entity with self-balancing
accounts.
4. How can a fund be conceptually viewed? - ANSWER ✓ Legal entity with
inflows and outflows of financial resources.
5. What happens when inflows exceed outflows in a fund? - ANSWER ✓ Fund
accumulates a balance.
6. What happens when there is a net outflow in a fund? - ANSWER ✓
Reduction in fund balance.
7. Where do funds receive revenue from? - ANSWER ✓ Different sources.
8. How are funds typically created? - ANSWER ✓ By law or executive fiat.
,9. How many funds can a government have? - ANSWER ✓ Anywhere from
less than 10 to several hundred.
10.What are the three broad categories in which funds are grouped? -
ANSWER ✓ Governmental, proprietary, and fiduciary.
11.What is the largest and most important operating fund? - ANSWER ✓
General Fund.
12.What is the purpose of the General Fund? - ANSWER ✓ To account for and
report all financial resources not accounted for in another fund.
13.What are the types of Governmental Funds? - ANSWER ✓ General Fund,
Special Revenue, Debt Service Funds, Capital Projects Funds, Permanent
funds.
14.What are the types of Proprietary (Business-type) Funds? - ANSWER ✓
Enterprise Funds, Internal Service Funds.
15.What are the types of Fiduciary Funds? - ANSWER ✓ Investment Trust
Funds, Private-purpose Trust Funds, Pension Trust Funds, Agency Funds.
16.What are special revenue funds? - ANSWER ✓ Funds established to account
for specific revenue sources.
17.What is the purpose of special revenue funds? - ANSWER ✓ To segregate
revenue for specific purposes and ensure compliance.
18.What is the role of the operating budget in special revenue funds? -
ANSWER ✓ It provides authorization for the use of funds.
19.What are debt service funds? - ANSWER ✓ Funds that account for
resources used for principal and interest payments on long-term debt.
20.What type of debt is typically accounted for in debt service funds? -
ANSWER ✓ General obligation (GO) bonds.
,21.PDIC - ANSWER ✓ Philippine Deposit Insurance Corporation
22.Cash is valued at? - ANSWER ✓ face value
23.cash in foreign currency is valued at? - ANSWER ✓ current exchange rate
24.if a financial institution holding the funds of the company is in bankruptcy or
otger difficulty, cash should be? - ANSWER ✓ written down to estimated
realizable value if the amount is recoverable is estimated to be lower than
the face amount.
25.usually presented as the first item among the current assets - ANSWER ✓
cash
26.if the cash fund is set aside for use in current operations or for the payment
of current obligation - ANSWER ✓ current asset and included as part of
cash and cash equivalents
(petty cash fund, payroll fund, travel fund, interest fund, dividend fund, tax
fund)
27.if the cash fund is set aside for non-current purpose or payment of non-
current obligation - ANSWER ✓ it is a long-term investment (sinking fund,
preference share redemption fund, contingent fund, insurance fund and fund
for acquisition or construction of property, plant, and equipment)
28.classification of cash fund as current and non-current should? - ANSWER ✓
parallel the classification applied to the related liability
29.excess cash should be invested even temporarily in some type of earning
investments such as - ANSWER ✓ time deposits, money market
instruments, treasury bill
30.if the investment term is 3 months or less, it is classified as? - ANSWER ✓
cash equivalents (cash and cash equivalent)
31.if the term is more than 3 months but within one year, it is classified as? -
ANSWER ✓ short-term financial assets or temporary investments (current
assets)
, 32.if the term is more than one year, it is classified as? - ANSWER ✓ non-
current or long-term investments
33.cash in foreign currency should be - ANSWER ✓ translated to Philippine
pesos using the current exchange rate (year-end rate)
34.deposits in foreign countries which are not subject to any foreign exchange
restriction are included in? - ANSWER ✓ cash
35.deposits in foreign bank which are subject to foreign exchange restriction (if
material) should be classified seperately? - ANSWER ✓ non-current assets
and restriction clearly indicated
36.occurs when the cash in bank account in the company's ledger has a credit
balance; it is the results from the issuance of checks in excess of deposits -
ANSWER ✓ bank overdraft
37.in the philippines, generally overdraft? - ANSWER ✓ not permitted
38.bank overdraft? - ANSWER ✓ current liability and should not be offset
against other bank accounts with debit balance
39.bank overdraft can be offset only with? - ANSWER ✓ the other accounts of
the same bank; offset against the other bank account if the amount is not
material
40.the amount if its inclusion or omission in the FS could influence the decision
of a prudent investor - ANSWER ✓ material
41.bank overdraft that is repayable on demand that forms part of an entity's
cash management - ANSWER ✓ included as a component of cash and cash
equivalent
42.required minimum balance that acompany must maintain deposited with
commercial.bank to support existing borrowing arrangements with the said
bank to avoid extra bank charges; result in reduction of the amount
borrowed - ANSWER ✓ compensating balance
