INTRODUCTION

The accounting information system sets the process by which a firm abides with in the

form of business cycles which includes the revenue, disbursement and payroll cycles. This is the

basis of the different internal controls to be implemented. It also includes the accounting process

it follows including the accounts to be kept.

I. Chart of Accounts

ACCOUNT ACCOUNT CODE

ASSETS

Cash and Cash Equivalents 110

Office Supplies 130

Office Equipment 210

Accu. Depreciation-Office Equipment 211

Furniture and Fixtures 220

Accu. Depreciation-Furniture and Fixtures 221

LIABILITIES

Income Tax Payable 310

SSS, PhilHealth and Pag-ibig Contributions Payble 320

Withholding tax Payable 330

Net Value Added Tax (VAT) Payable 340

Partner A, Capital 410

Partner A, Drawing 411

B, Capital 420

B, Drawing 421

C, Capital 430

C, Drawing 431

D, Capital 440

D, drawing 441

INCOME

Service Income 510

Interest Income 520

EXPENSES

Salaries Expense 610

SSS, Philhelth and Pag-ibig Contributions Expense 620

Rent Expense 630

Depreciation Expense 640

Utilities Expense 650

Office Supplies Expense 660

Taxes and Licenses 670

II. Nature of Accounts

A. Balance Sheet Accounts

Assets refer to the economic resources of an agency that are recognized and

measured in conformity with generally accepted accounting principles (GAAP). An asset

is any owned physical object (tangible) or right (intangibles) with economic value that is

expressed, for accounting purposes, in terms of its cost or some other value. These other

values include revalued amounts, current cost, net realizable value, fair value and

recoverable amounts.

Cash Equivalents

These are short term and highly liquid investments that are readily

convertible into cash and so near their maturity that they present

insignificant risk of changes in interest rates.

1. Petty Cash Fund

This account is used to record the amount granted to duly

designated petty cash custodian for payment of authorized petty or

miscellaneous expenses which cannot be conveniently paid through

checks. Credit this account every time there is a change of Petty cash

custodian and at year end for refund and liquidation of cash advance.

2. Cash on hand
 This includes undeposited cash collections and other items

awaiting deposit such as customers checks, cashiers or managers

checks, travelers check, bank drafts and money orders.

3. Cash in Bank

This includes demand deposit or checking account and saving

deposit which are unrestricted as to withdrawal.

Office Supplies

This account is used to record the cost or value of

purchased/acquired office supplies such as bond papers, inks, and small

tangible items like staple wire removers, punchers, staplers, and other

similar items for government position.

Office Equipment

1. Office Equipment

This account is used to record the cost incurred in the purchase or

assembly of fair value, if acquired through donation or transfers without

cost, of office equipment for use in government operations. It includes

duplicating/photocopying machines, air conditioning units and the like.

2. Accumulated Depreciation-Office Equipment

Represents the allocation of cost of office equipment in accordance

with the prescribed policy on depreciation and upon disposal or

derecognition of the asset.

 Furniture and Fixtures

1. Furniture and fixtures

This account is used to record the cost of acquisition or assembly,

or fair value, if acquired through donation of transfers without cost, of

furniture and fixtures for use in government operations.

2. Accumulated depreciation-Furniture and fixtures

This account is credited for the allocation of cost furniture and

fixtures in accordance with the prescribed policy on depreciation. Debit

this account upon disposal or derecognition of the asset.

Liabilities refer to the economic obligations of an agency that are recognized and

measured in conformity with accounting principles. Liabilities include certain deferred

credits that are not obligations, but which are nonetheless recognized and measured

according to accounting principles as outlined in Philippines Public Sector Accounting

Standards.

Income Tax Payable

Comprised of taxes that must be paid to the government within one

year. Income tax payable is calculated according to the prevailing tax law

in the company's home country.

SSS, Philhealth Payable

This are government contributions to be remitted to each agency

every quarter of the year.

Withholding Tax Payable

 This is a tax withheld from the salary of the employees to be

remitted to the government for income tax purposes.

Net Value Added Tax (VAT) payable

A form of consumption tax imposed on services actually borne by

the customers collected for the government. Computed as the

difference between the input and output taxes of the firm.

Expenses are decreases in economic benefits during the accounting period in the

form of outflows or depletions of asset or incidences of liabilities that result in decreases

in equity other than those relating to distributions to equity participants. These are

decreases in owners equity resulting from cost of goods and services used up in the

course or earning revenues.

Salary Expense

Refers to the compensation or remuneration in whatever form

given to employees for the services they render to the firm.

SSS, PhilHealth and Pag-ibig Contributions Expense

This refers to the employers share in the contributions of the

employees to the agencies namely SSS, PhilHealth and Pag-ibig based on

the contribution tables.

Rent Expense
 This refers to charges on the right to occupy shop or office space

or enjoy the use of other properties or assets.

Depreciation Expense

This refers to the portion of the total cost of fixed assets allocated

to current operations.

Utilities Expense

This refers to the cost of electricity, water and communications

consumed during the period.

Office Supplies Expense

This refers to the used up portion of office supplies.

Taxes and Licenses

This refers to business taxes, licenses, and other fees due to the

government.

Organizational Cost

It refers to the costs incurred to for registration and the like to

prepare the firm for operations.

Income refers to the gross inflow of economic benefits or service potential during

the reporting period, when those inflows result in an increase in net assets/equity, other

than increases relating to contributions from owners. The term income is broader than

revenue and includes gains in addition to revenue.

 Service Revenue

Revenue earned from rendering services

Interest Revenue

Revenue derived from investment in banks.

Equity refers to the residual interest of the government in an agency, which is the

excess of the assets over its liabilities.

Capital

This is the total of the initial and additional contributions made by

the owner which is increased by profits and decreased by losses and

owners withdrawals.

Withdrawals/Drawings

Represents cash or other assets taken by the owner for personal

use.
 Purchasing Supplies and Services

Employees from all departments can initiate the acquisition of goods

and services by preparing a pre-numbered purchase requisition slip/supply

withdrawal slip obtaining the managers signature of approval, and sending

the requisition/withdrawal slip to the utility clerk. The utility clerk checks the

availability of the supply and releases if supply is available. If not, the utility

clerk sends the purchase requisition to the cashier together with a cash

advance slip containing the estimated amount of purchases after consulting an

approved list the manager has approved.

Purchases of office equipment, and furniture and fixtures require the

authorization of all or at least two partners with the manager approving

specific purchases related to the partners authorized plan. However, the

acquisition of services such as space rental and utilities can be handled by the

utility clerk or assigned to specific individuals who are authorized to approve

such acquisition.

On receiving the property approved purchase requisition and the cash

advance slip, the utility clerk personally shop for the goods and services. The

utility clerk prepares a pre-numbered purchase order. The utility clerk reviews the

information recorded to determine that the appropriate vendor has been selected,

signs the purchase order and personally goes to the supplier vendor.

All documents pertaining to purchases are accumulated by the cashier to

provide evidence that the appropriate purchasing procedures were followed. Any
 excess from the cash advance made must be remitted to the cashier together with

a remittance slip accompanied by other documents.

Receiving Supplies

To maintain control of goods on their acceptance from a vendor, the

utility clerk should inspect them, count them, and prepare a receiving report.

The clerk should record on the receiving report the supplier or vendors

name, the purchase order number, the vendors invoice number, the date of

receipt, description and quantity of goods and the prices at which it was

purchased including all discounts if any. The receiving report must be signed

by the utility clerk and sends it to the cashier.

The goods are transferred to the storeroom if they are normal stock

items or to the ordering department, if they are not.

B. Revenue Cycle

Collection of Payment

The cashier shall receive the order and computer the amount due

based on the information the customer wants to order.

The cashier shall record the transaction manually on a pre-numbered

official receipts (2 copies). One copy shall be issued to the customer and the

other shall be kept by the cashier for bookkeeping purposes.

C. Payroll Cycle

Segregation of duties in adding an employee to or removing an employee from the

payroll and the initial pay rate or subsequent changes, recording and maintaining accurate

time sheets, preparing payroll and paying employees and payroll taxes. Wage is

determined by the contract approved by the HR officer.

Finger print time recorder is used to record worked time. Time sheets or time

cards should be signed by the employee; then reviewed and approved by the managing

partner. The data from the time recorder shall be recorded on payroll registers serially

numbered.

Payroll cash voucher is signed by one of the partners and is accompanied by the

payroll summary. Payroll cash vouchers are given to the employees and safekeeping of

unclaimed wages and are being controlled by the managing partners. Blank payroll check

is being safeguard.

HR and employee earning records are kept in locked files and electronic files are

safeguard with passwords.

IV. Business Books and Forms

A. Purchase Requisition Slip/Withdrawal Slip

PURCHASE REQUISITION/WITHRAWAL SLIP

Bookworm Caf Ground

KM6 La Trinidad, Benguet
Tel/Cp No.

QUANTITY UNIT Description

Date Prepared Date Approved

B. Purchase Order

PURCHASE ORDER

Bookworm Caf Ground

KM6 La Trinidad, Benguet
Tel/Cp No.

Date: No.

To:

Terms:

Please furnish us with the following articles at the price and terms within 3 working days.

QUANTITY UNIT DESCRIPTION UNIT PRICE TOTAL

Prepared by:

Received by:

Approved by:
C. Cash Advance Slip

CASH ADVANCE SLIP

Bookworm Caf Ground

KM6 La Trinidad Benguet
Tel/Cp No.

Date:

Requested by:

AMOUNT PURPOSE

Approved by:

Issued by:

Date Issued:
D. Stock Card

STOCK CARD

Bookworms Caf Ground

KM6 La Trinidad, Benguet
Tel/Cp No.

Item Description:

DATE SIGNATURE IN OUT

Balance:
E. Receiving Report

RECEIVING REPORT

Bookworm Caf Ground

KM6 La Trinidad, Benguet
Tel./Cp No.

Vendor

No PO No Vendor Invoice Description Quantity Price

No

___________________ _______________________

Receiving Employee Cashier

F. Official Receipt

OFFICIAL RECEIPT

Bookworm Caf Ground

KM6 La Trinidad, Benguet
Tel./Cp No.

Date: No.
Name:
Address:
DESCRIPTION AMOUNT

TOTAL

Cash Amount __________________

Amount __________________
Check
TOTAL____________________
Prepared by:

_____________________

Cashier
G. General Journal

Bookworm Caf ground

KM6 La Trinidad, Benguet
Tel./Cp No.

GENERAL JOURNAL

DATE PARTICULARS PR DEBIT CREDIT

1 1
2 2
3 3
4 4
5 5
6 6
7 7
8 8
9 9
10 10
11 11
12 12
13 13
14 14
15 15
16 16
17 17
18 18
19 19
20 20
H. General Ledger

Bookworm Caf ground

KM6 La Trinidad, Benguet
Tel./Cp No.

GENERAL LEDGER

PARTICULA P
DATE RS R DEBIT CREDIT BALANCE
1 1
2 2
3 3
4 4
5 5
6 6
7 7
8 8
9 9
1 1
0 0
1 1
1 1
1 1
2 2
1 1
3 3
1 1
4 4
1 1
5 5
1 1
6 6
1 1
7 7
1 1
8 8
1 1
9 9
2 2
0 0