submission of stale checks to the accounting unit. A certified copy of thepreviously paid DVs shall be attached to the request for replacement. A JEV shallbe prepared to take up the cancellation. The replacement check shall be reportedin the RCI.
Accounting for Disallowance
. Disallowances shall be taken up in the booksof accounts only when they become final and executory. The accountant shall preparethe JEV to take up the Receivable-Disallowance/Charges and credit the appropriateexpense account for the
current year or Prior Year’s Adjustment account if pertaining to
expenses of previous years.Cash settlement for disallowances shall be acknowledged through the issuanceof an official receipt and reported by the cashier in the RCD.
Accounting for overpayments.
Sometimes overpayments or even doublepayments of expenditures do happen in agencies. These could be avoided with theinstitution of peroper controls but some could not be avoided because of built-inprocedures. One example is the payment of payrolls. Payrolls are prepared in advanceand some agencies pay their employees through the banking system. All these aredone before reports of attendance are submitted, making it impossible to know theexact 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.
TRIAL BALANCES, FINANCIAL REPORTS AND STATEMENTS
Financial Reporting System. This financial Reporting System (FRS) includes thepreparation and submission of trial balances, financial statements and other reportsneeded by fiscal and regulatory agencies. The sub-systems are as follows:1. Preparation and Submission of Trial Balances and Other Reports2. Preparation and Submission of Financial StatementsThe
shows the equality of debit and credit balances of all generalledger accounts as of a given period. It is prepared and submitted monthly, quarterly andannually. At the end of the fiscal year, the pre-closing and the post-closing trial balancesshall be prepared.Purposes of the Trial Balance. The trial balance is prepared to:1. prove the mathematical equality of the debits ad credits after posting;2. uncover errors in journalizing and posting; and3. serve as basis for the preparation of the financial statements
The Pre-closing trial balance
shall be prepared after recording the adjusting journalentries in the General Journal and posting the same to the General Ledger. It shows theadjusted balances of all accounts as of a given period. This is also described as theadjusted trial balance.
Adjusting or Correcting Journal Entries
. Under the matching principle, adjustmentsshall be made for economic activities that have taken place but are not yet recorded atthe time when the financial statements are prepared. Such adjusting journal entries are