COA Memorandum Circular No. 2020-006

29. More than fifty (50) percent of government assets are composed  of Property, Plant, and Equipment (PPE). To properly check the PPE account balances of government agencies, the Commission on Audit (COA) issued a circular to provide  guidelines and procedures to be followed. What was this issuance?

• A.COA Circular  No. 2020-005

• B.COA Circular  No. 2020-006

• C.COA Circular  No. 2021-005

• D.COA Circular  No. 2021-006

30. Discrepancies in PPE account balances reports of government Agencies cause unverifiable balance reports in terms of existence, Condition, and accountability. These causes:

i.non-establishment of the accuracy of the PPE balances presented in the financial statements

ii.Exception in the fairness of presentation in the financial position of government agencies

iii.Deprivation of the government of reliable and useful information in decision-making and accountability for these assets

• A. i and ii only 

•   B. i and iii only

• C. ii and iii only

•   D. all of the above

31. The guidelines and procedures prescribed in the COA Circular are for the following purposes, EXCEPT:

• A.Inventory taking

• B.Recognition of PPE found at the station

• C.Redirection of PPE allocation

• D.Disposition  for non-existing/missing PPE items

32. PPE are government-owned tangible items that are:

i.purchased, constructed, developed or otherwise acquired ii.for rental to others (other than investment property)

iii.not intended for resale in the ordinary course of operations

iv.for administrative purposes

v.expected to be used during more than one reporting period

vi.held for use in the production or supply of goods or services or to produce program outputs

• A. i, iii, v, and vi only 

•   B. i, iv, v, and vi only

• C. i, iii, iv, and vi only

•   D. all of the above

33. The cost of an item of PPE shall be recognized as asset if and only if:

i. it is probable that the future economic benefits or service potential associated with the item will flow to the entity

ii.the cost or fair value of the item can be measured reliably

iii.beneficial ownership and control clearly rest with the government

iv.the asset is used to achieve government objectives

v.it meets the capitalization threshold of ₱15,000

•   A. i, iii, and iv only 

•   B. ii, iii, and iv only

• C. i, ii, and iii only

• D. all of the above

34. When will the carrying amount of a PPE be derecognized?

• A.When no future economic benefits is expected from its use

• B.When no future service potential is expected from its use

• C.When no future economic benefits or service potential is expected from its use or disposal

• D.All of the above

35. The Inventory Committee created by the Head of the Agency shall be composed of an adequate number of members to be able to complete the physical inventory. How long do they have to complete the inventory?

• A.5 months or less

• B.4 months or less

• C.3 months or less

• D.2 months or less

36. The Head of the Agency MAY require a representative from the agency’s Internal Audit Service/Unit to witness the inventory taking. However, the ENTIRE inventory taking should be witnessed by the COA Auditor. Who may be assigned for the purpose?

• A.Audit Team Leader

• B.Audit Assistant Team Leader

• C.Any of the Audit Team Members

• D.Any or all of the above

37. During inventory, a property sticker containing the property number shall be attached to the PPE. The following vital information shall also be contained in the property sticker as applicable:

i.Description of the property

ii.Model number

iii.Serial number

iv.Acquisition date/Cost

v.Person accountable

vi.Space for validation/signature of the Inventory Committee

•   A. ii, iii, iv, v, and vi only 

•   B. i, iv, v, and vi only 

• C. i, ii, iii, iv, and v only

• D. all of the above

38. The Inventory Committee, in coordination with the Property Division/Unit, shall prepare a Physical Inventory Plan (PIP), which when approved by the Head of the Agency, shall be submitted to the COA Audit Team at least 10 days before the scheduled start of inventory-taking activities. The PIP shall contain

i.The specific assignments/duties of the Inventory Committee members

ii.Cut off date and a schedule specifying the dates and locations of the inventory-taking activities from start up to the targeted completion of the inventory.

• A. i only 

•   B. ii only 

• C. i and ii

• D. i or ii