Manuel on the New Government Accounting System for National
Government Agencies
MANUAL ON THE
NEW GOVERNMENT ACCOUNTING SYSTEM
For National Government Agencies
ACCOUNTING POLICIES
Volume I
Chapter 1. Introduction
Sec. 1. Objectives of the Manual. The New Government Accounting
System (NGAS) Manual presents the basic policies and procedures;
the new coding system; the accounting systems, books, registries,
records, forms, reports, and financial statements; and illustrative
accounting entries to be adopted by all national government
agencies effective January 1, 2002. The objectives of the Manual
are to prescribe the following:
a. Uniform guidelines and procedures in accounting for
government funds and property;
b. New coding structure and chart of accounts;
c. Accounting books, registries, records, forms, reports and
financial statements; and
d. Accounting entries.
Sec. 2. Coverage. This Manual shall be used by all national
government agencies.
Sec. 3. Legal Basis. This Manual is prescribed by the Commission
on Audit pursuant to Article IX-D, Section 2 par. (2) of the 1987
Constitution of the Republic of the Philippines which provides
that:
The Commission on Audit shall have exclusive authority, subject
to the limitations in this Article, to define the scope of its
audit and examination, establish the techniques and methods
required therefor, and promulgate accounting and auditing rules and
regulations, including those for the prevention and disallowance of
irregular, unnecessary, excessive, extravagant, or unconscionable
expenditures, or uses of government funds and properties".
(underscoring supplied) Chapter 2. Basic Features and Policies
Sec. 4. Basic Features and Policies. The NGAS has the following
basic features and policies, to wit:
a. Accrual Accounting. A modified accrual basis of accounting
shall be used. Under this method, all expenses shall be recognized
when incurred and reported in the financial statements in the
period to which they relate. Income shall be on accrual basis
except for transactions where accrual basis is impractical or when
other methods are required by law.
b. One Fund Concept. This system adopts the one fund concept.
Separate fund accounting shall be done only when specifically
required by law or by a donor agency or when otherwise necessitated
by circumstances subject to prior approval of the Commission.
c. Chart of Accounts and Account Codes. A new chart of accounts
and coding structure with a three-digit account numbering system
shall be adopted. (See Volume III, The Chart of Accounts)
d. Books of Accounts. All national agencies shall maintain two
sets of books, namely:
Regular Agency (RA) Books. These shall be used to record the
receipt and utilization of Notice of Cash Allocation (NCA) and
other income/receipts which the agencies are authorized to use and
to deposit with Authorized Government Depository Bank (AGDB) and
the National Treasury. These shall consist of journals and ledgers,
as follows:
Journals
Cash Receipts Journal (CRJ)
Cash Disbursements Journal (CDJ)
Check Disbursements Journal (CkDJ)
General Journal (GJ)
Ledgers General Ledger (GL)
Subsidiary Ledgers (SL) for:
Cash
Receivables
Inventories
Investments
Property, Plant and Equipment
Construction in Progress
Liabilities
Income
Expenses
National Government (NG) Books. These shall be used to record
income which the agencies are not authorized to use and are
required to be remitted to the National Treasury. These shall
consist of: Cash Journal (CJ)
General Journal (GJ)
General Ledger (GL)
Subsidiary Ledger (SL)
With the implementation of the computerized agency accounting
system, only the General Journal shall be used together with the
ledgers by both books.
e. Financial Statements. The following statements shall be
prepared:
Balance Sheet
Statement of Government Equity
Statement of Income and Expenses
Statement of Cash Flows
Notes to Financial Statements shall accompany the above
statements.
f. Two-Money Column Trial Balance. The two - money column trial
balance showing the account balances shall be used.
g. Allotment and Obligation. Obligation accounting is modified
to simplify procedures in the incurrence and liquidation of
obligations and the recording of the budgetary accounts (allotments
and obligations incurred and liquidated). Separate registries shall
be maintained to control the allotments and obligations for each of
the four classes of allotments, namely:
Registry of Allotments and Obligations - Capital Outlay
(RAOCO)
Registry of Allotments and Obligations - Maintenance and Other
Operating Expenses (RAOMO)
Registry of Allotments and Obligations - Personal Services
(RAOPS)
Registry of Allotments and Obligations- Financial Expenses
(RAOFE).
h. Notice of Cash Allocation (NCA). The receipt of NCA by the
agency shall be recorded in the books as debit to account
Cash-National Treasury, Modified Disbursement System (MDS) and
credit to account Subsidy Income from National Government.
i. Financial Expenses. Financial expenses such as bank charges,
interest expenses, commitment charges and other related expenses
shall be separately classified from Maintenance and Other Operating
Expenses (MOOE).
j. Perpetual Inventory of Supplies and Materials. Supplies and
materials purchased for inventory purpose shall be recorded using
the perpetual inventory system. Regular purchases shall be coursed
thru the inventory account and issuances thereof shall be recorded
as they take place except those purchased out of Petty Cash Fund
which shall be charged directly to the appropriate expense
accounts.
k. Valuation of Inventory. Cost of ending inventory of supplies
and materials shall be computed using the moving average
method.
l. Maintenance of Supplies and Property, Plant and Equipment
Ledger Cards. For appropriate check and balance, the Accounting
Units of agencies, as well as the Property Offices, shall maintain
Supplies Ledger Cards/Stock Cards by stock number and Property,
Plant and Equipment Ledger Cards/Property Cards by category of
property, plant and equipment, respectively.
m. Construction of Assets. For assets under construction, the
Construction Period Theory shall be applied for costing purposes.
Bonus paid to the contractor for completing the work ahead of time
shall be added to the total cost of the project. Liquidated damages
charged and paid for by the contractor shall be deducted from the
total cost of the project. Any related expenses incurred during the
construction of the project, such as taxes, interest, license fees,
permit fees, clearance fee, etc. shall be capitalized, and those
incurred after the construction shall form part of operating
cost.
n. Registry of Public Infrastructures/Registry of Reforestation
Projects. For agencies that construct public infrastructures, such
as roads, bridges, waterways, railways, plaza, monuments, etc., and
invest on reforestation projects, a Registry of Public
Infrastructures (RPI)/Registry of Reforestation Projects (RRP)
shall be maintained for each category of
infrastructures/reforestation projects. Examples are:
Registry of Public Infrastructures - Bridges (RPIB)
Registry of Public Infrastructures - Roads (RPIR)
Registry of Public Infrastructures - Parks (RPIP)
Registry of Reforestation Projects (RRP)
A Summary of Public Infrastructures/Reforestation Projects shall
be prepared and included in the Notes to Financial Statements.
o. Depreciation. The straight-line method of depreciation shall
be used. Depreciation shall start on the second month after
purchase of the property, plant and equipment, and a residual value
equivalent to ten percent of the purchase cost shall be set-up.
Public infrastructures/reforestation projects as well as
serviceable assets that are no longer being used shall not be
charged any depreciation.
p. Reclassification of Assets. Serviceable assets no longer
being used shall be reclassified to Other Assets account and shall
not be subject to depreciation.
q. Allowance for Doubtful Accounts. An Allowance for Doubtful
Accounts shall be set up for estimated uncollectible trade
receivables to allow for their fair valuation.
r. Elimination of Contingent Accounts. Contingent accounts shall
no longer be used. All financial transactions shall be recorded
using the appropriate accounts. Cash shortages and disallowed
payments, which become final and executory, shall be recorded under
receivable accounts Due From Officers and Employees or
Receivables-Disallowances/ Charges, as the case may be.
s. Recognition of Liability. Liability shall be recognized at
the time goods and services are accepted or rendered and
supplier/creditor bills are received.
t. Interest Accrual. Whenever practical and appropriate,
interest income and/or expense shall be accrued and recognized in
the books of accounts.
u. Accounting for Borrowings and Loans. All borrowings and loans
incurred shall be recorded to the appropriate liability
accounts.
v. Elimination of corollary and negative journal entries. The
use of corollary and negative journal entries shall be stopped.
Acquisition/Disposition of assets shall be debited/credited to the
appropriate asset accounts. If an error is committed, a correcting
entry to adjust the original entry shall be prepared.w. Petty Cash
Fund. The Petty Cash Fund shall be maintained under the imprest
system. As such, all replenishments shall be directly charged to
the expense account and at all times, the Petty Cash Fund shall be
equal to the total cash on hand and the unreplenished expenses. The
Petty Cash Fund shall not be used to purchase regular
inventory/items for stock.
x. Foreign Currency Adjustment. Cash deposits in foreign
currency and outstanding foreign loans shall be computed at the
exchange rate prescribed by the Bangko Sentral ng Pilipinas at
balance sheet date. The total cash deposits and foreign loans
payable shall be adjusted at the end of each month and any gain or
loss on foreign exchange shall be recognized. The subsidiary ledger
for foreign currency obligations shall reflect the appropriate
foreign currency in which the loan is payable. The liability shall
be expressed both in the foreign and local currency.
Chapter 3. Accounting Systems
Sec. 5. General Accounting Plan. The General Accounting Plan
(GAP) shows the overall accounting system of a government
agency/unit. It includes the source documents, the flow of
transactions and its accumulation in the books of accounts and
finally their conversion into financial information/data presented
in the financial reports. Presented on next page is the General
Accounting Plan for national government agencies.
The following accounting systems are:
a. Budgetary Accounts System;
b. Receipts/Income and Deposit System;
c. Disbursement System; and
d. Financial Reporting System.
A. BUDGETARY ACCOUNTS
Sec. 6. Budgetary Accounts System. The Budgetary Accounts System
encompasses the processes of preparing Agency Budget Matrix (ABM),
monitoring and recording of allotments received by the agency from
the DBM, releasing of Sub-Allotment Release Order (Sub-SARO) to
Regional Offices (RO) by the Central Office (CO); issuance of
Sub-SARO to Operating Units (OU) by the RO; and recording and
monitoring of obligations.
Sec. 7. Budgetary Accounts. Budgetary accounts consist of the
appropriations, allotments and obligations. Appropriations refer to
authorizations made by law or other legislative enactment for
payments to be made with funds of the government under specified
conditions and/or for specified purposes. Appropriations shall be
monitored and controlled through registries and control worksheets
by the DBM and COA, respectively. Budgetary accounts allotments and
obligations are discussed in the succeeding sections.
INSERT GENERAL ACCOUNTING PLAN
for
National Government Agencies
Sec. 8. Agency Budget Matrix (ABM). The ABM refers to a document
showing the disaggregation of agency expenditures into components
like, among others, by source of appropriations, by allotment class
and by need of clearance.
Sec. 9. Procedures for the Preparation of the ABM
Area of
ResponsibilitySeq.
No.Activity
Budget Unit
Concerned Staff1Based on the approved General Appropriations Act
(GAA) and in coordination with the DBM, prepares the ABM by
appropriations/financing sources to support expenditures to be made
during the year broken down by allotment class/expenses.
Note 1
The ABM shall contain, among others, the following
information:
The amount to be released categorized under Not Needing
Clearance column, and
The amount that will be released through the issuance of Special
Allotment Release Order (SARO) categorized under "Needing Clearance
column including continuing appropriations based on the Statement
of Allotments, Obligations and Balances (SAOB).
2Initials under 'Prepared by' portion of the ABM.
Head, Budget Unit3Reviews and signs Prepared by portion of the
ABM.
Concerned Staff4Forwards the ABM together with a transmittal
letter for the DBM to the Head of the Agency for
signature/approval.
Head of the Agency5Approves/Signs the ABM and the transmittal
letter.
Concerned Staff6Records in the logbook maintained and submits
the signed ABM to the DBM for approval.
Sec. 10. Allotment Release Order (ARO). The ARO is a formal
document issued by the DBM to the head of the agency containing the
authorization, conditions and amount of an agency allocation. The
document may be the ABM, where the amount of allocation not needing
clearance is indicated, or the Special Allotment Release Order
(SARO), where the release of which is subject to compliance with
specific laws or regulations or is subject to separate approval or
clearance by competent authority. In the case of agencies with
decentralized accounting procedures, Sub-ARO/Sub-SARO is
issued/released.
Sec. 11. Recording of Allotments. Upon receipt of the approved
ABM and ARO, the Budget Officer/Head of the Budget Unit/Designated
Budget Officer shall record the allotment in the respective
registries through the Allotment and Obligations Slip (ALOBS).
Separate registries shall be maintained for the four allotment
classes by Program/Project/Activity (P/P/A), to wit:
1. Registry of Allotments and Obligations - Capital Outlay
(RAOCO)
2. Registry of Allotments and Obligations - Maintenance and
Other Operating Expenses (RAOMO)
3. Registry of Allotments and Obligations - Personal Services
(RAOPS)
4. Registry of Allotments and Obligations - Financial Expenses
(RAOFE)
Sec. 12. Procedures in the Monitoring and Recording of
Allotments Received from DBMArea of
ResponsibilitySeq.
No.Activity
Budget Unit
Concerned Staff1Receives the approved ABM/SARO from the DBM.
Records the same in the logbook and forwards the ABM/SARO to Budget
Staff for preparation of an Allotment and Obligation Slip
(ALOBS).
Budget Staff2Prepares ALOBS in two copies, assigns number and
initials the same. Forwards the ALOBS and ABM/SARO to the Head of
the Budget Unit for review and signature.
Note 1
The numbering structure of the ALOBS shall be as follows:
PS 00 00 0000 Serial Number
(One series for
the whole year)
Month
Year
Allotment Class
(PS, MOOE, CO and FE) shall be used only when obligations are
recorded in the ALOBS
Note 2
The ALOBS shall be prepared in two copies and shall be
distributed as follows:
Original-Retained by the Budget Unit to support recording in the
registries
Copy 2 -Accounting Unit
Head of the Budget Unit3Reviews, checks the small box opposite
the 'Received' portion in Box A of the ALOBS and affixes signature
certifying receipt of allotment. Returns to the Budget Staff for
recording in the appropriate Registry of Allotments and Obligations
(RAOs).
Budget Staff4Records the ALOBS in the appropriate RAOs. Files
the ALOBS for reference.
Note 3
The following RAOs shall be maintained by the Budget Unit:
Registry of Allotments and Obligations - Personal Services
(RAOPS)
Registry of Allotments and Obligations -Maintenance and Other
Operating Expenses (RAOMO)
Registry of Allotments and Obligations -Capital Outlays
(RAOCO)
Registry of Allotments and Obligations - Financial Expenses
(RAOFE)
5Forwards Copy 2 of the ALOBS to the Accounting Unit for
reference.
Sec. 13. Procedures for the Recording of Sub-Allotment Release
Order (Sub-ARO) by RO/ OU Area of
ResponsibilitySeq.
No.Activity
Central Office/
Regional Office
Budget Unit
Budget Staff1Based on the approved ABM received from the DBM,
prepares Sub-ARO for RO/OU. Forwards the Sub-ARO to the Head of the
Budget Unit CO/RO for review.
Head of the Budget Unit 2Reviews and signs Sub-ARO. Forwards the
same to the Head of the CO/RO for approval.
Head of Central Office/Regional Office/ Authorized
Officer
3Approves the Sub-ARO.
Budget Staff4Based on the approved Sub-ARO, prepares ALOBS in
two copies. Assigns number and initials the ALOBS. Forwards the
same with a copy of approved Sub-ARO to the Head of the Budget Unit
for review and signature.
Note 1
Distribution of ALOBS shall be as follows:
Original - CO/RO Budget Unit
Copy 2 - CO/RO Accounting Unit
Note 2
Refer to ALOBS numbering structures in Note 1 Sec. 12,
Procedures in the Monitoring and Recording of Allotments Received
from DBM
Head of the Budget Unit5Reviews, checks the small box opposite
the Sub-allotted portion of Box A of the ALOBS and affixes
signature certifying as to the amount sub-allotted to RO/OU.
Forwards the same with the approved Sub-ARO to Budget Staff for
recording in the appropriate RAOs.
Budget Staff6Records the ALOBS in the appropriate RAOs. Files
the ALOBS and a copy of the Sub-ARO.
Note 3
The ALOBS covering sub-allotment for the RO/OU shall be entered
in the RAOs as negative entry in the Allotment column and shall be
deducted from the allotment balance.
Note 4
A copy of the ALOBS covering allotment of the RO/OU shall be
furnished the Accounting Unit for reference.
Concerned Staff7Records in the logbook the release of the
Sub-ARO to RO/OU.
Regional Offices/
Operating Units
Budget Unit
Concerned Staff8Receives the approved Sub-ARO from the CO/RO.
Records the same in the logbook maintained. Forwards the Sub-ARO to
the Budget Staff for the preparation of ALOBS.
Budget Staff9Prepares ALOBS in two copies, assigns number and
initials the same. Forwards the ALOBS and Sub-ARO to the Head of
the Budget Unit for review and signature.
Note 5
Refer to Notes 1 and 2 of Sec.12, Procedures for the Monitoring
and Recording of Allotments Received from the DBM.
Head of the Budget Unit10Reviews the ALOBS based on the Sub-ARO.
Checks the small box opposite the Received portion of Box A of the
ALOBS and affixes signature certifying that the allotment was
received. Forwards the ALOBS and Sub-ARO to the Budget Staff for
recording in the appropriate RAOs.
Note 6
Refer to Note 3, of Sec.12, Procedures for the Monitoring and
Recording of Allotments Received from the DBM.
Budget Staff11Records the ALOBS in the RAOs. Files the Sub-ARO
and original of the ALOBS.
12Forwards copy 2 of the ALOBS to the Accounting Unit for
reference.
Sec. 14. Accounting for Obligation. Obligation refers to a
commitment by a government agency arising from an act of a duly
authorized official which binds the government to the immediate or
eventual payment of a sum of money. The agency is authorized to
incur obligations only in the performance of activities which are
in pursuits of its functions and programs authorized in
appropriation acts/laws within the limit of the ARO.
Obligations shall be taken up in the registries through the
ALOBS prepared/processed by the Budget Unit. The Budget Officer/
Head of the Budget Unit/designated Budget Officer shall certify to
the availability of allotment and such is duly obligated by signing
in the appropriate box of the ALOBS. On the other hand, the
Accountant/Head of the Accounting Unit shall certify to the
correctness and validity of obligations, and availability of funds.
Both Budget and Accounting Units shall coordinate in the filling up
of the Status of the Obligation in their respective copies of the
ALOBS
Sec. 15. Procedures for the Recording of Obligations Area of
ResponsibilitySeq.
No.Activity
Budget Unit
Concerned Staff1Receives the Disbursement Voucher/Payroll
(DV/P), and supporting documents, Contract/ Purchase Order (C/PO)
from concerned offices/personnel. Verifies completeness of the
documents. If incomplete, returns the documents to concerned
offices for completion. If complete, records the same in the
logbook maintained. Forwards the documents to Budget Staff for the
preparation of the ALOBS.
Budget Staff2Verifies availability of allotment based on the
RAOs. If no allotment is available, returns the documents to the
office/personnel concerned except as authorized by the DBM.
3If there is an available balance of allotment to cover the
obligations, prepares an ALOBS in three copies. Initials the ALOBS
and forwards the same to the Head of the Budget Unit for review and
signature.
Note 1
Copy 3 of ALOBS shall be attached to the DV. Refer to Note 2,
Sec. 12, Procedures for the Monitoring and Recording of Allotments
Received from DBM for the distribution of the other copies of
ALOBS.
Head of the Budget Unit4Reviews, checks the small box opposite
the Available and duly obligated portion of Box A of the ALOBS and
affixes signature. Forwards the ALOBS and documents to the Budget
Staff for recording in the appropriate RAOs.
Budget Staff5Records the amount obligated under the Obligation
column of the RAOs. Forwards all copies of the ALOBS and the
documents to the Accounting Unit for processing and signature.
Note 2
Obligations shall be posted in the Obligation Incurred column of
the RAOs to arrive at the balance of allotment still available at a
given period.
6Receives original of ALOBS from the Accounting Unit. If there
is no correction, files the same to support the RAOs. Otherwise,
effects correction in the RAOs or prepares a new ALOBS, as the case
may be.
Note 3
For the succeeding activities, refer to Sec. 34, Procedures for
Disbursements By Checks.
Note 4
There is no need to prepare a new ALOBS for
corrections/adjustments made by the Accounting Unit after the
processing of the claims but before payment is made. Adjustment in
the RAOs shall be effected thru a positive entry (if additional
obligation is necessary) or a negative entry (if reduction) in the
Obligation Incurred column.
Note 5
Preparation of new ALOBS for the following adjustments of
obligations as negative entries in the Obligation Incurred column
shall be made:
refund of cash advance granted during the year
overpayment of expenses during the year
disallowances/charges which become final and executory
Certified copies of official receipts for the
overpayments/refunds, copies of bills for overpayments and Notice
that the disallowances are final and executory shall be furnished
the Budget Unit by the Accounting Unit for the preparation of new
ALOBS taking up the adjustments.
B. INCOME/COLLECTIONS AND DEPOSITS
Sec. 16. Receipts/Income Collections and Deposits System. The
Receipts/Income Collections and Deposits System covers the
processes of acknowledging and reporting income/collections,
deposits of collections with Authorized Government Depository Bank
(AGDB) or through the AGDB for the account of Treasurer of the
Philippines, and recording of collections and deposits in the books
of accounts of the agency.
Sec. 17. Sources of Income of the National Government. The
income of the National Government are classified into general
income accounts and specific income accounts. The following
comprise the general income accounts, among others:1. Subsidy
Income from National Government
2. Subsidy from Central Office3. Subsidy from Regional
Office/Staff Bureaus4. Income from Government Services5. Income
from Government Business Operations6. Sales Revenue7. Rent Income8.
Insurance Income9. Dividend Income10. Interest Income11. Sale of
Confiscated Goods and Properties12. Foreign Exchange (FOREX)
Gains13. Miscellaneous Operating and Service Income14. Fines and
Penalties-Government Services and Business Operations 15. Income
from Grants and Donations
The specific income accounts of national government agencies are
classified as follows:
1. Income Taxes2. Property Taxes3. Taxes on Goods and Services4.
Taxes on International Trade and Transactions5. Other Taxes6. Fines
and Penalties-Tax Revenue7. Other Specific Income
The descriptions of all the accounts and the instructions as to
when these are to be debited and credited are provided in Volume
III of the NGAS Manual. Sec. 18. Methods of Accounting for Income.
National government agencies adopt the following accounting methods
of recording income:
1. Accrual Method - Accrual method of accounting shall be used
by national government agencies when income is realized (earned)
during the accounting period regardless of cash receipt. Accounts
receivable is set up and the general or specific income accounts
according to nature and classification are credited.
2. Modified Accrual Under the modified accrual basis, income of
an agency is recorded as Deferred Credits to Income and the
appropriate receivable account is debited. The income account is
recognized upon receipt of collection and the Deferred Credits to
Income account is adjusted accordingly.
3. Cash Basis - Cash basis of accounting shall be used for all
other taxes, fees, charges and other revenues where accrual method
is impractical. The income account is credited upon collection of
the cash or its equivalent.
Sec. 19. Fines and Penalties. Fines and penalties, either on tax
revenues or other specific income accounts, shall be recognized as
income of the year these were collected.
Sec. 20. Other Receipts. Other receipts of national government
agencies shall be comprised of, but not limited to the
following:
1. Refund of cash advances - When cash advances for official
travels are granted, the account Due from Officers and Employees is
debited and when refunds are made, the same account is credited.
Cash advances for salaries and wages shall be recorded as debits to
the account Cash-Disbursing Officers and any refunds thereof shall
be credited to the same account.
2. Receipts of performance/bidders/bail bonds - Performance bond
posted by contractor or supplier to guaranty full and faithful
performance of their contract may be in the form of cash or
certified checks or surety. Performance bond in cash or certified
check shall be acknowledged by the issuance of official receipt and
recorded in the book of accounts by the Accountant thru a Journal
Entry Voucher (JEV) for the purpose. In case of surety bond, an
acknowledgement receipt shall be issued by the authorized
official.
3. Refund for overpayment of expenses - Refunds as a result of
overpayment of expenses shall be recorded as a credit to the
appropriate expense account if paid in the same year or to Prior
Years Adjustments if paid in the ensuing year. This transaction
shall reduce the amount of expense previously recorded.
4. Collections made on behalf of another agency or private
companies - Collections made on behalf of other agencies which are
later remitted to them are recorded under accounts Due to NGAs, Due
to LGUs or Due to GOCCs as the case maybe. Authorized collections
made on behalf of private entities, like shares of proponents of
Built-Operate-Transfer (BOT) Projects are recorded as Other
Payables.
5. Inter-agency transferred funds - Cash received from another
agency for the purpose of implementing projects of that agency is
recorded in the books as a credit to account Due to NGAs or Due to
LGUs, as the case maybe.
Sec. 21. Deposit of Collections. All Collecting Officers shall
deposit intact all their collections, as well as collections turned
over to them by sub-collectors/tellers, with AGDB daily or not
later than the next banking day. They shall record all deposits
made in the Cash Receipts Record.
Sec. 22. Reporting of Collections and Deposits. At the close of
each business day, the Collecting Officers shall accomplish the
Report of Collections and Deposits (RCD) in accordance with the
instructions provided in Volume II of the NGAS Manual for the RCD.
All collections shall be deposited with AGDB for the account of the
agency or the Treasurer of the Philippines daily or not later than
the next banking day.
Sec. 23. Procedures for Collections and Deposits Through the
Collecting Officer Area of
ResponsibilitySeq.
No.Activity
Cash UnitDaily
Designated Staff1Receives cash/check from payor representing
collection based on the Order of Payment (OP) prepared by the
Accounting Unit.
2Issues Official Receipt (OR) to acknowledge receipt of
cash/check.
Note 1
Funding Checks received by the Cashier/ Collecting Officer of
the RO/OU for its operational requirements shall be issued
corresponding OR..
Note 2
Separate sets of ORs shall be used for the RA and NG Books.
Note 3
The OR shall be prepared in three copies and shall be
distributed as follows:
Original - Payor
Copy 2 - To be attached to the Report of Collections and
Deposits (RCD)
Copy 3 - Cash Unit file
3Records collections in the Cash Receipts Record (CRR).
Note 4
Separate CRR shall be maintained for collections under the RA
and NG Books.
4Prepares Deposit Slip (DS) in three copies.
Note 5
The DS shall be distributed as follows:
Original - AGDB
Copy 2 - To be attached to RCD
Copy 3 - Cash Unit file
5Deposits collections with AGDB.
Note 6
Collections pertaining to NG Books shall be deposited with the
AGDB for the account of the Treasurer of the Philippines
6Based on the validated DS from the AGDB and copy of the ORs on
file, prepares Report of Collections and Deposits (RCD) in two
copies. Initials on the RCD and forwards the same together with
Copy 2 of the ORs and DS to the Head of the Cash Unit for review
and signature.
Head of the Cash Unit7Reviews and signs the RCD. Forwards
original of RCD, Copy 2 of the ORs and DS to the Designated Staff
for submission to the Accounting Unit.
Note 7
The RCD shall be distributed as follows:
Original - Accounting Unit together with Copy No. 2 of the ORs
and DS - to support the JEV
Copy 2 - Cash Unit file
Designated Staff8Records the RCD in the logbook maintained and
forwards the same with the ORs and DS to the Accounting Unit for
recording in the books of accounts.
Accounting Unit
Accounting Staff9Receives original of RCD with Copy 2 of the ORs
and DS from the Cash Unit. Records receipt in the logbook
maintained for the purpose and forwards the same to the Bookkeeper
for review and preparation of the JEV.
Bookkeeper10Based on the RCD, prepares JEV in two copies and
signs Prepared by portion of the JEV. Forwards the JEV and
documents to the Head of the Accounting Unit for review and
signature.
Head of the Accounting Unit11Reviews and signs Certified Correct
by portion of the JEV. Forwards the JEV and documents to the
Bookkeeper for recording in the Cash Receipt Journal (CRJ) and/or
Cash Journal (CJ) as the case may be.
Note 8
CRJ shall be used to record collection under the RA Books while
the CJ shall be used to record collections under the NG Books.
Note 9
For the succeeding activities, refer to Sec. 71, Preparation and
Submission of Trial Balances and Other Reports.
Sec. 24. Procedures for Collections through Accredited Agent
Banks (AAB)
Area of
ResponsibilitySeq.
No.Activity
Accounting Unit
Receiving/ Releasing Staff1Receives collection documents from
the AAB/AGDB. Records receipt in the logbook maintained for the
purpose. Forwards the same to the Bookkeeper for preparation of the
JEV.
Bookkeeper2Based on the received collection documents, prepares
JEV in two copies, Signs Prepared by portion of the JEV. Forwards
the JEV and documents to the Head of the Accounting Unit for review
and signature.
Head of the Accounting Unit3Reviews and signs Certified Correct
by portion of the JEV. Forwards the JEV and documents to the
Bookkeeper for recording in the General Journal (GJ).
Note 1
For the succeeding activities, refer to Sec. 71, Preparation and
Submission of Trial Balances and Other Reports.
Sec. 25. Dishonored Checks. There are instances that checks
received by Collecting Officers in payment of taxes, fees and other
debt due the government are dishonored by the drawee banks. A check
is said to be dishonored by non-payment when, upon its being duly
presented for payment, such payment is refused or cannot be
obtained. (Sec. 83, RA No. 2031, Negotiable Instrument Law). It may
also be defined as those checks paid to the agency, which were
dishonored by the AGDB due to Drawn Against Insufficient Fund
(DAIF) or Drawn Against Uncleared Deposits (DAUD).
Sec. 26. Procedures in Recording Dishonored Checks
Area of
ResponsibilitySeq.
No.Activity
Cash Unit
Designated Staff1Receives from AGDB the Debit Memo (DM) and
copies of dishonored checks.
2Verifies the dishonored checks against the previous months RCDs
maintained on file to ascertain that the checks were included in
the previous months collections. If not included, verifies from
AGDB the details of the dishonored checks.
3If dishonored checks are included in the RCDs, prepares Notice
of Dishonor to inform the drawers/indorsers/payors that the checks
were dishonored by the AGDB.
Note 1
The Notice of Dishonor shall be prepared in three copies and
shall be distributed as follows:
Original - Drawer (To be delivered personally or thru registered
mail)
Copy 2 - Accounting Unit file
Copy 3 - Cash Unit file
4Retrieves from file copy of the OR covering the dishonored
check and indicates in the OR the following notation:
Cancelled (date of Notice of Dishonor) per Bank Debit/Voucher
No._____ dated _________
5Retrieves CRR on file and records the dishonored checks with
the following notation:
To take up Banks Debit Memo No. ___ dated ____ covering Check
No. ___ for P ____________ acknowledged under OR No. _____ dated
_______.
6Prepares list of dishonored checks in two copies. Forwards Copy
2 of the list and the dishonored checks to the Accounting Unit for
preparation of the JEV.
Accounting Unit
Accounting Staff7Receives the list together with originals of
dishonored checks and the Debit Memo from the Cash Unit and records
the same in the logbook maintained for the purpose.
8Based on the list, prepares the JEV in two copies. Signs
Prepared by portion of the JEV and forwards the same to the Head of
the Accounting Unit for review and signature.
Head of the Accounting Unit9Reviews and signs Certified Correct
by portion of the JEV. Forwards the JEV supported by the list,
originals of dishonored checks and notice of dishonor to the
Bookkeeper for recording in the books of accounts.
Note 2
For the succeeding activities, refer to Sec.71, Preparation and
Submission of Trial Balances and Other Reports.
C. DISBURSEMENTS
Sec. 27. Disbursements Defined. Disbursements constitute all
cash paid out during a given period either in currency (cash) or by
check. It may also mean the settlement of government
payables/obligations by cash or by check. It shall be covered by
Disbursement Voucher (DV)/Petty Cash Voucher (PCV) or payroll.
Sec. 28. Basic Requirements for Disbursements. The basic
requirements applicable to all types of disbursements made by
national government agencies are as follows:
1. Existence of a lawful and sufficient allotment certified as
available by the Budget Officer;
2. Existence of a valid obligation certified by the Chief
Accountant/Head of Accounting Unit;
3. Legality of transactions and conformity with laws, rules and
regulation;
4. Approval of the expense by the Chief of Office or by his duly
authorized representative; and
5. Submission of proper evidence to establish the claim.
Sec. 29. Disbursements System. The Disbursements System involves
the preparation and processing of disbursement voucher (DV);
preparation and issuance of check; payment by cash; granting,
utilization, and liquidation/replenishment of cash advances.
Sec. 30. Certification on Disbursements. Disbursements from
government funds shall require the following certifications on the
DV:
1. Certification and approval of vouchers and payrolls as to
validity, propriety and legality of the claim (Box A of DV) by head
of the department or office who has administrative control of the
fund concerned;
2. Necessary documents supporting the DV and payrolls as
certified and reviewed by the Accountant/Head of Accounting Unit
(Box B of DV); and
3. Certification that funds are available for the purpose by the
Accountant/Head of Accounting Unit (Box B of DV).
Sec. 31. Disbursements by Checks. Checks shall be drawn only on
duly approved DV or PCV. These shall be reported and recorded in
the books of accounts only when actually released to the respective
payees.
Two types of checks are being issued by government agencies as
follows:
1. Modified Disbursement System (MDS) Checks - issued by
government agencies chargeable against the account of the Treasurer
of the Philippines, which are maintained with different MDS -
Government Servicing Banks (GSBs). These are covered by Notice of
Cash Allocation, an authorization issued by the DBM to government
agencies to withdraw cash from the National Treasury through the
issuance of MDS checks or other authorized mode of
disbursements.
2. Commercial Checks - issued by government agencies chargeable
against the Agency Checking Account with GSBs. These are covered by
income/receipts authorized to be deposited with AGDBs; and funding
checks received by RO/OUs from COs/ROs, respectively.
Sec. 32. Recording of Check Disbursements in the Check
Disbursements Record (CkDR). All checks issued including cancelled
checks shall be recorded chronologically in the CkDR. The dates
checks were actually released shall be indicated in the appropriate
column provided for in the CkDR.
Sec. 33. Reporting of Checks Issued/Released. All checks
actually released to claimants shall be included in the Report of
Checks Issued (RCI), which shall be prepared daily by the Cashier.
The RCI shall be submitted to the Accounting Unit for the
preparation of JEV. All unreleased checks as of the report date
shall be enumerated in a List of Unreleased Checks to be attached
to the RCI.
Sec. 34. Procedures for Disbursements by Checks.
Area of
ResponsibilitySeq.
No.Activity
A. Processing of Disbursement Voucher (DV)
Accounting Unit
Receiving/ Releasing Staff1Receives Copies 1-3 of DV, originals
of supporting documents and Copies 1-3 of ALOBS from the Budget
Unit. Checks completeness of supporting documents. If incomplete,
returns to the concerned party for compliance.
2If complete, stamps Received and indicates date of receipt and
initials on the stamped Received portion of the DV.
Note 1
DV that shall be paid out of non-budgetary receipts shall not
pass the Budget Unit. No ALOBS is needed. (Example - refund of cash
bond).
3Assigns DV number and records in the logbook the DV number and
date, payee, particular and amount. Forwards Copies 1-3 of DV,
originals of supporting documents and Copies 1-3 of ALOBS to the
Designated Staff for processing.
Note 2
The numbering structure for DV shall be as follows:
00 - 00 - 0000
Serial Number
Month of Issue
Year of Issue
Note 3
DV number shall also be indicated on every sheet of the
supporting documents.
Designated Staff4Receives Copies 1-3 of DV, originals of
supporting documents and Copies 1-3 of ALOBS from the
Receiving/Releasing Staff. Reviews DV for completeness and
propriety of supporting documents.
5Checks Index of Payments (IP) from file and determines whether
there was prior payment of the same claim. If the claim was already
paid, returns the DV and supporting documents to the
Receiving/Releasing Staff to be returned to claimant.
6If not yet paid, records the following in the IP: name and
address of creditor, DV date and number, particulars and
amount.
7Accomplishes Box B of ALOBS and initials.
8Initials in Box B of DV and forwards Copies 1-3 of DV,
originals of supporting documents and Copies 1-3 of ALOBS to the
Head of Accounting Unit for review and signature.
Head of the Accounting Unit
9Reviews DV and supporting documents. Signs in Box B of DV and
ALOBS. Forwards the documents to the Receiving/Releasing Staff.
Receiving/
Releasing Staff10
Records in the logbook the date of release of Copies 1-3 of DV,
originals of supporting documents and Copy 3 of ALOBS. Forwards to
the Head of Agency or Authorized Representative for approval of the
DV. Forwards Copy 1 of ALOBS to the Budget Unit and retains Copy 2
of ALOBS for file.
Head of Agency or Authorized Representative
11Reviews and approves DV. Forwards Copies 1-3 of DV, Copy 3 of
the ALOBS and originals of supporting documents to the Cash Unit
for check preparation.
B. Preparation and Approval of Checks
Cash Unit
Receiving/ Releasing Staff12Receives Copies 1-3 of approved DV,
Copy 3 of ALOBS and originals of supporting documents. Records in
the logbook the date of receipt, DV number, payee, particulars and
amount.
Designated Staff13Verifies completeness of signatories on the
DV. Prepares check in three copies.
14Retrieves from file the Check Disbursements Records (CkDR) and
records the date, reference or check number, name of payee, nature
of payment and amount of the DV and extract the new balance of the
NCA/bank account. Forwards Copies 1-3 of check, Copies 1-3 of DV,
Copy 3 of ALOBS and originals of supporting documents to Cashier
for review and signature.
Cashier15Verifies completeness of signature on the DV. Reviews
the amount of the check against the DV and supporting documents.
Signs the check.
Authorized Official16Countersigns check. Forwards Copies 1-3 of
check, Copies 1-3 of DV, Copy 3 of ALOBS and supporting documents
to the Receiving/Releasing Staff for return to the Cashier.
Receiving/
Releasing Staff17Records in the logbook the date of release of
Copies 1-3 of check, Copies 1-3 of DV, Copy 3 of ALOBS and
supporting documents.
Cashier18Releases the original of check and Copy 3 of DV to the
payee. Attaches OR/Invoice on Copy 1 of DV. Files Copies 2-3 of
check, Copies 1-2 of DV, originals of supporting documents.
C. Preparation of Report of Checks Issued (RCI)
Daily,
19With Copies 1-2 of DV, Copy 3 of ALOBS, supporting documents,
Copies 2-3 of checks, prepares RCI in two copies.
Note 6:
RCI shall include only those checks actually released to the
payees during the day including cancelled ones.
Note 7:
The RCI shall be distributed as follows:
Original - Accounting Unit together with the originals of the
paid DVs/payroll and supporting documents for JEV preparation
Copy 2 - Cash Unit file
20Initials in Certification portion of the RCI.
Head of the Cash Unit21Reviews RCI and signs in Certification
portion.
Designated Staff
22Forwards original of RCI together with Copy 2 of checks, Copy
1 of DVs, Copy 3 of ALOBS and supporting documents to the
Accounting Unit for the preparation of JEV. Retains Copy 2 of RCI,
Copy 3 of checks and Copy 2 of DVs for file.
Note 8:
The List of Unreleased Checks shall be attached to the RCI to be
submitted to Accounting Unit for reference.
Accounting UnitD. Preparation of JEV
Daily
Receiving/
Releasing Staff23Records receipt of Copy 1 of RCI together with
Copy 2 of checks, Copy 1 of DVs, Copy 3 of ALOBS and originals of
supporting documents from Cash Unit in the logbook. Forwards the
documents to the Designated Staff for JEV preparation.
Designated Staff24Examines DVs and checks against RCI. Verifies
if the serial number of checks actually issued, including spoiled
and cancelled ones, are all accounted for.
25Prepares JEV in two copies and signs in the Prepared by
portion.
Head of the Accounting Unit/Authorized Signatory26Reviews
correctness of the journal entries and signs on Certified Correct
by portion of the JEV. Forwards Copies 1-2 of JEV and Copy 1 of
RCI, Copy 2 of checks, Copy 1 of DVs, Copy 3 of ALOBS and originals
of supporting documents to Designated Staff for recording in the
Check Disbursements Journal (CkDJ).
E. Recording in the CkDJ
Designated Staff27Receives Copies 1-2 of JEV and Copy 1 of RCI,
Copy 2 of checks, Copy 1 of DVs, Copy 3 of ALOBS and supporting
documents. Records the JEV in the CkDJ. Retains Copy 2 of JEV for
file. Forwards Copy 1 of JEV, RCI and DV, Copy 2 of checks, Copy 3
of ALOBS and supporting documents to the Receiving/Releasing Staff
for submission to COA for audit.
Receiving/ Releasing Staff28Records in the logbook the date of
submission of Copy 1 of JEV, RCI, DVs, Copy 3 of ALOBS, Copy 2 of
checks and originals of supporting documents. Forwards the
documents to COA for audit.
Note 9:
For the succeeding activities, refer to Sec. 71, Preparation and
Submission of Trial Balances and Other Reports.
Sec. 35. Disbursements by Cash. Disbursements by cash shall be
made from cash advances drawn and maintained in accordance with COA
rules and regulations. Cash payments shall be made based on duly
approved payrolls/disbursements vouchers.
Sec. 36. Cash Advances for Travel. Cash advances granted for
travel shall be accounted for as Due from Officers and Employees
and these are subject to liquidation upon travel completion. For
liquidation of travel where the amount of cash advance is equal to
or more than the travel expenses incurred, the Liquidation Report
form shall be prepared by the officers/employees concerned and
submitted to the Accounting Unit as basis for JEV preparation. The
excess cash advance shall be refunded and an OR shall be issued to
acknowledge receipt thereof. In case the amount of cash advance is
less than the travel expenses incurred, a Liquidation Report shall
be submitted to liquidate the cash advance previously granted and a
DV shall be prepared to claim reimbursement of the deficiency in
amount.
Sec. 37. Procedures for Disbursements by Cash - Payment for
Payroll and Other Expenses
Area of
ResponsibilitySeq.
No.Activity
Cash Unit
Accountable/ Disbursing Officer1Receives the approved check from
the Cashier. Records in the Cash Disbursements Record (CDR) the
date, reference, name of payee, particulars and the amount of check
in the debit column.
2Encashes check in a GSB.
3Pays officials and employees/other payees.
Note 1
Employees/payees shall sign on the received portion of the
payroll/DV to acknowledge receipt of payment.
Note 2
If there are unclaimed salaries, refund the same within a
reasonable time. OR representing the refund shall be issued by the
Cashier.
4Records payment including the refund for unclaimed salary in
the credit column of the CDR.
At the End of the Month
5Based on the paid payroll/DV and supporting documents, prepares
Report of Disbursements (RD) in two copies. Signs the Certification
portion of the RD.
Note 3
The RD shall serve as the liquidation report of the cash advance
granted to the Disbursing Officer.
Note 4
The RD shall be distributed as follows:
Original - Accounting Unit together with the originals of the
paid DVs/Payrolls and supporting documents for JEV preparation
Copy 2 - Cash Unit file
Accounting Unit
Releasing/
Receiving Clerk6Records in the logbook, indicates Received and
signs all copies, forwards the RD to the Bookkeeper for JEV
preparation, and returns Copy 2 to the Cash Unit.
Bookkeeper7Prepares JEV based on the RD and supporting documents
received.
Note 5
For the succeeding activities, refer to Sec.71, Preparation and
Submission of Trial Balances and Other Reports.
8Records payroll payment in the individual Index of Payments
(IP) of officials and employees.
Sec. 38. Disbursements Through Bank - Payroll Payment Area
of
ResponsibilitySeq.
No.Activity
Cash Unit
Cash Staff
1Receives the approved check, DV and Following Months' Payroll
(FMP), signs the logbook of the releasing office, and forwards the
documents to the Cashier.
2Deposits the check to the Bank Payroll Account together with
the original of the Summary of Employees Net Earnings (SENE)
received from Accounting Unit. Files temporarily Copies 1-2 of FMP,
copy 2 of the check, and Copies 1-3 of DV for the preparation of
RCI.
Note 1
The payee of the check is the Servicing Bank whose authorized
representative shall acknowledge receipt of the check by signing on
the original of the DV.
Note 2
Refer to Seq. No. 19, Sec.34, Procedures for Disbursements by
Checks.
Note 3
Payroll payment through bank shall also be recorded in the IP
maintained by the Accounting Unit.
Sec. 39. Disbursements Through Petty Cash Fund. Petty Cash Fund
shall be maintained under the imprest system. The fund shall be
sufficient for the non-recurring, emergency and petty expenses of
the agency. Disbursements from the fund shall be through the Petty
Cash Voucher (PCV) which shall be approved by authorized officials
and signed by the payee to acknowledge the amount received. The
official receipt or its equivalent is attached to the PCV.
Sec. 40. Procedures for Disbursements Through Petty Cash
Fund
Area of
ResponsibilitySeq.
No.Activity
Various Unit
Petty Cash Custodian1Receipt of Check for the Establishment/
Replenishment of Petty Cash Fund
Receives check from Cashier for the establishment/replenishment
of petty cash fund. Retrieves Cash Disbursement Record (CDR) and
records the date, reference and the amount of check in the
Disbursements column.
2Encashes check in GSB and keeps the cash in a safety vault.
Requesting Personnel3
Utilization of Petty Cash Fund
Accomplishes Box A Requested by portion of the Petty Cash
Voucher (PCV).
Immediate Supervisor 4Signs Box A Approved by portion of the PCV
and returns to Requesting Personnel.
Requesting Personnel5Submits to the Petty Cash Custodian for the
release of fund.
Petty Cash Custodian6Receives from the Requesting Personnel the
PCV duly approved by concerned official.
7Upon granting of the petty cash advance and signs in Box B Paid
by portion of the PCV.
Requesting Personnel8Receives petty cash and signs in Box B Cash
Received by portion of the PCV.
Petty Cash Custodian9Issues Copy 2 of the PCV to requesting
personnel
10Retrieves CDR from file and records paid PCVs. Fills up the
following columns: date, reference, name of payee, nature of
payment, amount in the credit column and cash advance balance.
11
Files the original of PCV awaiting liquidation.
Liquidation of Petty Cash Advance
12
13
Receives from Requesting Personnel Copy 2 of the PCV together
with supporting documents. Checks and reviews completeness of
documents such as the date, amount and nature of expenses paid as
shown in the supporting documents.
If incomplete, returns to Requesting Personnel for completion of
needed supporting documents.
If complete, retrieves the original of PCV from file and fills
up Box D Liquidation Submitted portion of the original and Copy 2
of PCVs.
14Checks the appropriate boxes for Received Refund or
Reimbursement Paid portion and signs Box C of the PCV.
Requesting Personnel15Checks and fills up the appropriate boxes
for Liquidation Submitted and Reimbursement Paid upon submission of
necessary supporting documents and receipt or reimbursement of
cash, if any, and signs the PCV.
Petty Cash Fund Custodian16Returns Copy 2 of the PCV to the
Requesting Personnel.
17
If the amount granted is equal to the amount paid as shown in
the liquidated PCV, proceeds to Sequence No. 18.
If the amount is not equal to the amount paid, retrieves from
file the CDR and records the necessary adjustments based on the
liquidated PCV. Fills up the following columns: date, reference,
name of payee, and nature of payment, amount in the appropriate
debit, credit and balance columns.
18
Files the original of the PCV together with the supporting
documents awaiting replenishment.
Replenishment of Petty Cash Fund
Petty Cash Fund Custodian19Retrieves from file the original of
the PCV together with the supporting documents. Checks the
completeness of all PCVs for replenishment.
20Prepares the Petty Cash Replenishment Report (PCRR) in two
copies based on PCVs in numerical sequence and fills up the
following columns: date, PCV No., particulars and amount.
21Signs in the Certified Correct by portion of the PCRR.
22Based on the PCRR, prepares DV in three copies. Forwards
Copies 1-3 of the DV, original of the PCRR and PCV, and supporting
documents to Authorized Official for review and signature.
Authorized Official23Signs in Box A portion of the DV.
Petty Cash Fund Custodian24Forwards Copies 1-3 of the DV,
originals of PCRR and PCVs and supporting documents to Budget
Division for preparation of the ALOBS.
Note 1
For the succeeding activities, refer to Sec.15, Procedures in
the Recording of Obligations.
G. PROPERTY, PLANT AND EQUIPMENT, AND INVENTORY ACCOUNTS
Sec. 41. Purchase or Construction of Property, Plant and
Equipment. Property, plant and equipment acquired through purchase
shall include all costs incurred to bring them to the location
necessary for their intended use, like transportation costs,
freight charges, installation costs, etc. These are recorded in the
books of accounts as Assets after inspection and acceptance of
delivery.
During construction period, property, plant and equipment shall
be classified and recorded as Construction in Progress with the
appropriate asset classification. As soon as these are completed,
the "Construction in Progress" account shall be transferred to the
appropriate asset accounts.
Accounts Public Infrastructures and Reforestation Projects are
closed to Government Equity account and the asset is recorded in
the Registry of Public Infrastructures/Reforestation Projects at
the end of the year.
Sec. 42. Property and Inventory Accounting System. The Property
and Inventory Accounting System consists of the system of
monitoring, controlling and recording of acquisition and disposal
of property and inventory.
The system starts with the receipt of the purchased inventory
items and equipment. The requesting office in need of the inventory
items and equipment after determining that the items are not
available in stock shall prepare and cause the approval of the
Purchase Request (PR). Based on the approved PR and after
accomplishing all the required procedures adopting a particular
mode of procurement, the agency shall issue a duly approved
Purchase Order. Procedures relative to the obligation of the
purchase order and payment of the deliveries are discussed under
Sections 14 and 31, Accounting for Obligation and Disbursements by
Check, respectively.
The sub-systems are as follows:
1. Receipt, Inspection, Acceptance and Recording Deliveries of
Inventory Items and Equipment
2. Requisition and Issuance of Inventory Items
3. Requisition and Issuance of Equipment
Sec. 43. Perpetual Inventory Method. Purchase of supplies and
materials for stock, regardless of whether or not they are consumed
within the accounting period, shall be recorded as Inventory
account. Under the perpetual inventory method, an inventory control
account is maintained in the General Ledger on a current basis.
Regular purchases shall be recorded under the Inventory account
and issuance thereof shall be recorded based on the Report of
Supplies and Materials Issued. Purchases out of the Petty Cash Fund
shall be charged immediately to the appropriate expense
accounts.
The Accounting Unit shall maintain perpetual inventory records,
such as the Supplies Ledger Cards for each inventory stock,
Property, Plant and Equipment Ledger Cards for each category of
plant, property and equipment including work and other animals,
livestock, etc. The subsidiary ledger cards shall contain the
details of the General Ledger accounts.
For check and balance, the Property and Supply Office/Unit shall
maintain Property Cards (PC) for property, plant and equipment, and
Stock Cards (SC) for inventories. The balance in quantity per PC
and SC should always reconcile with the ledger cards of the
Accounting Unit.
Sec. 44. Moving Average Method. The moving average method of
costing shall be used for costing inventories. This is a method of
calculating cost of inventory on the basis of weighted average on
the date of issue. The Accounting Unit shall be responsible in
computing the cost of inventory on a regular basis.
Sec. 45. Procedures in the Receipt, Inspection, Acceptance and
Recording Deliveries of Inventory Items and Equipment
Area of
ResponsibilitySeq.
No.Activity
Property and Supply Unit
Property/
Supply Officer1Delivery of Equipment and Inventory Items
Signs Received portion of the original and Copy 2 of the
Delivery Receipt (DR). Files the original and returns Copy 2 of the
DR to the Supplier/Procurement Service.
2Prepares Inspection and Acceptance Report (IAR) in three
copies. Forwards IAR, original of DR, and Copy 2 of approved PO
from file to Property Inspector for inspection of deliveries.
Note 1
Distribution of the IAR shall be as follows:
Original - Supplier (to be attached to the DV)
Copy 2 - Property Inspector/
Inspection Committee
Copy 3 - Property and Supply Unit file
Property Inspector3Inspects and verifies items as to quantity
and conformity with specifications based on the DR and approved PO.
If in order, signs and indicates date of inspection in the
Inspection column of the IAR. Retains copy 3 of IAR and forwards
the items and Copy 1-2 of IAR, original of DR and Copy 2 of PO to
Property/Supply Officer for acceptance.
4If specifications are not in order or delivery is not complete,
indicates notation on the IAR that the deliveries are not in
conformity with specifications agreed under the approved PO or
deliveries are not complete. Forwards the IAR to the
Property/Supply Officer.
Property/Supply Officer5Signs in Acceptance column,
acknowledging receipt of the items delivered. Checks the
appropriate box whether complete or partial (indicate quantity
received) delivery, and indicate the date of receipt and remarks,
if any.
Forwards items to Property/Supply Custodian for
safe-keeping/storage.
6Prepares DV indicating the Supplier as Payee. Attaches the
original IAR, Copy 2 of DR, PO and photocopy of PR. Forwards
documents to Budget Unit for the preparation of ALOBS. Forwards
copy 2 of IAR and copy of PO to the Property/Stock Card Keeper for
recording in the Property/ Stock Cards.
Note 2
For succeeding activities on processing of payment for delivered
inventory items and equipment, refer to Sec.15, Procedures in the
Recording of Obligations and Sec. 34 Procedures in Disbursements by
Checks.
Note 3
For purchases made through the Procurement Service (PS), the DV
shall be prepared on the basis of the Approved Agency Procurement
Request. The payment shall be made directly to the PS.
Accounting Unit
PPELC/SLC Keeper7After Payment of Deliveries
Posts necessary information to the Property, Plant and Equipment
Ledger Card (PPELC)/Supply Ledger Card (SLC) based on the paid
documents forwarded by the Cash Unit.
Sec. 46. Procedures in the Requisition and Issuance of Inventory
Items
Area of
ResponsibilitySeq.
No.Activity
Concerned Office
Requesting Personnel1Inquiry for the availability of
supplies
Prepares the Supplies Availability Inquiry (SAI) in two copies.
Accomplishes the form for item description, unit and quantity.
2Fills up the Inquired by portion of SAI and forwards the same
to Accounting Unit for processing.
Accounting Unit
Accounting Staff3Receives SAI from Requesting Personnel. Reviews
and verifies the completeness of information.
4Retrieves from file the SLC and determines availability/status
of stocks.
5Fills up the number, stock number, status of stock and Status
provided by portion of the SAI. Returns the original to the
Requesting Personnel and files Copy 2 of the SAI.
Concerned Office
Requesting Personnel6Receives the original of SAI from the
Accounting Staff. If stock is not available, prepares Purchase
Request (PR) for the item requested and forwards the same to
Property and Supply Unit for processing of the request. If stock is
available, prepares Requisition and Issue Slip (RIS) in three
copies. Fills up all the necessary information except for the
issuance portion and signs Requested by portion of the RIS.
Forwards the RIS to Authorized Official for approval.
Note 1
The RIS shall be distributed as follows:
Original - Accounting Unit
Copy 2 - Property and Supply Unit
Copy 3 - Requesting Office
Authorized Official7Signs the Approved by portion of the
RIS.
Requesting Personnel8Receives signed RIS and forwards to the
Property and Supply Unit together with the original of SAI for
withdrawal of inventory items requested.
Property and Supply Unit
Supply Officer9Reviews and verifies RIS as to completeness of
information. Fills up the RIS No./Date, and Quantity, Remarks and
initials Approved by portion of the RIS, and records RIS in the
logbook.
Head of the Property and Supply Unit10Signs the Approved by
portion of RIS and returns to the Supply Officer for issuance of
the stock.
Supply Officer11Fills up and signs the Issuance portion of the
RIS and issues inventory items requested to the Requesting
Personnel.
Concerned Office
Requesting Personnel12Receives supplies requested and sign in
the Received by portion of the RIS.
13Files permanently in numerical order Copy 2 of RIS and files
temporarily the originals of RIS and SAI for the preparation of
Report of Supplies and Materials Issued (RSMI).
14Preparation of RSMI
Retrieves the original copies of RIS and SAI from temporary
file. Checks the completeness of the RIS. If not complete, verifies
with the Supply Officer. If complete, prepares RSMI in three
copies.
15Initials in the Certified by portion of the RSMI.
Property and Supply Unit
Head of the Property and Supply Unit16Signs in the Certified by
portion of the RSMI.
Stock Card Keeper17Receives signed RSMI and forwards to
Accounting Unit the original and Copy 2 of RSMI together with
originals of RIS and SAI. Files Copy 3 of RSMI.
Accounting Unit
Accounting Staff18At the Start of the Day
Receives original and Copy 2 of RSMI, and original SAI and RIS.
Checks and verifies the completeness of information. Retrieves SLC
from file and fills up the To be filled up in the Accounting Unit
portion of RSMI. Records RSMI in the SLC.
19Signs in the Posted by/date portion of the RSMI.
20Files permanently in numerical order Copy 2 of RSMI and files
temporarily the original RIS, SAI and RSMI for recording issuance
of inventory items in the books of accounts.
21At Month End
Retrieves the original RIS, SAI and RSMI from temporary
file.
22Prepares JEV in two copies based on the RSMI to record the
issuance of stock.
23Signs in the Prepared by portion of the JEV.
Head of the Accounting Unit24Sign in the Certified Correct by
portion of the JEV.
Accounting Staff25Receives signed JEV and forwards to Bookkeeper
the JEV, RSMI, RIS, and SAI for recording in the General Journal.
Files copy 2 of JEV.
Note 2:
For succeeding activities, refer to Sec. 71, Preparation and
Submission of Trial Balances and Other Reports.
Sec. 47. Procedures in the Requisition and Issuance of
Equipment
Area of
ResponsibilitySeq.
No.Activity
Concerned Office
Requesting Personnel1Upon receipt of notice of availability of
the equipment requested, prepares RIS in three copies.
Fills up the necessary information pertaining to requisition,
except Issuance column of the RIS.
Authorized Official2Reviews RIS and signs Requested By in the
Requisition column.
Requesting Personnel3Records the signed RIS in the logbook and
indicate date, particulars and remarks. Forwards the same to
Property and Supply Unit for processing of the requisition.
Property and Supply Unit
Receiving Staff4Receives signed RIS from Requesting Office.
Records the date, particulars and Requesting Office in the logbook.
Assigns number on RIS and issues Copy 3 to Requesting Personnel for
file.
Property Officer5Verifies RIS and checks against the PR.
6Initials RIS and forwards the original and Copy 2 of RIS to the
Head of the Property and Supply Unit for review and approval.
Head of the Property and Supply Unit7Reviews RIS and signs the
Approved By portion of RIS. Forwards Copies 1-2 of RIS to Property
Custodian.
Property Custodian8Based on the approved RIS, assigns number on
the property being transferred/ issued. Indicates the number in the
RIS.
9Prepares Acknowledgment Receipt of Equipment (ARE). Indicates
the quantity, unit, description and property number of the items
being issued. Signs in the Received from and Issued by portions of
the ARE and RIS, respectively. Records the date, number and
particulars in the ARE logbook.
Note 1
ARE shall be distributed as follows:
Original -Property and Supply Unit file
Copy 2 -Recipient or user of the property file
Concerned Office
Requesting Personnel11Retrieves Copy 3 of RIS. Checks item if it
is in conformity with RIS. Signs Received By portion of original
and Copy 2 of ARE and RIS.
12Returns original ARE and Copies 1-2 of RIS to Property
Custodian/Officer for recording in the Property Card. Files Copy 2
of ARE and Copy 3 of RIS.
Supply and Property Unit
Property Officer13Files original of ARE per accountable
officer/employee and Copy 2 of RIS. Forwards the original RIS to
the Accounting Unit.
Accounting Unit
PPELC Keeper14Receives original of the RIS. Retrieves the PPELC
and posts information pertaining to issuance/transfer of
property.
E. MISCELLANEOUS TRANSACTIONS
Sec. 48. Miscellaneous Transactions. Miscellaneous transactions
are transactions types that are unique and not recurring in the
ordinary course of government operations. These seldom take place
or should not happen at all. Some of the miscellaneous transactions
are as follows:
1. Loss of Cash and Property
2. Request for Relief from Accountability
3. Cash Overage
4. Stale MDS and Commercial Checks
5. Set-up and Settlement of Disallowances
6. Refund of Overpayments
Sec. 49. Accounting for Loss of Cash and Property. Loss of cash
and property may be due to malversation, theft, robbery, fortuitous
event or other causes.
Cash shortage discovered during cash examination conducted by
auditors is reported through the Report of Cash Examination. The
Auditor issues an audit report in case of shortage in property
accountability. As soon as a shortage is definitely established,
the Auditor shall issue a memorandum pertaining thereto and the
Accountant shall draw a JEV to record the shortage as a receivable
from the Accountable Officer concerned.
In case of loss of property due to other causes like, theft,
force majeure, fire, etc., a report thereon shall be prepared by
the Accountable Officer concerned for purposes of requesting relief
from accountability. No accounting entry shall be made but the loss
shall be disclosed in the notes to financial statements pending
result of request for relief from accountability.
Sec. 50. Grant of Relief from Accountability. When a request for
relief from accountability for shortages or loss of funds is
granted, a copy of the decision shall be forwarded to the Chief
Accountant who shall draw a JEV to record the transaction. The loss
shall be debited to the Loss of Assets account and credited to the
appropriate receivable account. In case the request for relief is
denied, immediate payment of the shortage shall be demanded from
the Accountable Officer. Restitution shall be acknowledged by the
issuance of an official receipt.
In case the request for relief from accountability for loss of
property caused by fire, theft, force majeure or other causes is
granted, a copy of the decision shall likewise be forwarded to the
Chief Accountant for the preparation of the JEV. The loss shall be
debited to the Loss of Assets account and credited to the
appropriate asset account. If request for relief from
accountability is denied, the loss shall be taken up as a
receivable from the Accountable Officer or employee liable for the
loss and shall be credited to the appropriate asset account.
Sec. 51. Accounting for Cash Overage. In case the cash
examination disclosed cash overage, as determined by the Auditor
during cash examination, the amount shall be forfeited in favor of
the government and an official receipt shall be issued by the
Cashier. The cash overage shall be taken up as Miscellaneous
Income.
Sec. 52. Accounting for Stale Checks. Checks may be cancelled
when they become stale. The depository bank considers a check
stale, if it has been outstanding for over six months from date of
issue or as prescribed.
reported in the RC
A stale check shall be marked cancelled on its face and reported
as follows:
1. Unclaimed stale checks which are still with Cashier shall be
cancelled and reported in the List of Unreleased Checks as
cancelled. The List of Unreleased Checks is attached to the
RCI.
2. For stale checks which are in the hands of the payees or
holders in due course and requested for replacements, new checks
may be issued upon submission of the stale checks to the Accounting
Unit. A certified copy of the previously paid DVs shall be attached
to the request for replacement. A JEV shall be prepared to take up
the cancellation. The replacement check shall be reported in the
RCI.
Sec. 53. Accounting for Disallowances. Disallowances shall be
taken up in the books of accounts only when they become final and
executory. The Accountant shall prepare the JEV to take up the
Receivable-Disallowances/Charges and credit the appropriate expense
account for the current year or Prior Years Adjustment account if
pertaining to expenses of previous years.
Cash settlement of disallowances shall be acknowledged through
the issuance of an official receipt and reported by the Cashier in
the RCD.
Sec. 54. Accounting for Overpayments. Sometimes overpayments or
even double payment of expenditures do happen in agencies. These
could be avoided with the institution of proper controls but some
could not be avoided because of built-in procedures. One example is
the payment of payrolls. Payrolls are prepared in advance and some
agencies pay their employees through the banking system. All these
are done before reports of attendance are submitted, making it
impossible to know the exact amount to be paid in case there are
absences without pay during the pay periods. In case of
overpayments, refunds shall be demanded of the employees
concerned.
Sec. 55. Pro-forma Accounting Entries. The following are the
pro-forma accounting entries for miscellaneous transactions:
ParticularsAccount TitleAcct.
CodeDr.Cr.
1. Cash Shortage
a. Cash shortage of the Disbursing Officer
To take up cash Due from Officers and Employees128150
shortageCash-Disbursing Officers107150
b. Cash Shortage of the Collecting Officer
To take up cash Due from Officers and Employees128150
shortage Cash-Collecting Officers10650
2. Relief from Accountability for Loss of Government Funds and
Property
a. Request for Relief from Accountability Granted.
To take up relief from accountability
for current year - -
for prior years - -Loss of Assets
or
Prior Years Adjustments 948
53350
Due from Officers and Employees12850
b. Request for Relief from Accountability Denied.
To record the loss of fund by a Disbursing Officer (allegedly
thru theft ) - P150Due from Officers and Employees
Cash-Disbursing Officers128
107150150
c. Cash Settlement/Restitution in case of denial of Request for
Relief from Accountability
To take up receipt of settlementCash-Collecting Officers
Due from Officers and Employees106
1285050
To record deposit
c.1 current yearSubsidy Income from National Government60150
Cash-Collecting Officers10650
c.2 prior yearPrior Years Adjustment53350
Cash-Collecting Officers10650
3. Cash Overage
To take up cash overage discovered during cash examination
Cash Collecting Officers
Due to National Treasury
Miscellaneous Operating
and Service Income 50106
433
5050
To record depositDue to National Treasury
Miscellaneous Operating
and Service Income 5043350
Cash-Collecting Officers10650
4. Stale Checks
a. Stale MDS check issued in the current year for
replacement
Check cancellationCash-National Treasury, MDS10250
Accounts Payable40150
ReplacementAccounts Payable40150
Cash-National Treasury, MDS10250
b. Stale MDS check issued in the prior years for replacement
Check cancellationPrior Years Adjustments53350
Accounts Payable40150
ReplacementAccounts Payable40150
Cash-National Treasury, MDS10250
c. Stale commercial check issued in the current and prior years
for replacement
Check cancellationCash in Bank-Local Currency, Current
Account11050
Accounts Payable40150
ReplacementAccounts Payable40150
Cash in Bank-Local Currency, Current Account11050
5. Disallowances
a. Recording of disallowances for current years transaction
When the disallowances becomes final and executory - overpayment
of office suppliesReceivables-Disallowances/ Charges
Office Supplies Expenses138849
1010
Amount paid - P100
Should be - 90
Difference - 10
Settlement of DisallowanceCash-Collecting Officers
Receivables-Disallowances/ Charges106
1381010
Deposit of collectionSubsidy Income from National
Government60110
Cash-Collecting Officers10610
ParticularsAccount TitleAcct.
CodeDebitCredit
b. Recording of disallowance for prior years transaction
When the disallowance becomes final and executoryReceivables -
Disallowances/ Charges
Prior Years Adjustments1385331010
Settlement of disallowanceCash - Collecting Officers
Receivables - Disallowances/ Charges
106
1381010
Deposit of collectionPrior Years Adjustments53310
Cash-Collecting Officers10610
6. Refund of Overpayment
a. Overpayment taken up as receivable
To record overpayment of salaries and wages (When overpayment is
ascertained)Due from Officers and Employees
Salaries and Wages - Regular Pay128
8011010
To record receipt of refund Cash-Collecting Officers
Due from Officers and Employees106
1281010
Deposit of collectionSubsidy Income from National
Government60110
Cash-Collecting Officers10610
b. Refund of overpayment not taken up as receivable
To record receipt of refund of Salaries and Wages - Regular Pay
during the current year
Cash - Collecting Officers
Salaries and Wages Regular Pay106
8011010
Deposit of collectionSubsidy Income from National
Government60110
Cash-Collecting Officers10610
To record receipt of refund of 0verpayment in the ensuing
yearCash-Collecting Officers
Prior Years Adjustments106
5331010
Deposit of collectionPrior Years Adjustments53310
Cash-Collecting Officers10610
Chapter 4. Trial Balances, Financial Reports
and Statements
The Financial Statements Process
Sec. 56. Financial Reporting System. This Financial Reporting
System (FRS) includes the preparation and submission of trial
balances, financial statements and other reports needed by fiscal
and regulatory agencies. The sub-systems are as follows:
1. Preparation and Submission of Trial Balances and Other
Reports
2. Preparation and Submission of Financial Statements
Sec. 57. Trial Balance. The Trial Balance shows the equality of
debit and credit balances of all general ledger accounts as of a
given period. It is prepared and submitted monthly, quarterly and
annually. At the end of the fiscal year, the pre-closing and the
post-closing trial balances shall be prepared.
Sec. 58. Purposes of the Trial Balance. The trial balance is
prepared to:
1. prove the mathematical equality of the debits and credits
after posting;
2. uncover errors in journalizing and posting; and
3. serve as basis for the preparation of the financial
statements.
Sec. 59. Pre-Closing Trial Balance. The Pre-Closing Trial
Balance (Appendix 2) shall be prepared after recording the
adjusting journal entries in the General Journal and posting the
same to the General Ledger. It shows the adjusted balances of all
accounts as of a given period. This is also described as the
adjusted trial balance.
Sec. 60. Adjusting or Correcting Journal Entries. Under the
matching principle, adjustments shall be made for economic
activities that have taken place but are not yet recorded at the
time when the financial statements are prepared. Such adjusting
journal entries are made to ensure that revenues and expenses are
recorded in the period when they are earned or incurred.
Adjustments are of two main types: accrued items and deferred
items.
Sec. 61. Adjustment for Accrued Item. It is an adjusting entry
for an economic activity already undertaken but not yet recorded
into an asset and revenue accounts or a liability and expense
accounts. It requires asset/revenue adjustments and
liability/expense adjustments.
Sec. 62. Asset/Revenue Adjustment. It involves earned revenues
not yet recorded as assets and income at the end of the accounting
period. Examples are receivables for revenues already earned but
not yet collected nor billed as of the year end.
Account TitleAccount CodeDebitCredit
Interest Receivable161500
Interest Income624500
Sec. 63. Liability/Expense Adjustment. It involves expenses,
which already exist but remain unpaid at the end of the accounting
period. Examples are salaries, wages and other expenses already
incurred but not yet paid.
Account TitleAccount CodeDebitCredit
Salaries and Wages-Regular Pay8011,000
Due to Officers and Employees4281,000
Sec. 64. Adjustment for Deferred Items. These are adjusting
entries transferring data previously recorded in an asset account
to an expense account, or data previously recorded in a liability
account to a revenue account. It also requires asset/expense
adjustments and liability/revenue adjustments.
Sec. 65. Asset/Expense Adjustments. These pertain to assets,
portion of which shall be recorded as expense of the agency at the
end of the accounting period. Examples are prepaid expenses, bad
debts and depreciation.
Account TitleAccount CodeDebitCredit
Original Entry:
Prepaid Rent1611,000
Cash-National Treasury, MDS1021,000
Adjusting Entry:
Rent Expenses841900
Prepaid Rent161900
Sec. 66. Bad Debts. Trade receivables shall be valued at their
face amounts minus, whenever appropriate, allowance for doubtful
accounts. Bad Debts expense and/or any anticipated adjustments,
which in the normal course of events will reduce the amount of
receivables from the debtors to estimated realizable values, shall
be set up at the end of the accounting period.
The Allowance for Doubtful Accounts shall be provided in an
amount based on collectibility of receivable balances and
evaluation of such factors as aging of the accounts, collection
experiences of the agency, expected loss experiences and identified
doubtful accounts.
The determination of bad debts expense shall be derived from
computations based on percentages and aging of accounts receivable
as follows:
Age of Accounts Percentage
1 - 60 days
1 %
61 - 180 days
2 %
181- 1 year
3 %
More than 1 year
5 %
An adjusting journal entry to take up bad debts expense is as
follows:
Account TitleAccount CodeDebitCredit
Bad Debts9291,000
Allowance for Doubtful Accounts3011,000
Sec. 67. Depreciation for Property, Plant and Equipment. The
costs of property, plant and equipment are allocated to the periods
benefited through the provision of accumulated depreciation.
Depreciation is the systematic and gradual allocation of the
depreciable amount of asset over its useful life. The depreciable
or estimated useful life for different types of agency assets are
presented as Appendix 1.Sec. 68. Method of Depreciation.
Depreciation shall be computed using the Straight Line Method.
Depreciation shall start on the second month from purchase. A
residual value equivalent to ten percent of the cost shall be set.
Annual depreciation is computed as follows:
Annual Depreciation = Asset Cost less Estimated Residual/Salvage
Value Estimated Useful Life
Asset Cost - Purchase or Acquired Value of the Asset
Estimated Salvage Value - 10% of the asset cost
Estimated Useful Life - Estimated number of years the asset
shall be used as determined by the Commission on Audit
A sample adjusting journal entry for depreciation expense is as
follows:
Account TitleAccount CodeDebitCredit
Depreciation-Office Equipment9221,000
Accumulated Depreciation-Office
Equipment3221,000
Sec. 69. Closing Journal Entries. Closing journal entries are
general journal entries which close out the balances of all
nominal/ temporary and intermediate accounts at the end of the
accounting period. The nominal and intermediate accounts that shall
be closed at the end of the accounting period are as follows:1.
Reversion of the unused or unutilized Subsidy Income from National
Government at the end of the year due to the DBM policy that NCA
will only be valid within the year of issue except NCA for accounts
payable, which is valid one month after its issuance. There is no
need to issue an MDS Check when reverting the account.
Account TitleAccount CodeDebitCredit
Subsidy Income from National
Government601100
Cash-National Treasury, MDS102100
2. Close the balance of the Subsidy Income from National
Government account to Income and Expense Summary account.Account
TitleAccount CodeDebitCredit
Subsidy Income from National
Government6011,000
Income and Expense Summary5321,000
3. Close the balance of all income accounts to Income and
Expense Summary account.Account TitleAccount CodeDebitCredit
Income from Government Services611500
Income from Government Business Operations612400
Income and Expense Summary532900
4. Close the balance of all expense accounts to Income an
Expense Summary account.Income and Expense Summary532800
Salaries and Wages-Regular Pay801800
5. Close the balance of the Income and Expense Summary Account
to the Retained Operating Surplus account.Income and Expense
Summary5321,100
Retained Operating Surplus5341,100
5. Close the balance of the Prior Years Adjustments account to
Retained Operating Surplus account6. .Prior Years
Adjustments533200
Retained Operating Surplus534200
6. Close the balance of the Retained Operating Surplus to
Government Equity account. Retained Operating Surplus5341,300
Government Equity5011,300
7. Close Public Infrastructures or Reforestation Projects
accounts to Government Equity account and transfer the
corresponding amounts to the respective registries. Government
Equity501 1,300
Public Infrastructures/
Reforestation Projects 243/
2441,300
Sec. 70. Post-Closing Trial Balance. The Post-Closing Trial
Balance (Appendix 3) shall be prepared after recording the closing
journal entries in the General Journal and posting to the General
Ledger. It contains a listing of all general ledger accounts that
remain open after the closing process is completed.
Sec. 71. Procedures in the Preparation and Submission of Trial
Balances and Other Reports
Area of
ResponsibilitySeq.
No.Activity
Preparation of Unadjusted Trial Balance
Accounting Unit
Bookkeeper1Records JEVs for the month in the Special Journals
and General Journal.
2Posts the journal entries from the Special Journals and General
Journal to the respective General Ledgers.
3Records the source/summarizing documents to the respective
Subsidiary Ledgers.
Note 1
The summarizing/source documents are the following:
Report of Checks Issued (RCI)
Report of Collections and Deposits (RCD)
Report of Disbursements (RD)
Journal Entry Voucher (JEV)
Disbursement Voucher (DV)
Other Supporting Documents (OSD)
4Foots and extracts the balances of the General Ledgers and
Subsidiary Ledgers.
5Based on the General Ledgers, prepares the Unadjusted Trial
Balance (UTB) to check the postings made on the General Ledgers or
the equality of debit and credit balances of the general ledger
accounts. Files temporarily.
Preparation of Pre-Closing