Government Accounting Midterm

ACCOUNTING FOR DISBURSEMENT
Disbursements
constitute all cash paid out during a given period either in
currency or by check.
the settlement of government payables/obligations by cash
or by check.
Disbursement system involves the preparation and
processing of disbursement voucher, preparation and
issuance of check; payment by cash; granting, utilization and
liquidation/replenishment of cash advances.
Types of Checks
1. Modified Disbursement System Checks issued by
government agencies chargeable against the account of
the Treasury of the Philippines, which are maintained with
different MDS Government Servicing Banks.
*Notice of Cash Allocation authorization issued by the
Department of Budget and Management 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
government servicing banks.
Disbursement by Cash
Advances for Payroll account debited for the amount
granted to regular disbursing officer for payment of salaries,
wages, honoraria, allowances and other personnel benefits.
Advances to Officers and Employees used to record
amount advanced to officers and employees for official travel
and credited the same for liquidation of advances.
Due from Officers and Employees used to record claims
from these officers and employees for overpayment, cash
shortage, loss of assets and other bills issued by the agency
and credited the same for collection of the receivables.
Disbursement through Petty Cash Fund
Imprest system system used in maintaining the Petty
cash fund.
Petty cash fund fund used for the non-recurring,

emergency and petty expenses of the agency.
Inventory Accounting System
Asset Method method to be followed in recording
disbursement when expenditures apply to more than just the
accounting period.
Semi-expendable items taken up as fixed assets or
inventory depending on the nature of the items.
Perpetual Inventory Method system used in tracking the
quantity of the inventories on hand.
Moving Average Method
method of costing used for costing the inventories.
method of calculating the cost of inventory on the basis of
weighted average on the date of issue.
used to provide a new unit cost after each purchase and/or
when items are issued/used.
Purchase and Construction of Fixed Assets
*Fixed assets are charge against capital outlay.
Construction Period Theory
Construction Period Theory
theory to be followed in recording the fixed assets acquired
through construction.
all expenses incurred during the construction period shall
be capitalized.
Liquidated damages amount charged to the contractor
for delayed completion of the project and to be deducted
from the total cost.
Infrastructure Assets
Infrastructure Assets assets for use of the general public
Construction in Progress account used to record the
costs for the construction.
Guaranty/Security Deposits Payable account used to
record performance bonds and retention fee.
General Repair/Construction of Fixed Assets by
Administration
Revenue expenditures expenditure that benefits only the
current period and therefore reported as an expense.
Capital expenditures expenditure that benefits the
current and future period and therefore reported as an asset.
Construction Materials Inventory account used to

record the materials purchased for the construction or
general repair of fixed assets.
Advances to Special Disbursing Officer used to record
the amount granted to agencys accountable officers and
employees for special purpose/time-bound undertakings to
be liquidated within specific period.
JOURNAL ENTRIES FOR DISBURSEMENT AND RELATED
TRANSACTIONS
1. MDS Checks
NCA is received
Cash MDS, Regular
Subsidy from National Government
Payment of Payable
Accounts Payable
Cash MDS, Regular
2. Commercial Checks
Collection of Income
Cash Collecting Officer
Income
Record deposit
Cash in Bank LC, current account
Payment of Expenses
Expense
Cash in Bank LC, current account
3. Cash advance for payroll (RAOMO)
Record grant of cash advance to disbursing officer
Advances for Payroll
Cash MDS, Regular
Record liquidation of cash advances and expenses
Salaries and wages regular pay
Personal Economic Relief Allowance (PERA)
Due to GSIS
Due to BIR
Due to Pag-Ibig
Due to PhilHealth
Remittance of Tax
Due to BIR

4. Cash advances for Travel (RAOMO)
Record cash advances granted for travel
Advances to Officers and Employee
Cash MDS, Regular
Record liquidation of cash advance-travel
Travelling expenses local
Record refund of cash advance travel (Excess of cash
advance)
5. Disbursements through Petty Cash Fund (RAOMO)
Record establishment of Petty Cash Fund
Petty Cash
Cash MDS, Regular
No replenishment before year end
Expense
Petty Cash
Replenishment in ensuing year
Petty Cash
Cash MDS, Regular
Replenishment before year end
Expense
Cash MDS, Regular
6. Inventory (RAOMO)
Record payment of the purchase order previously
obligated
Inventory/ Accounts Payable
Due to BIR
Cash MDS, Regular
Remittance of tax
Due to BIR
Record issuance of inventory
Expense
Inventory
7. Purchase and Construction of Fixed Assets
(RAOCO)
Record NCA received
Cash MDS, Regular
Record obligation incurred for the purchase of

equipment
Equipment
Accounts Payable
Record full payment of the equipment
Accounts Payable
Due to BIR
Cash MDS, Regular
Remittance of tax
Due to BIR
8. Construction of Fixed Assets (RAOCO)
Record NCA received
Cash MDS, Regular
Record payment of mobilization fee to the contractor
Advances to Contractors
Cash MDS, Regular
Record receipt of first billing
Construction in Progress Bldg. and other structures
Advances to Contractors (mobilization fee)
Accounts Payable
Record payment of first billing
Accounts Payable
Due to BIR (10% of CIP)
Cash MDS, Regular
Record receipt of second/final billing
Accounts Payable
Record full payment
Accounts Payable
Cash MDS, Regular
Take up fixed asset completed in the books
Building
Remittance of tax
Due to BIR
9. Infrastructure Assets (RAOCO)
Record NCA received
Cash MDS, Regular
Record receipt of performance bond

Guaranty/Security Deposit Payable
Record payment of mobilization fee to the contractor
Advances to Contractors
Cash MDS, Regular
Record receipt of first billing
Construction in Progress Infrastructure
Advances to Contractors (mobilization fee)
Accounts Payable
Record payment of first billing
Accounts Payable
Guaranty/Security Deposit Payable (% of Retention Fee)
Cash MDS, Regular
Record receipt of second/final billing (net of Liquidation
Damages)
Accounts Payable
Record full payment
Accounts Payable
Cash MDS, Regular
Record turn over and acceptance of Roads
Road Networks
Record refund of performance bond
Cash MDS, Regular
Record refund of retention fee
Cash MDS, Regular
Remittance of tax
Due to BIR
10.
General Repair / Construction of Fixed Assets
by Administration (RAOCO)
Record NCA received
Cash MDS, Regular
Record receipt of construction materials with the charge
invoice
Construction Material Inventory
Accounts Payable
Record payment of materials, net of 10% WTax

Accounts Payable
Due to BIR
Cash MDS, Regular
Record issuance of materials for use in the construction
Construction Material Inventory
Record cash advance (net 10% WTax) granted to
disbursing officer
Advances to Special Disbursing Officer
Cash MDS, Regular
Record liquidation of cash advance by disbursing officer
Due to BIR
Advances to Special Disbursing Officer
Remittance of tax
Due to BIR
If NCA was not reduced by TRA
Due to BIR
Cash MDS, Regular
Take up the asset account in the books
Buildings
ACCOUNTING FOR INCOME AND COLLECTIONS

Receipts/Income Collections and Deposits System
covers the processes of acknowledging and reporting
income/collections, deposits of collections with Authorized
Government Depositary 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.
Income
Government income represents all funds received by the
government from taxes, grants, aids and borrowings
Government revenue represents funds received which do
not increase any liabilities or reserves of the government.
Two General Classification of Income:
1. Tax revenue encompasses all taxes imposed on
taxable income, properties, and use or sale of goods and
services, taxes on international trade and transactions

and other taxes including fines and penalties.
2. General income encompasses all types of
revenue/income generated by government agencies in
the exercise of their administrative and regulatory
function, income from public enterprises/investments and
income from grants and donations including subsidies.
Methods of Accounting for Income
1. Accrued method used by national government
agencies when income is realized during the accounting
period regardless of cash receipt.
2. Modified accrual income is recorded as Deferred
Credits to Income and to be recognized upon receipt of
collection.
3. Cash basis used for all other taxes, fees, charges and
other revenue where accrual method is impractical.
Other Receipts of
NGA
1. Refund of Cash
Advances
Accounts to be Used
2. Receipts of
Performance/Bidde
rs/Bail Bonds
3. Refund from
Overpayment of
Expenses
4. Collections Made
on Behalf of
Another
Agency/Private
Companies
5. Inter-agency
Transfer Funds
Advances to Officers and

Employees (for travel
purposes)
Advances for Payroll (for
salaries)
(for cash/checks)
Guaranty Deposits (for
surety bonds)
Appropriate expense (if
paid in same year)
Prior Year Adjustments (if
paid in ensuing year)
Due to .. (if w/o
authorization)
Other Payables (if
authorized)
Due to.
Types of Collections
Head of the Office
responsible for the collection and accounting of all
revenues and receipts if the agency.
duty is to take all reasonable steps to minimize the risk of
losses, defalcation, and other types of irregularities.
1. Without Authority To Use
Record collections made
Income tax
Record remittance to Bureau of Treasury through bank
Book of Agency
Income tax
Book of BoT
Cash in Bank LC, Savings account
Income tax
2. With Authority To Use
Regular Agency Books the book where collections with
authority to use is to be recorded.
Examples of collections that can be used:
a. Fees collected for seminars, trainings and conferences
conducted
b. Proceeds from sale of official publications
c. Services fee collected from GSIS, HDMF, PHIC, Mutual
Benefits associations/cooperative
d. Excess income realized and deposited with the BTr.
Record issuance of bill for the rent of an office space
Accounts Receivable
Rent/ Lease income
Record collection
Accounts Receivable
Record deposit in the bank
Cash in Bank LC, Current account
Record disbursement for the repair
Repairs and Maintenance Bldg. and other structures
3. Authority With Limitations

Record collection of seminar fees
Seminar/ Training Fees
Record deposit of collections
Record payment of expenses
Expenses
Close the accounts in Regular Agency books for the
transfer to a separate book
Seminar and training fees
Expenses
Record transfer in a separate book
Record remittance of excess to Bureau of Treasury
through bank
Book of Agency
Book of BoT
4. Income from sale of equipment
Record sale of equipment
Accumulated Depreciation Equipment
Equipment
Gain on Sale of PPE
Record remittance of collection to Bureau of Treasury
through bank
Book of Agency
Gain on sale of PPE
Accumulated Surplus/ Deficit
Book of BoT
Gain on sale of PPE
Accumulated Surplus/ Deficit

Record NCA allocated, net of TRA
Cash MDS, Regular
Record accounts payable for the equipment delivered
Equipment
Accounts Payable
Record full payment of obligation
Account Payable
Due to BIR
Cash MDS, Regular
Remittance of withholding tax through TRA
Due to BIR
5. Grants And Donations Intended For Agency
Special Allotment Release Order (SARO) agencys
additional allotment
Notice of Cash Allocation agencys additional subsidy
income from the national government.
Record the receipt of grant from Donor
Income from Grants and Donations in Cash
Record remittance to the Bureau of Treasury through
bank
Book of Agency
Book of BoT
MISCELLANEOUS TRANSACTIONS
Miscellaneous Transactions
Transaction types that are unique and not recurring in the
ordinary course of government operations.
Transactions that seldom take place or should not happen
at all.
Examples of Miscellaneous Transactions
1. Loss on cash and property
2. Request for relief from accountability

3. Cash overage
4. Stale MDS and commercial checks
5. Cash settlement of disallowances
6. Settlement of charges
7. Refund of overpayments
8. Refund of cash advance
9. Inter-agency transferred funds
10.Dishonored checks
11.Performance bonds
ACCOUNTING FOR LOSS OF CASH AND PROPERTY
Shortage in cash, may be due to:
1. Malveration
2. Robbery
3. Theft
4. Fire
Report of Cash Examination a document where cash
shortage discovered during cash examination conducted by
auditors is reported.
Audit report if there is shortage in property.
Fidelity bond bond issued by the Bureau of Treasury for
properly bonded officer.
Report of Collection / Report of Disbursement a report
to be prepared by the defaulting officer if there is any
shortage.
GRANT OF RELIEF FROM ACCOUNTABILITY
Loss of Assets an account to be used when relief from
accountability is granted.
ACCOUNTING FOR CASH OVERAGE
Other Service Income an account to be used for the
amount of cash overage forfeited in favor of the government.
STALE MDS AND COMMERCIAL CHECKS
Stale check a check that has been outstanding for over six
months from date of issue or as prescribed.
Types of Stale check
1. Unclaimed stale checks which are still with the Cashier
2. Stale checks which still in the hands of the payees or
holders in due course
List of Unreleased checks a report, which is attached to

the Report of Checks Issued, where unclaimed stale
checks which are still with the Cashier is to be reported.
Accumulated surplus/deficit
used to record the cumulative results of normal and
continuous operations of an agency including prior period
adjustments, effect of changes in accounting policy and other
capital adjustments.
used to close the revenue and expense summary account.
CASH SETTLEMENT OF DISALLOWANCES
Receivable Disallowance Charges - a receivable
account where disallowed payments which become final and
executory is to be recorded.
REFUND OF CASH ADVANCE
Cash advances usually granted to the Regular or Special
Disbursing Officers for salaries and wages or labor payroll for
projects undertaken by administration and to officers and
employees for official travel.
Advances to Officers and Employees an account used
for cash advances for official travel granted to the
officials/employees concerned.
Advances for Payroll an account used for cash advances
for salaries and wages granted to Regular Disbursing
Officers.
INTER-AGENCY TRANSFERRED FUNDS
Inter-agency transferred funds a transfer of cash from
another agency to implement the project of another agency.
DISHONORED CHECKS
Dishonored checks collections not accepted by the bank
upon deposit.
PERFORMANCE BONDS
Performance bonds
A trust receipt.
required by the agency from contractors/suppliers to ensure
performance of contracts.
Trust Receipt collections from non-income sources
authorized by law for specific purposes, which are
collected/received by a government officer or agency acting
as a trustee, agent or administrator or which have been
received as guaranty for the fulfilment of an obligation and
all other obligations classified by law or regulations as trust

receipts.
Forms of Performance Bonds
1. Cash
2. Certified check
3. Surety
Guaranty Deposits - an account used to record deposits,
subject to refund, made to secure compliance with certain
requirements in a transaction.
JOURNAL ENTRIES
1. Accounting for Loss of Cash and Property
To record the discovery of cash shortages
Due from Officers and Employees
Cash Collecting officers
To record restitution of shortage and issuance of official
receipt
To record remittance to the Bureau of Treasury
Book of Agency
Other Service Income
Cash Collecting officer
Book of BoT
Cash in Bank LC, Savings Acct.
2. Grant of Relief from Accountability
To record loss of office equipment due to theft
Accumulated Depreciation
Office Equipment
To record grant of relief from accountability
Loss of Assets
*In case of denial of request for relief of accountability:
To record the receipt of settlement
To record deposit to the Bureau of Treasury
Book of Agency
Book of BoT

3. Accounting for Cash Overage
To record forfeited cash overage
To record deposit to the Bureau of Treasury
Book of Agency
Book of BoT
4. Stale MDS and Commercial Checks
*From Previous year
To record cancellation of stale check
Accumulated Surplus/Deficit
Accounts Payable
To record receipt of NCA for prior year account
Cash MDS, Regular
To record issuance of a new check
Accounts Payable
Cash MDS, Regular
*From Current year
To record cancellation of stale of check
Cash MDS, Regular
Accounts Payable
To record issuance of a new check
Accounts Payable
Cash MDS, Regular
5. Cash Settlement of Disallowance
*From Previous Year
*Disallowance is not recorded in books
To record collection of settlement
Book of Agency
Book of BoT
*Disallowance was taken up as receivable

Receivable Disallowance/Charges
Book of Agency
Book of BoT
*Overstatement of expenses pertains to the Current Year
Accounts Receivable
Book of Agency
Book of BoT
6. Settlement of Charges
*Disallowance is made during Prior Year while
Settlement in the Current Year
To record the additional charges
To record cash settlement of disallowance
*Disallowance and Settlement is made during the
Current Year
To record the additional charges
To record cash settlement of disallowance
7. Refund of Overpayment
*Receivable account for the refund of overpayment was
set up
To record overpayment of salaries and wages
Salaries and wages Regular

To record receipt of refund of overpayment
Book of Agency
Book of BoT
Cash in Bank LC, Current Acct.
*Receivable account for the refund of overpayment was
not set up
To record receipt of refund of overpayment
Salaries and wages Regular
Book of Agency
Book of BoT
8. Refund of Cash Advance
To record the issuance of official receipt for the refund of
salaries
To record the issuance of official receipt for the refund of
travel expense
Advances to Officers and Employees
To record remittance to Bureau of Treasury
Book of Agency
*If granted during the current year
*If granted in prior year
Book of BoT
9. Inter Agency Transferred Funds

To record cash transferred to Agency IA from Agency SA
Book of SA
Due from National Government Agency (IA)
Cash MDS, Regular
Book of IA
Due to National Government Agency (SA)
To record remittance to Bureau of Treasury
Book of IA
Due from National Government Agency (BoT)
Book of BoT
To record receipt of NCA
Cash MDS, Regular
To record expenses incurred and paid
Land Improvement, Reforestation
Cash MDS, Regular
To record submission of report to Agency SA
Book of IA
Land Improvements, Reforestation
Due from National Government Agency (IA)
Book of SA
Land Improvements, Reforestation
10.
Dishonored Checks
To record dishonored checks
Book of Agency
Other Receivables
Book of BoT
To record the collection of receivable (dishonored
checks)
Other Receivables
To record remittance/re-deposited dishonored check
Book of Agency
Book of BoT
11.
Performance Bonds
*In the form of cash or certified check
To record the receipt of performance bond
Guaranty/ Security Deposits Payable
Book of Agency
Book of BoT
Due to National Government Agency
To record receipt of NCA for the release of performance
bond
Book of Agency
Cash MDS, Regular

Book of BoT
Due to National Government Agency
To record the release of performance bond upon
completion of the project
Cash MDS, Regular
*In the form of surety bonds
To record the receipt performance bond
Guaranty Deposits
To record the release of performance bond upon
completion of the project
Guaranty Deposits

Government Accounting Midterm

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Government Accounting Midterm

Uploaded by

Copyright:

Available Formats

ACCOUNTING FOR DISBURSEMENT

Petty cash fund fund used for the non-recurring,

Construction Materials Inventory account used to

Subsidy from National Government

Record obligation incurred for the purchase of

Record receipt of performance bond

Record payment of materials, net of 10% WTax

ACCOUNTING FOR INCOME AND COLLECTIONS

services, taxes on international trade and transactions

Advances to Officers and

3. Authority With Limitations

Accumulated Surplus/ Deficit

2. Request for relief from accountability

List of Unreleased checks a report, which is attached to

all other obligations classified by law or regulations as trust

Other Service Income

*Disallowance was taken up as receivable

Salaries and wages Regular

9. Inter Agency Transferred Funds

Cash MDS, Regular

You might also like