GOVERNMENT

ACCOUNTING
SECTION 109 OF  Government Accounting encompasses the
process of analyzing, recording, classifying,
PRESIDENTIAL summarizing and communicating all
transactions involving the receipt and
DECREE 1445 : disposition of government fund and property
and interpreting the result thereof.
FINANCIAL STATEMENTS

 Statement of Financial Position

 Statement of Financial Performance
 Statement of Changes in Net Assets
 Statement of Cash Flows
 Statement of Comparison of Budget and Actual Amounts
 Notes to the Financial Statements
SUBJECTS OF  National Government

GOVERNMENT  Local Government

 Government Owned or Development Controlled
ACCOUNTING Corporations
 Offices charged:

ACCOUNTING Commission on Audit (COA)

RESPONSIBILITY
Department of Budget and Management
(DBM)

Bureau of Treasury (BTr)

 1. Accrual Accounting

BASIC 2. One Fund Concept

STANDARDS 


2.1 General Fund
2.2 Special-Purpose Fund
AND POLICIES 3. Government Budget
4. Revenue Fund
  Fair Representation
OBJECTIVES OF  Going Concern

GENERAL  Consistency of Presentation

PURPOSE OF 


Materiality and Aggregation
Offsetting
FINANCIAL  Comparative Information

STATEMENTS  Compliance with PPSAS

 Departure from PPSAS
 UNIFIED
ACCOUNTS CODE
STRUCTURE
( UACS )
 1. FUNDING SOURCE (8 DIGITS)
 a. Fund Cluster (2-digit code)
 b. Financing Source (1-digit code)
 c. Authorization Code (2-digit code)
 d. Fund Category Code (3-digit code)

KEY ELEMENTS
OF UACS 2. ORGANIZATION CODE (12 DIGITS)
 a. Department Code (2-digit code)
 b. Agency Code (3-digit code)
 c. Operating Unit Classification (2-digit
code)
 d. Lower Level Operating Unit (5-digit
code)
 3. LOCATION CODE ( 9 DIGITS )
 a. Region (2-digit code)
 b. Province (2-digit code)
 c. City/Municipality (2-digit code)
 d. Barangay (3-digit code)

KEY ELEMENTS OF 4. MFO/PAP ( 15-DIGITS )

UACS  a. Sector/Horizontal Outcomes (5-digit code)

 b. Program/Project (1-digit code)
 c. MFO/Project Category (2-digit code)
 d. Activity Level 1/Project Sub-Category (2-digit
code)
 e. Activity Level 2/Project Title (5-digit code)
 5. OBJECT CODE (10
DIGITS)

KEY
a. Revised Chart of
ELEMENTS Accounts (8-digit code)
OF UACS
b. Sub-Object Code (2-
digit code)
FUNDING SOURCE
CODES FUND FUND CLUSTER DESCRIPTION
CLUSTER
CODE
A. FUND CLUSTER CODE VALUES 01 Regular Agency Fund
02 Foreign Assisted Project Fund
03 Special Accounts- Locally
Funded/Domestic Grants Fund
04 Special Accounts- Foreign
Assisted/Foreign Grants Fund
05 Internally Generated Funds
06 Business Related Funds
07 Trust Receipts
b. Financing source code
PARTICULARS UACS

General Funds 1

Off-Budgetary Funds 2

Custodial Funds 3
c. Authorization code
PARTICULARS UACS

New General Appropriations 01

Continuing Appropriations 02

Supplemental Appropriations 03

Automatic Appropriations 04

Unprogrammed Funds 05

Retained Income/Funds 06

Revolving Funds 07

Trust Receipts 08
D. FUND CATEGORY CODE
PARTICULARS UACS
Specific Budgets of National Government Agencies 101 to 150
GoP Counterpart Funds and Loans/Grants from development 151 to 250
partners
Allocations to Local Government Units 251 to 275
Budgetary Supports to Government Corporations 276 to 300
Financial Assistance to MMDA 301 to 320
Special Accounts in the General Funds 321 to 400
Special Purpose Funds 401 to 420
Unprogrammed Funds 421 to 440
Retained Income/Funds 441 to 500
Revolving Funds 501 to 600
Trust Funds 601 to 610
Others (Specify) 611 to 999
ORGANIZATION CODE
A. DEPARTMENT CODES
DEPARTMENTS UACS

Congress of the Philippines 01

Office of the President 02

Office of the Vice President 03

Department of Agrarian Reform 04

Department of Agriculture 05

Department of Budget and Management 06

Department of Education 07

State Universities and Colleges 08

Department of Energy 09
DEPARTMENTS UACS

Department of Environment and Natural Resources 10

Department of Finance 11

Department of Foreign Affairs 12

Department of Health 13

Department of the Interior and Local Government 14

Department of Justice 15

Department of Labor and Employment 16

Department of National Defense 17

Department of Public Works and Highways 18

Department of Public Tevhnology 19

DEPARTMENTS UACS

Department of Social Welfare and Development 20

Department of Tourism 21

Department of Trade and Industry 22

Department of Transportation and Communication 23

National Economic and Development Authority 24

Presidential Communications Operation Office 25

Other Executive Officers 26

Autonomous Region in Muslim Mindanao 27

Joint Legislative Executive Councils 28

The Judiciary 29
DEPARTMENTS UACS

Civil Service Commission 30

Commission on Audit 31

Commission on Elections 32

Office of the Ombudsman 33

Commission on Human Rights 34

Budgetary Support to Government Corporations 35

Financial Assistance to MMDA 36

B. AGENCY CODES
C. OPERATING UNIT CLASSIFICATION CODE
OPERATING UNITS UACS
Central Office 01
Staff Bureaus 02
Departments/Agency Regional Offices/Centers for Health 03
Development/Regional Field Units - DA
State Universities and Colleges - Campuses 04
Provincial offices – DAR and DENR 05
National Irrigation Administration Regional Offices - DA 06
Extension of Field Offices – CDA-DOF/Penal Colonies - BUCOR 07
Schools Division/District offices - DepEd 08
Secondary Schools – DepEd/Campuses - PSHS 09
Collection Districts - BOC 10
Revenue Regional Offices - BIR 11
OPERATING UNITS UACS

Revenue Districts Offices - BIR 12

Embassies/Consulates General/Manila and Regional Consular 13

Offices - DFA
Special/Retained Hospitals – DOH 14

Treatment and Rehabilitation Centers – DOH 15

Technical/Vocational Schools – TESDA 16

Key Budgetary Units – DND 17

District Engineering Offices and Sub-District Engineering Offices – 18

DPWH
Land Transportation Office – DOTC 19

Land Transportation, Franchising and Regulatory Board – DOTC 20

Regional Development Councils – NEDA 21

LOCATION CODES

 A. REGION REGION UACS

Region I – Ilocos 01

Region II – Cagayan Valley 02

Region III – Central Luzon 03

Region IV – A – CALABARZON 04

Region IV – B – MIMAROPA 17

Region V - Bicol 05

Region VI – Western Visayas 06

Region VII – Central Visayas 07

 REGIONS UACS

Region VIII – Eastern Visayas 08

Region IX – Zamboanga Peninsula 09

Region X – Northern Mindanao 10

Region XI – Davao 11

Region XII – SOCCSKSARGEN 12

Region XIII – CARAGA 16

National Capital Region (NCR) 13

Cordillera Administrative Region (CAR) 14

Autonomous Region in Muslim Mindanao (ARMM) 15

 PROVINCE UACS

CAR – Cordillera Administrative Region

Abra 01

Apayao 81

Benguet 11

Ifugao 27

Kalinga 32

Mountain Province 44
 Region I – Ilocos Region UACS

Ilocos Norte 28

Ilocos Sur 29

La Union 33

Pangasinan 55
Region II – Cagayan Valley

Batanes 09

Cagayan 15

Isabela 31

Quirino 57

Nueva Vizcaya 50
 Region III – Central Luzon UACS

Aurora 77

Bataan 08

Bulacan 14

Nueva Ecija 49

Pampanga 54

Tarlac 69

Zambaeles 71
Region IV – A – CALABARZON

Batangas 10

Cavite 21

Laguna 34

Quezon 56

Rizal 58
Region IV – B – MIMAROPA UACS

Marinduque 40

Occidental Mindoro 51

Oriental Mindoro 52

Palawan 53

Romblon 59
Region V – Bicol Region UACS

Albay 05

Camarines Norte 16

Camarines Sur 17

Catanduanes 20

Masbate 41

Sorsogon 62
Region VI – Western Visayas UACS

Aklan 04

Antique 06

Capiz 19

Guimaras 79

Iloilo 30

Negros Occidental 45
Region VII – Central Visayas UACS

Bohol 12

Cebu 22

Negros Oriental 46

Siquijor 61
Region VIII – Eastern Visayas UACS

Biliran 78

Eastern Visayas 26

Leyte 37

Northern Samar 48

Southern Leyte 64

Samar(Western Samar) 60
Region IX – Zamboanga Peninsula UACS

Zamboanga Del Norte 72

Zamboanga Del Sur 73

Zamboanga Sibugay 83
Region X – Northern Mindanao UACS

Bukidnon 13

Camiguin 18

Lanao Del Norte 35

Misamis Occidental 42

Misamis Oriental 43
Region XI – Davao Region UACS

Davao Del Norte 23

Davao Oriental 25

Davao Del Sur 24

Compostela Valley 82
Region XII – SOCCSKSARGEN UACS

North Cotabato 47

Sarangani 80

South Cotabato 63

Sultan Kudarat 65
Region XIII – CARAGA UACS

Agusan Del Norte 02

Agusan Del Sur 03

Surigao Del Sur 67

Surigao Del Norte 68

Dinagat Islands 85
ARMM – Autonomous Region in Muslim Mindanao UACS

Basilan 07

Lanao Del Sur 36

Maguindanao 38

Sulu 66

Tawi-Tawi 70

C. Munipality
D. barangay
Major final output (mf0)/program,
activity, & project (PAP) Codes
 A. SECTOR/HORIZONTAL OUTCOMES
Sector values:
Code Values Descriptions Type
100 General Public Services Sector
120 Defense Sector
140 Public Order and Safety Sector
160 Economic Affairs Sector
180 Environmental Protection Sector
200 Housing and Community Amenities Sector

220 Health Sector

240 Recreation, Culture and Religion Sector

260 Education Sector

280 Social Protection Sector
Subsector values
Code Values Description Type
100 General Public Services Sector
101 Executive And Legislative Organs, Financial and Sub-Sector
Piscal Affairs, External Affairs
102 Foreign Economic Aid Sub-Sector
103 General Services Sub-Sector
104 Basic Research Sub-Sector
105 R&D General Public Services Sub-Sector
106 General Public Services n.e.c. Sub-Sector
107 Public Debt Transaction Sub-Sector
108 Transfer of a General Character between different Sub-Sector
levels of Government
109 Governance/Government Institutions And Sub-Sector
Regulatory Regime
110 - 119 Not yet assigned Sub-Sector
120 Defense Sector
121 Military Defense Sub-Sector
122 Civil Defense Sub-Sector
123 Foreign Military Aid Sub-Sector
124 R&D Defense Sub-Sector
125 Territorial Integrity Sub-Sector
126 Defense Against Ciber Sub-Sector
Crime
127 Defense n.e.c Sub-Sector
128 - 139 Not yet assigned Sub-Sector
Code Values Descriptions

01 Disaster Related

02 Climate Change – Mitigation

03 Climate Change - Adoptation

b. program/project/purpose
Programs,Projects or Purpose UACS

General Administration and Support 1

(GAS)
Support to operation ( STO) 2

Operations (O) 3

Locally Funded Projects 4

Foreign – Assisted Projects 5

Purpose (For Special Purpose Funds 6

only)
c. mfo/project category codes
Particulars UACS

Physical Infrastructure:

Buildings and other Structure 01

Flood Control and Drainage 02

Non Road Transport infrastructure 03

Power and Communication 04

infrastructure
Roads and Bridges 05

Water Management 06
Non Physical Infrastructure Projects:

Economic Development 07

Education 08

Environmental Protection 09

Governance 10

Health 11

Recreation, Sports and Culture 12

Research and Development 13

Social Protection 14
Project sub category codes
Particulars UACS
Buildings and Other Structures 0100
School Building 0101
Health Facilities 0102
Multi Purpose Facilities 0103
Agricultural Facilities 0104
Government Buildings 0105
Housing 0106
Flood Control and Drainage: 0200
Flood Control Structures/Facilities 0201
Drainage/Protection Works 0202
Non Road Transport Infrastructure 0300
Aviation 0301
Rail Ways 0302
Ports, Light Houses and Harbors 0303
Accessibility Facilities 0304
Multipurpose pavement 0305
Power and Communication 0400
Infrastructure
Electrification 0401
Energy Resource Development 0402
Energy Effiency and Conservation 0403
Energy 0404
Investment/Promotion/Innovation
Communication 0405
Roads and Bridges 0500
National Roads 0501
National Bridges 0502
Local Roads 0503
Local Bridges 0504
Traffic decongestion 0505
Farm – to – Market roads 0506
Water Management 0600
Water supply 0601
Septage and Sewerage 0602
Water Treatment System 0603
Irrigation System 0604
Economic Development 0700
Economic Affairs 0701
Agriculture and Fisheries 0702
Asset Reform 0703
Mining and Manufacturing 0704
Trade and Industry 0705
Enterprise Development 0706
Micro- Enterprise Development 0707
Credit Facilities Development 0708
Tourism Development 0709
Industry Man Power Development 0710
Education 0800
Basic Education 0801
Technical and Vocational Education 0802
Tertiary Education 0803
Education not definable by level 0804
Environmental Protection 0900
Waste Management 0901
Pollution Abatement 0902
Protection of Biodiversity and 0903
Landscape
Reforestation 0904
Governance 1000
General Public Services 1001
Defense 1002
Public Order and Safety 1003
Systems Development 1004
Capacity Development 1005
Governance and Accountability 1006
Improvement
Health 1100
Public Health Services 1101
Improved Parenting 1102
Improved Women's Health 1103
Recreation Sports and Culture 1200
Recreation and Sports 1201
Culture 1202
Broadcasting and Publishing Services 1203
Research and Development 1300
Agriculture and Food 1301
Environment and Natural Resources 1302
Disaster Mitigation and Management 1303
Energy 1304
Health 1305
Information and Communication 1306
Technology
Biotechnology 1307
Nanotechnology 1308
Genomics 1309
Technology Transfer 1310
Science and Technology 1311
Defense 1312
Social Protection 1400
Sickness and Disability 1401
Senior Citizen 1402
Survivors 1403
Family and Children 1404
Unemployment 1405
Food Programs 1406
Social Security welfare and 1407
development
Poverty Reduction 1408
Housing 1409
Livelihood 1410
Peace and Development 1411
Trafficked Persons 1412
Youth Development 1413
Object codes

 A. Revised Chart of Accounts

Particulars UACS
Assets 1
Liabilities 2
Equity 3
Income 4
Expenses 5
 COA Cir. No. 2013-002 further provides that the account code structure
consists of eight (8) mandatory digits as follows:

0 00 00 00 0

 Account Group
 Major Account Group
 Sub-Major Account Group
 General Ledger Accounts
 General Ledger Contra- Accounts
ACCOUNTING FOR DISBURSEMENT
AND RELATED TRANSACTIONS

 The disbursement activities of the National Government Agencies start from

the receipt of Notice of Cash Allocation (NCA) from the Department of Budget
and Management
MODES OF DISBURSEMENT

 1. Disbursement by check
 2. Disbursement by cash
 3. Disbursements through List of Due and Demandable Accounts Payable-
Advice to Debit Account (LDDAP-ADA)
 4. Disbursement through Electronic Modified Disbursement System as part of
the Modified Disbursement Scheme
 5. Disbursements through Cashless Purchases Card (CPC) System
 6. Disbursements by Foreign-based Government Agencies
 7. Disbusements through Direct Payment Record
DISBURSEMENT BY CHECK

 Payment of the following utility bills:

 Grant of cash advance for travel (3000)

 Advance payment to Procurement Service (20,000)

 Establishment of Petty Cash Fund (PCF) (10,000)

 Replenishment of PCF (5,500)

Expenses charged to the PCF:
Bond paper 5,000
Postage stamps 500
Total 5,500
 Remittance of Government’s Share (13,700)
Retirement and Life Insurance Premium 8,500
Pag-IBIG Contributions 1,400
PhilHealth Contributions 3,800
 Remittance of Salary deductions (14,600)
Retirement and Life Insurance Premium 8,500
Pag-IBIG Contributions 1,400
PhilHealth Contributions 3,800
GSIS-Salary Loan 700
Employee’s Association 200
Total 14,600
CASH ADVANCE FOR PAYROLL

Illustration:
Assume the following data from the account records of Agency ABC:
Salaries and wages P50,000
PERA 20,000
Total: 70,000
Less Salary Deductions:
Withholding Tax 9000
Life and Retirement Premiums (GSIS) 8500
GSIS salary loan 700
Pag-IBIG premiums 1400
PhilHealth premiums 3800
Employee’s Association 200 23,600
Net Amount 46,400
The following journal entries shall be prepared to record the above transactions:
 Set-up of Due to Officers and Employees and Salary Deductions
Account Title Account Code Debit Credit
Salaries and Wages- Regular 50101010 50,000
PERA 50102010 20,000
Due to BIR 20201010 9,000
Due to GSIS 20201020 9,200
Due to Pagibig 20201030 1,400
Due to Philhealth 20201040 3,400
Other Payables 29999990 200
Due to Officers and Employees 20101020 46,400
(To recognize payable to officers and employees and to set up salary deductions)
 Granting of Advances for Payroll
Account Title Account Code Debit Credit
Advances for Payroll 19901020 46400
Cash – MDS, Regular 10104040 46400
(To record grant of advances to cover payment of salaries and wages of employees)
Liquidation of Payr oll

Account Title Account Code Debit Cr edit

Due to Officer s and Employees 20101020 46,400

Advances for Payr oll 19901020 46,400

(To r ecognize liquidation of Advances for Payr oll based on the Repor t of Cash Disbur sements and suppor ting documents)

Accounting for Over payment

Illustr ation:

Using the date fr om the pr eceding illustr ation, that after payments w er e made to those employees, the agency discover ed over p ayments in the amount of P5,00 due to the pr epar ation of payr oll befor e
r epor ts of attendance ar e submitted making it possible to know the ex act amount to be paid in case ther e ar e absences w ithout pay dur ing the pay per iods. Accor dingly, the r esulting over payment w as
r efunded by the concer ned employees.

The follow ing jour nal entr ies shall be pr epar ed to r ecor d the above tr ansactions:

 Over payment taken up as r eceivables

Account Title Account Code Debit Cr edit

Due fr om officer s and Employees 10305020 5000

Salar ies and Wages, Regular 50101010 5000

(To r ecognize over payment of salar ies and w ages)

Cash Collecting Officer s 10101010 5000

Due fr om Officer s and Employees 10305020 5000

(To r ecognize r eceipt of r efund)

Cash Tr easur y/Agency Deposit, Regular 10104010 5000

Cash Collecting Officer 10101010 5000

(to r ecognize the deposit of collection)

CA SH A DVA NCES FROM OPERA TING EXPENSES OF G OVERNM ENT UNITS W ITHOUT A COM PLETE SETS OF BOOK OF A CCOUNTS

Illustr ation:

Assume the follow ing data fr om the accounting r ecor ds of agency X:

Estimated Ex penses for 2 months r equir ements:

Office Supplies Ex penses 22,000

Tr aveling Ex penses 13,000

Water Ex penses 6,000

Telephone Ex penses 3,000

Electr icity Ex penses 15,000

Total 59,000
The following journal entries shall be prepared to record the above transaction:
Books of Central/Regional/Division Officer or OU
Account Title Account Code Debit Credit
Advances for Operation Expenses 19901010 59,000
Cash/MDS Regular 10104040 59,000
(To recognize granting of cash advance to field units without books of accounts)

Offices Supplies Expenses 50203101 22,000

Traveling Expenses – Local 50201010 13,000
Water Expenses 50204010 6,000
Electricity Expenses 50204020 3,000
Telephone Expenses 50205020 15,000
Advances for operation expenses 19901010 59,000
(To recognize liquidation of cash advance upon the receipt of the certified copy of CDReg with paid DV’s and other supporting
documents from field /extensions/satellite/operation units)
CA SH A DVA NCE FOR SPECIFIC PURPOSE/TIM E-BOUND UNDERTA KING

Illustr ation:

Assume the follow ing estimated ex penses for the anniver sary celebr ation of agency AB fr om its accounting r ecor d:

Office Supplies Ex penses 15,000

Tr aveling Ex penses 3,000

Pr inting and Publication 2,000

Total 20,000

The follow ing jour nal entr ies shall be pr epar ed to r ecor d the above tr ansaction:

Account title Account Code Debit Cr edit

Advances to Special Disbur sing Officer 19901030 20,000

Cash MDS, Regular 10104040 20,000

(To r ecognize gr anting of cash advance for the anniver sar y celebr ation)

Tr aveling Ex penses – Local 50201010 3,000

Office Supplies Ex penses 50203010 15,000

Pr inting and Publication Ex penses 50299020 2,000

Advances to Special Disbur sing Officer 19901030 20,000

(to r ecognize liquidation of cash advance after the anniver sary celebr ation based on the RCDisb and suppor ting documents submitted by the Special Disbur sing Officer ).
CASH ADVANCE FOR PETTY OPERATING EXPENSES
Illustration:
Assume the following data from the accounting records of Agency Y:
Estimated Expenses:
Traveling Expenses 5,000
Office Supplies Expenses 2,000

Postage and Courier Expenses 1,500

Fuel, Oil and Lubricants Expenses 2,500

Other MOOE 4,000

Total 15,000

The following journal entries shall be prepared to record the following transactions:

Account title Account Code Debit Credit

Petty Cash 10101020 15,000

Cash – MDS, Regular 10104040 15,000

(To record the establishment of the PCF)

 Tr aveling Ex pense – Local 50201010 5,000

 Office Supplies Ex penses 50203010 1,800

 Fuel, Oil and Lubr icants 50203090 2,100

 Postage and Cour ier Ex penses 50205010 400

 MOOE 50299990 3,200

 Cash – MDS, Regular 10104040 12,500

 (To r ecor d the r eplenishment of petty cash based on the DV, RPPCVs and suppor ting documents)

 Cash Collecting Officer 10101010 2,500

 Petty Cash 10101020 2,500

 (To r ecor d r eturn of unused PCF upon r etir ement, r esignation, separ ation and ter mination of the petty cash custodian based on the OR)

 Illustr ation:

 Assume the follow ing ar e the unr eplenished PCV’s as at December 31:

 Office Supplies 700

 Tr avelling Ex penses 300

 Total 1,000


the following journal entries shall be prepared to record the above transaction:

Account Title Account Code Debit Credit

Traveling Expense – Local 50201010 700

Office Supplies Expenses 50203010 300

Petty Cash 01001020 1,000

(To record the unreplenished petty cash at the end of the year)

(LDDAP-ADA)

Illustration:

Assume the following of Agency X during the second quarter of the current year:

1. Upon set up of payables to suppliers and contractors (700,000)

Particulars Account Code Debit Credit

Buildings 10604010 700,000

Accounts Payable 20101010 700,000

(To setup payables to contractors and suppliers based on the approve disbursement vouchers)

Payment through ADA

Accounts Payable 20101010 700,000

Cash – MDS,Regular 10104040 700,000

(To recognize the payments of payable to suppliers or contractors through ADA)

 2. Granting of Payroll Fun
Assumptions:
Salaries and Wages 50,000

PERA 20,000

Total 70,000

Less: Salary Deductions

Withholding Tax 9,000

Life and Retirement Premiums 8,500

Pag-IBIG premiums 1,400

PhilHealth premiums 3,800

GSIS Salary Loan 700

Employees’ Association 200 23,600

Net Amount 46,400
 3. Payment of salaries through ATM
Assume the same data in #2.
 4. Payment for delivery of supplies and materials for consumption
Particulars Account Code Debit Credit
Office Supplies Inventory 10404010 5,000
Cash – MDS, Regular 10104040 5,000
(to recognize payment for the delivery of supplies and materials based on delivery
receipt no. 12451)
 5. Payment of rent (6,000)
6. Advances to Contractors (105,000)

7. Payment of Accounts Payable

Gross 100,000
Less: Withholding Tax (VAT) 10,714
Net 89,286
DISBURSEMENT BY FOREIGN- BASED
GOVERNMENT AGENCIES

ILLUSTRATION:
Assume the following data:
Passport and visa fee collected 200,000
Cash Disbursement Ceiling (CDC) received 150,000
Expenses paid:
Allowance-Civilian employees 80,000
Rent 20,000 100,000

The accounting entries for the collection of revenue and the constructive receipt
of disbursement authority to, Foreign Service Posts (FSPs) of DFA and DOLE are as
follows:
DFA and DOLE’s Books

DISBURSEMENT THROUGH DIRECT PAYMENT METHOD

ILLUSTRATION
Agency AB purchased communication equipment in the amount of
500,000 through Direct Payment Scheme of Foreign Loan Availment. A liability was
set-up. The corresponding NCAA was received and payment through, Direct
Payment Scheme was made. The BTr recognized the above transactions in its
books.
The following journal entries shall be prepared to record the above
transactions:
 Books of Agency AB
ACCOUNT TITLE ACCOUNT CODE DEBIT CREDIT
Communication Equipment 10605070 500,000
Accounts Payable 20101010 500,000
( To recognize receipt of PPE procured
through the direct payment scheme)
 BTr Books
NATIONAL GOVERNMENT AGENCIES

Accounting for Revenue, Other Receipts and

Financial Statements.
 REVENUE
EXCHANGE TRANSACTIONS NON-EXCHANGE TRANSACTIONS

FINES
TAX
AND
REVENUE
SALE USE BY PENALTIES
OF GOODS OTHER
/PROVISION OF OF ENTITY’S
SALES ASSETS SHARES PRESENT
GRANTS AND OBLIGATION
DONATION SATISFIED
EXCHANGE TRANSACTIONS

 RECOGNITION AND MEASUREMENT OF REVENUE FROM EXCHANGE

TRANSACTIONS
Revenue from exchange transactions shall be measured at fair value of the
consideration receive or receivable.

a. Revenue shall be recognized when it is probable that future economic

benefits or services potential will flow to the entity and these benefits can be
measured reliably.
b. Revenue shall be measured at the fair value of the consideration received or
receivable. Any amount of trade discounts and volume rebates shall be taken into
account.
ILLUSTRATION

Assume that on August 05, 2018, Entity XYZ received a 90-day, 6%, 50,000 php promissory note
from entity ABC for accounting manuals sold . On October 04, 2018, ABC paid cash in settlement
of its note .
Entries:

August 5
Notes receivable 50,000
Sales revenue 50,000
October 4
Cash-Collecting Officers 50,750
Notes Receivable 50,000
Interest income 750
NON-EXCHANGE TRANSACTIONS
 RECOGNITION AND MEASUREMENT OF REVENUE FROM NON-EXCHANGE
TRANSACTIONS
THE CASH BASIS OF ACCOUNTING SHALL BE APPLIED BY ALL GOVERNMENT
AGENCIESIN THE RECOGNITION OF REVENUE FROM NON-EXCHANGE
TRANSACTION UNTIL A
RELIABLE MODEL OF MEASUREMENT OF THIS REVENUE IS DEVELOPED. THEREFORE
ASSET AND THE CORRESPONDING REVENUE OR LIABILITY THAT ARISE FROM
NON-EXCHANGE TRANSACTIONS SHALL BE RECOGNIZED WHEN COLLECTED OR
WHEN THESE ARE MEASURABLY AND LEGALLY COLLECTIBLE.

REVENUE FROM NON-EXCHANGE TRANSACTIONS SHALL BE MEASURED AT

THE AMOUNT OF THE INCREASE IN NET ASSETS RECOGNIZED BY THE
ENTITY,UNLESS IT IS ALSO REQUIRED TO RECOGNIZE A LIABILITY.WHERE A
LIABILITY IS RECOGNIZED
AND SUBSEQUENTLY REDUCED, BECAUSE THE TAXABLE EVENT OCCURS OR A
CONDITION IS SATISFIED,THE AMOUNT OF THE REDUCTION IN THE LIABILITY WILL
BE
RECOGNIZED AS REVENUE.
OTHER RECEIPTS

 Tax Remittance Advice

 Cash-Tax Rem ittance A dvice 100,000

 Subsidy fr o m NG 100,000

 Due to BIR 100,000

 Cash-Tax Rem ittance

 A dv ice 100,000

 Cash-Tax Rem ittance A dvice 100,000

 Incom e tax 100,000

 Subsidy to NG A s 100,000

 Cash-Tax Rem ittance

 A dv ice 100,000
RECEIPT OF SUBSIDY/ASSISTANCE FROM
OTHER NGAs, LGUs and OTHER FUNDS

 Cash-Collecting officers 100,000

 Subsidy from other NGAs 50,000
 Assistance from LGUs 50,000
 Assistance from GOCCs 50,000

 Cash-Treasury/Agency deposit,
 Regular 100,000
 Cash-Collecting officers 100,000
Performance Bond/Security Deposit

 Cash-Collecting officers 10,000

 Guaranty/Security
 Deposits Payable 10,000

 Cash-Treasury/Agency deposit,
 Regular 10,000
 Cash-Collecting officers 10,000
Intra-agency Fund Transfer

 Cash-Collecting officers 5,000

 Due to Central Offices
 Due to Bureaus
 Due to Regional Offices 5,000
 Due to operating units
 Due to other funds

 Cash-Treasury/Agency deposit,
 Regular 10,000
 Cash-Collecting officers 10,000
FINANCIAL
STATEMENTS

 ADJUSTING JOURNAL ENTRIES

TWO MAIN TYPES

A. Accrued Items

B. Deferred Items
ADJUSTING JOURNAL ENTRIES

 Other Adjustments

A. Reversion of Unused NCA

B. Petty cash Fund

C. Unreleased Commercial Checks

D. Allowance of Impairment Losses of Asset Accounts

E. Depreciation Expense

F. Other Adjustments
ADJUSTING JOURNAL ENTRIES
Reversion of Unused NCA

Illustration: Assume that a NGA receive a subsidy from the NG amounting to 10,000,000.00. At
The end of the year only ¾ of the amount was used.

Entry upon the receipt:

Cash – MDS Regular 10,000,000.00

Subsidy from the NG 10,000,000.00

Adjusting Entries:

Subsidy from the NG 2,500,000.00

Cash – MDS Regular 2,500,000.00
ADJUSTING JOURNAL ENTRIES
Petty Cash Fund

ILLUSTRATION:
Assume the following data from the accounting records of Agency Y:
Estimated Expenses:
Traveling 4,000
Office Supply Expenses 2,500
Fuel, Oil and Lubricant Expenses 1,500
Other MOOE 2,000
Total 15,000

Journal Entries

Petty Cash 15,000

Cash – MDS, Regular 15,000
(To record the establishment of PCF)
ADJUSTING JOURNAL ENTRIES
Petty Cash Fund

 Tr avelling Ex pense-Local 5,000

 Office Supplies Ex pense 1,800

 Fuel, Oil and Lubr icants 2,100

 Postage and Cour ier Ex penses 400

 MOOE 3,200

 Cash – MDS, Regular 12,500

 (To r ecor d r eplenishment of Petty Cash)

 Assume the follow ing ar e the unr eplenished PCV’s as at December 31:

 Office Supplies 700

 Tr aveling Ex penses-Local 300

 Total 1,000

 Tr avelling Ex penses-Local 700

 Office Supplies Ex penses 300

 Petty Cash 1000

ADJUSTING JOURNAL ENTRIES
Allowance for Impairment Losses of Asset Accounts

Illustration: Per aging of the accounts, the required allowance is 20,00;while the
beginning balance of the allowance for impairment loss is 15,000. No other
transactions transpired. The adjusting entry to take up bad debts expense is as
follows :

Impairment Loss-Loans & Receivable 5,000

Allowance for impairment-AR 5,000
ADJUSTING JOURNAL ENTRIES
Depreciation

Illustration: Asset Cost Salvage Useful Depreciation

Value Life
Building 50,000,000 10% 20 2,250,000

Dep’n Expense-Bldg and

other structures 2,250,000
Accum. Dep’n-Bldg and 2,250,000
other structures
Financial Statements

 A complete set of financial statements to be submitted by

an entity shall include the following :

a. Statement of Financial Position

b. Statement of Financial Performance
c. Statement of Changes in net asset/equity
d. Statement of Cash Flow
e. Statement of Comparison of Budget and Actual amounts;
and
f. Notes to the Financial statements
Accounting for Local Government Unit (LGU)

NOTE:
 The COA circular 2013-002 dated January 30,2013. Adoption of revised chart
of account for National Government Agencies provides the revised chart of
account for National Agencies only. Thus pending the new circular LGU,
current circular for accounting shall be used.
Features and Policies
Accounting Method

modified accrual method shall be used where expenses shall be recognized when
incurred and income shall be in accrual basis except for the transactions where
accrual basis is impractical or when other methods may be require by law.
One Fund Concept

Separate fund accounting shall be done only when specifically required by law or
by a donor agency or otherwise necessitated by circumstances subject to prior
approval of the Commission.
Special Account In General Fund

Special accounts maintained in the General Fund shall be supported by

subsidiary ledgers for the following:

Public utilities and other economic enterprises;

Loans, interest, bond issued and other contribution for specific purpose;
Development projects funded from the share in International Revenue collection;
and
Other special accounts, which may be created by law or ordinance
Books Accounts
Ledgers
General Ledgers
Subsidiary Ledgers
-Cash
-Receivables
-Inventories
-Investments
- PPE
-Liabilities
-Income
-Expenses
Financial Statement- similar to the national government agencies, the local
Government Units (LGU) shall prepare financial statement, such as:
1. Balance Sheet
2. Statement of Income and Expenses
3. Statement Cash flows

Appropriation, Allotments and Obligation- Journal Entry shall no longer be

prepared to record the appropriation, receipt of the allotments and incurrence
of obligations. In lieu of this, separate registries shall be maintained by the
accounting unit to control the appropriations, allotments and obligations for each
of the four classes of expenditures anmely:
1. Registry of Appropriations, allotments and Obligation- Capital Outlay(RAAOCO)
2. Registry of Appropriations, allotments and Obligation- Maintenance and other
Operating Expenses (RAAOMO)
3. Registry of Appropriations, allotments and Obligation- Personnel Service
(RAAOPS)
4. Registry of Appropriations, allotments and Obligation- Financial Expenses
(RAAOFE)
 Financial Expenses- Under the new Accounting system, financial expenses, such
as: bank charges, interest expense, commitment fees and other related
expenses, shall no longer be classified as maintenance and other operating
expenses.

Perpetual Inventory of supplies and Materials- Supplies and materials purchases

for stock shall be recorded using the perpetual inventory system. Regular
purchase shall be coursed through the inventory account and issuance thereof
shall be recorded as the transactions take place, except those purchased out of
petty cash fund, which shall be for immediate use shall be charged to expense
account
 Valuation of Inventory- inventories shall be valued at the cost and computed
using the moving average method, which is a method of calculating the cost of
inventory based on weighted average on the date of issue.

Maintenance of Supplies and Property, Plant and Equipment Ledger Cards-

the accounting unit shall maintain Supplies Ledger Cars by stock number and
Property. Plant and Equipment Ledger Cards by category of assets.

Construction of Assets- for assets under construction, the construction period

Theory shall be applied for costing purposes. Bonus paid to the contractor for
early completion of work shall be added to the cost of project.
 Public Infrastructures- for public infrastructures, such as; roads, bridges,
waterways, railways, plazas, monuments, etc., a registry of public
infrastructures (RPI) shall be maintained according to classification. The
following are the Registries to be Maintained:
a. Registry for Infrastructures- Bridges (RPIB)
b. Registry for Infrastructures- Roads (RPIR)
c. Registry for Infrastructures- Plaza, monuments, etc. (RPIB)

Depreciation- depreciable assets shall be depreciated using the straight-line

method. A residual value equal to 10% of its cost shall be maintained.
Depreciation shall start on the second month after the purchase or completion of
the property, plant and equipment accounts.
 Reclassification of Assets- Assets declared by proper authorities as obsolete and
unserviceable, including assets no longer used, shall be reclassified as “Other Assets”
separate from the other inventory and property, plant and equipment's accounts.

Allowance for Impairment- Account Receivable- In order to have fair valuation of

receivables, allowance for impairment- accounts receivable shall be established and
shall be provided only for trade receivables.

Elimination of Contingent Accounts- Contingent accounts shall no longer be used. All

financial transactions shall be recorded using the appropriate accounts. Cash storages
and disallowance shall be recorded under receivable accounts, such as; “Due from
Officers and Employees” and “Receivable-Disallowance/Charges”
Recognition of Liability- liability shall be recognized at the time goods and
services are accepted or rendered and suppler/creditor bill are received.
Interest Accrual- whenever applicable and appropriate, interest income and/or
expense shall be accrued and recognized in the books of accounts.
Accounting for Borrowing and Loans- all borrowings and loans incurred shall be
recorded directly to the appropriate liability accounts.
Elimination of corollary and negative Entries- Corollary entries and negative
entries shall no longer be used. Acquisition/ disposition of assets shall be
debited/ credited directly to the appropriate assets accounts. If an error is
committed a correcting entry shall be prepared to adjust the original entry.
 NEW
BARANGAY ACCOUNTING
SYSTEM
BASIC FEATURES AND POLICIES

❖ Accounting method
-Modified Accrual

❖ Purchase of Supplies and Materials and Small Items

-with more than one year of serviceable life shall be recorded as INVENTORIES.

❖ Cash Advance
-“Payroll Fund” and “Advance to Officers and Employees”.

❖ Audit Disallowances
-Final and executory
❖ Barangay Accounts
 -New Government Accounting System

❖ Processing of transaction and recording in the books

 Processing Transaction Recording Transaction

 Barangay level Office of the Municipal

 accountant
MAJOR FINANCIAL TRANSACTIONS

1. Appropriations
2. Receipt and Deposits
3. Disbursements
4. Supplies and Materials, Property, Plant and Equipment, Public Infrastructure/
Reforestation Project.
 APPROPRIATION
➢ Refers to an authorization made by ordinance, directing the payment of goods
and services from local government funds under specified condition or for
specific purposes.

➢ General Fund
➢ 20% Development Fund
➢ Calamity Fund
➢ Sangguniang Kabataan Fund
➢ Gender and Development Fund
General Fund
-Only fund maintained by Barangay
FOUR (4) registries of Appropriations and Commitments:

1. Personal Services
2. Maintenance and other Operating Expenses
3. Financial Expenses
4. Capital outlay
▪ 20% Development Fund
 -no less twenty percent (20%) of its annual internal revenue

▪ Calamity Fund
 -Local Disaster Risk Reduction and management Fund (LDRRMF)

 -five percent (5%) of the estimated revenue from regular sources shall be set aside
as an annual lump sum appropriation

• Sangguniang kabataan Fund

 -ten percent(10%) of the general fund of the barangay shall be set for sangguniang
kabataan
RECEIPTS AND DEPOSITS

Receipts
all collections in form of cash and checks from the share in national taxes
and revenues, barangay taxes and other.
Deposits
money or other equivalents received by the bank from the agencies for
safekeeping.

BARANGAY AUTHORIZED
RECEIPTS
TREASURER GOVERNMENT
-in form of cash DEPOSITORY
-for handling and
and checks BANK
deposit
DISBURSEMENT

Disbursement
refers to all cash/ check paid out during the period for settlement of gov’t
expenditures/ payables.

Basic Requirements (applicable to all class of disbursements)

1. Existence of Appropriation sufficient to cover the expenses.

2. Legality of the expenses and in conformity with rules and regulations.
3. Approval of the expenses by the Punong Barangay.
4. Submission of documentary evidence to establish the validity of the expenses.
DISBURSEMENT

Mode of Disbursements:

1. CHECK
Must be covered by deposit with AGDB
2. CASH
a. Cash Advance
given to barangay treasurer/ accountable officer for salaries, honoraria etc.
Only.
b. Disbursements
made out of petty cash funds
SUPPLIES AND MATERIALS

Supplies and materials

- shall be charged directly to maintenance and other operating expenses.

- cost of supplies and materials are based on the invoice cost.
- shall be covered by an approval of requisition and issue slip.
SUPPLIES AND MATERIALS
SUPPLIES AND MATERIALS
PPE, Public Infrastructure/ Reforestation
Project

Property, Plant and Equipment

-The cost of the PPE acquired through purchased shall include purchase
cost and expenses incurred in bringing the asset to its intended location and
make it operational.

-The PPE shall be depreciated using “straight line method” with a 10%
residual value of the cost.
Register to be maintained:

1. Property, Plant and Equipment Register.

2. Creditor’s Card

Reports to be prepared:

1. Inventory and Inspection report of Unserviceable Property.

2. Report on the Physical count of Property.
3. Inspection and Acceptance Report.
Duties and Responsibilities of the Municipal
Accountant and Budget Officer

Municipal Accountant

-Prepare the required monthly and year-end trial balance, Financial

Statements and reports/ schedules for each of the barangays.

-Prepare and submit the Bank Reconciliation Statement to COA auditor/

audit team leader concerned.

-Consolidate and reports/ schedules of the barangays.

Budget Officer

-Consolidate the Statement of Appropriations, Commitments and balances

of each barangay for the five funds.

-Submit the Consolidates Statement of Appropriations, Commitments and

Balances of all barangays.
THE BUDGET PROCESS
PREPARATION

Punong
Barangay

Punong Sangguniang
ACCOUNTABILITY Barangay Barangay AUTHORIZATION

Punong Sangguniang
Barangay Barangay

EXECUTION REVIEW
 LEGAL BASIS

“ on or before the fifth (5th) day of September of each year, the city or municipal
treasurer jointly with the city or municipal accountant, shall issue a certified
statement covering the actual income of the past year and estimates of income
of the current and ensuing fiscal year from local sources for the barangay
concerned.”

Article 423, IRR of R.A. No. 7160

PROCESS FLOW IN ACCOUNTABILITY

Segregate Post Income

Record
Expenditures for the
Collection
Levels Quarter

Record all Post BAF

Issue ORs Obligations/
Disbursement 1-3

Collect RPT Monitor &

Deposit all
and other Evaluate
Collection
Taxes Performance
SOURCES OF INCOME OF A BARANGAY

• Service fees or charges for the use of barangay property or facilities;

• Barangay clearance fees;
• Fees or charges for the commercial breeding of fighting cocks and on cockpits and
cockfights;
• Fees or charges for billboards, sign boards, neon signs and other outdoor advertisement;
• Toll fees or charges for the use of any public road, pier or wharf, waterway, bridge,
ferry, or telecommunications system funded and constructed by the barangay;
• Revenue from the operation of public utilities and barangay enterprises(markets,
slaughter houses, etc.);
• Fines (not exceeding P1,000) for the violation of barangay ordinance; and,
• Proceeds from the sale or lease of barangay property or from loans and grants secured
by the barangay government.
What is IRA?

The Internal Revenue Allotment (IRA) is the annual share of local governments
out of the proceeds of the proceeds from national internal revenue taxes. It is
estimated at forty percent (40%) of the actual collection of the national internal
revenue taxes during the third fiscal year preceding the current year as certified
by the Bureau of Internal Revenue (BIR).
The following are deemed as national revenue tax
• Income Tax
• Estate Tax and donor’s tax
• Value-added tax
• Other percerntage taxes
• Taxes imposed by special laws, such as travel tax
 Percentage of the total IRA goes to barangay and how is it divided among barangay

➢ Barangay gets 20% of the total IRA which is divided among each of 41,882 barangay
based on the following formula:

a.Population 60%
b.Equal sharing 40%

 NOTE: If the barangay has a population of not less than 100 the share should not be
less Than P80,000 per annum. The amount shall be chargeable against the 20%
share of the barangay from the total IRA, and balance to be allocated on the basis
of the formula.

 Illustrative example of how IRA is computed (for CY 2000)

Step 1. Compute the Net IRA

1997 National Internal Revenue

Tax Collection as certified by the BIR P 304,440B

x 40%

IRA for CY 2000 P 121,778B

Less: Actual Cost of Develved

Function & City funded hospitals 6,539B

Unprogrammed Amount 10,000B

Local Government Service

Equalization Fund 5,000B

Sub-Total 21,539B

NET IRA P 100,239B

Step 2: Allocate the NET IRA (P100,239B) per

Section 285 OF R.A No. 7160

Share per LGU

Provinces (23%) P 23,055B

Cities (23%) P 23,055B

Municipalities (34%) P 34,081B

Barangay (20%) P 20,048B

P 100,239B

Step 3: Allocate the aggregate barangay share of P20,048B to all barangays on

Population (60%) and equal sharing (40%)

Equal Sharing= (20.048B X 40%) divided by total no. of barangays

Population= (20.048B X 60%) X the ratio of a barangay population to

total Phil. Population.

Hence, the IRA share of a barangay is the sum of the following:

• Share based on equal sharing: and

• Share based on population

1.1 Fundamental Principles

The financial transactions and operations of the barangays shall be governed by the following
fundamental principles:
1.1.1. No money shall be paid out of the local treasury except in pursuance of an appropriations
ordinance or law.
1.1.2. Local government funds and monies shall be spent solely for public purposes.
1.1.3. No public money or property shall be appropriated or applied for religious or private
purposes.
1.1.4. Disbursements or disposition of government funds or property shall invariably bear the
approval of the proper officials.
1.1.5. All claims against government funds shall be supported with complete documentation.
1.1.6. Local revenues are generated only from sources expressly authorized by law or ordinance
and collections thereof shall at all times be acknowledged properly.
1.1.7. All monies officially received by a local government officer in any capacity or on any
occasion shall be accounted for as local funds, unless otherwise provided by law.
1.1.8. All collections shall be deposited intact with government depository bank or other
authorized depository bank for the account of the barangay, except those collections to be
remitted to the City/Municipal (C/M) Treasurer.
1.1.9. Trust funds in the local treasury shall be paid out only for the purpose for which the trust
was created or the funds received.
1.1.10. Fiscal responsibility shall be shared by all those exercising authority over the financial
affairs, transactions, and operations of the barangays.
1.1.11. Every officer of the barangay whose duties permit or require the possession or custody of
local funds shall be bonded, and such officer shall be accountable and responsible for the said
funds and for the safekeeping thereof in conformity with the provisions of the law.
1.2 General Accounting Policies
The following general policies shall be observed in accounting for barangay funds and property:
1.2.1. For accounting purposes, the fiscal year for the barangay shall start on January 1st and end on December 31st of
each year.
1.2.2. Barangay accounts shall be kept under a double-entry bookkeeping system.
1.2.3. The barangay financial transactions shall be recorded using the Chart of Accounts prescribed by the Commission on
Audit.
1.2.4. Barangay books of accounts shall consist of a Journal of Cash Transactions (JCT) - Annex 1, General Journal (GJ) -
Annex 2, General Ledger (GL) - Annex 3 and Subsidiary Ledger (SL) -Annex 4 which shall be maintained by the barangay
bookkeeper under the direct supervision of the City/Municipal (C/M) Accountant.
1.2.5. Cash transactions shall be recorded in the JCT and non-cash transactions shall be recorded in the GJ through a
Journal Entry Voucher (JEV) - Annex 5.
1.2.6. Funds granted to barangays for specific purpose shall be recognized as Special Trust Fund (STF).
1.2.7. Subsidies and grants for specific purpose shall be accounted for as Trust Liability. Once conditions are met, the
portion of the grant corresponding to the expenditure incurred shall be recognized as income, and the expenditure as
expense or asset as the case may be.
1.2.8. Unspent Local Disaster Risk Reduction and Management Fund (LDRRMF) and the share of the Sangguniang Kabataan
(SK) shall be recorded as STF.
1.2.9. Registry of Special Trust Fund (RSTF) as presented in Annex 33shall be maintained for each STF.
1.2.10. Appropriations and Obligations shall be recorded, monitored and controlled using the Record of Appropriations and
Obligations(RAO) - Annex 6
1.2.11. A Cashbook (Annex 8) shall be maintained and updated daily.
1.2.12. Revenues shall be classified as exchange and non-exchange.
1.2.1. Revenue from non-exchange transactions:
a. Taxes -revenue shall be recognized when the taxable event occurs and the asset recognition criteria are met.
b. Transfers -1. Transfers without conditions are recognized as revenue.
2. Transfers with conditions are recognized as liability and the corresponding liability is reduced when the
conditions are satisfied.
1.2.14. Revenue from exchange transactions shall be recognized upon receipt of assets or services, or
extinguishment of liability, and directly gives/renders service of approximately equal value.
1.2.15. All collections of the barangay shall accrue to the General Fund unless otherwise provided by law.
1.2.16. Payment in kind shall be recognized at fair value.
1.2.17. Expenses shall be recognized when incurred.
1.2.18. All lawful expenditures and obligations incurred during a fiscal year shall be taken up in the accounts of
that year.
1.2.19. Liabilities shall be recognized at the time goods and services are accepted or rendered.
1.2.20. Inventories shall be reassessed to lower of cost and net realizable value or replacement cost if held for
distribution/consumption at every reporting date.
1.2.21. Supplies and materials including drugs and medicines shall be recorded in the appropriate Inventory
account. The cost of the inventory items shall be assigned using the weighted average method.
1.2.22. When inventories are sold or utilized, the carrying amount of those inventories shall be recognized as
expense. Any write-down of inventories shall be recognized as an expense in the period the write-down occurs.
1.2.23. Biological Asset shall be recognized and revalued to its fair value less cost to sell at acquisition and every
reporting date.
1.2.24. Property, plant and equipment (PPE) shall be recognized as assets if it is probable that the future
economic benefits or service potential associated with the PPE will flow to the entity, and the cost or fair value
of the item can be measured reliably.
1.2.25. PPE shall be recorded when actually received.
1.2.26. Property (land and building) held to earn rentals or for capital appreciation or both shall be
classified as Investment Property and measured at cost.
1.2.27. PPE used in barangay operation shall be subject to depreciation using the straight line method
after deducting a residual value equivalent to 5 per cent of the cost of the property and equipment.
1.2.28. Depreciation of an asset begins when it becomes available for use (when it is in the location and
condition necessary for it to be capable of operating in the manner intended by management).
1.2.29. All public infrastructures shall be recognized as asset in the books of accounts and shall be
provided with depreciation in the same manner as PPE.
1.2.30. Impairment for all assets shall be recognized whenever the carrying value is more than the
recoverable amount.
1.2.31. All borrowings and secured loans shall be recorded in the barangay books using the appropriate
liability accounts. It shall be measured at amortized cost.
1.2.32. A monthly Bank Reconciliation Statement shall be prepared by the C/M Accountant upon receipt
of the bank statement.
Appropriations and Obligations

The budget of the barangay as authorized by the Sangguniang Barangay (SB) through an appropriation
ordinance serves as the authorization for the barangay to incur obligations. The Chairman of the
Committee on Appropriations (CCA) shall be responsible for the proper monitoring and control of the
barangay budget.

The specific policies and procedures related to barangay appropriations and obligations are:
3.1. Specific Policies and Procedures
3.1.1 Expenditures/Obligations shall in no case exceed available appropriations.
3.1.2 The duly approved barangay appropriation ordinance shall be recorded in the Record of
Appropriation and Obligations (RAO) as shown in Annex 6 that shall be maintained by the CCA. Separate
RAO shall be maintained for the following: a) 10% percent share of the Sangguniang Kabataan; b) 5% Local
Disaster Risk Reduction Management Fund (LDRRMF); and c) 20% Development Fund.
3.1.3 The RAO shall show the annual and supplemental appropriations and the obligations charged against
the said appropriations. It shall be used to monitor the availability of appropriations to cover proposed
expenditures/obligations.
3.1.4 Charges against the appropriations shall be based on the obligations made as shown in Contracts or
Purchase Orders (POs) and in the Disbursement Voucher (DV), and Payrolls.
3.1.5 Based on the RAO, the CCA shall certify as to the existence of appropriation on the Contracts or
POs, DV or Payrolls. As such, the CCA shall regularly update the RAOs by posting all certified obligations to
determine available balance of the appropriations.
3.1.6 The CCA shall report the charges to and balances of appropriations to the Punong Barangay (PB) and
the SB monthly through the Statement of Appropriations, Obligations and Balances (SAOB) (Annex 7). It
shall be certified correct by the CCA.
3.1.7 The PB and SB shall use the SAOB in the evaluation of the status of barangay finances.
Chapter IV

Collections and Deposits/Remittances

The BT shall be responsible for the proper handling of the funds of the barangay.
Barangay collections include, but are not limited to, the following:

1. Share from the National and Local Taxes/Revenues

a. Internal Revenue Allotment
b. Utilization of national wealth, such as: lands of public domain, water, mineral, coal, petroleum,
mining, oil, gas, oil deposits, etc.
c. Tobacco Excise Tax (RA No. 7171 and 8240)
d. Real Property Tax including interest and penalties imposed thereon
e. Tax imposed on sand, gravel and other quarry resources
f. Community Tax, if collections are made by the barangay

2. Barangay Fees and Taxes and Fees imposed on:

i. Peddlers
ii. Breeding of fighting cocks
iii. Use of barangay roads, waterways, bridges and parks
iv. Use of barangay properties/facilities
v. Parking
vi. Clearance/Certification
vii. Other fees imposed by the barangays
b. Taxes imposed on stores/retailers within the barangay
c. Penalties for violation of barangay ordinance
a. Operation of cockpits, places of recreation, etc.
b. Fund raising activities
c. Charges on billboards, signboards and other outdoor advertisements
d. Use of barangay-operated public markets, slaughterhouses and waterworks
e. Operation of other barangay economic enterprise

4. Other Receipts
a. Subsidies/Financial assistance from:
i. National Government
ii. Provinces/Cities/Municipalitiesb. Grants and donations received
b. Dividend/Interest from investments
c. Proceeds from:
i. Loans and other indebtedness
ii. Sale of Plant, Property and Equipment
d. Receipt of:i. Performance/Bidders/Bail Bonds
ii. Refund of Payroll Fund/Advances to Officers and Employees
iii. Funds intended for specific purpose
iv. Payment for lost properties
v. Payment due to overpayment of claims
vi. Other receipts
 BT shall observe the following policies and procedures in the management of collections and
deposits/remittances:
4.1 Specific Policies
4.1.1 The BT and all accountable officers shall be bonded in accordance with Section 305 (f) of
R.A. 7160 and DILG Memorandum Circular No. 99-186 dated October 11, 1999. The corresponding
premium shall be paid out of barangay funds.
4.1.2 All collections, either in cash or in checks, shall be acknowledged through the issuance of an
Official Receipt (OR) - Accountable Form No. 51 or other specific purpose receipts like Real
Property Tax Receipt (RPTR) -Accountable Form No. 56, Community Tax Certificate (CTC) or pre-
numbered cash tickets.
4.1.3 The prescribed officially numbered receipts shall be issued in strict numerical sequence.
Strictly, erasures and alterations are not allowed in preparing the OR.
4.1.4 All particulars in the OR shall be filled out. Duplicate and triplicate copies of the OR shall be
the exact carbon copy of the original.
4.1.5 Temporary or provisional receipts shall not be issued to acknowledge collections.
4.1.6 The OR shall be subject to proper custody, accountability and audit.
4.1.7 The BT shall be the custodian of all accountable forms. A complete record of the receipts,
issuances and transfers of accountable forms shall be maintained. He shall also be responsible for
the pre-numbering and control of cash tickets.
4.1.8 There shall be no transfer of accountable forms among/between Deputized Barangay
Collectors (DBC).
4.1.9 The BT and DBC shall render their Report of Accountability for Accountable Forms (RAAF) -
Annex 18.
4.1.10 Only checks in the name of the barangay shall be accepted as payment of obligation to the
barangay and issued the corresponding OR. The OR number and date of issue including the payor's
control details shall be indicated at the back of the check for reference purposes. The details of
the check shall be indicated in the space provided in the OR.
4.1.11 Collections shall not be used to encash checks or pay barangay
obligations/liabilities.
4.1.12 Collections accruing to the barangay shall be deposited intact daily. Where
travel time to the depository bank is more than one day, deposit shall be made at least
once a week or as soon as the collections reach P5,000.00.
4.1.13 Collections received by the BT as deputized collector of the city/municipality
shall be remitted intact to the treasurer of the city/municipality concerned at least
once a week or as practicable especially during heavy collections.
4.1.14 DBC maybe authorized/designated to receive collections like market fees,
parking fees or CTC on behalf of the BT in accordance with a Barangay Resolution
enacted by the SB and approved by the PB. Collections received by the DBC shall be
turned over daily to the BT. The amount turned over shall form part of the daily
collections of the BT for recording in the Cashbook and Report of Collections and
Deposits (RCD) (Annex 9.1).
4.1.15 The barangay shall maintain only one depository account with Authorized
Government Depository Bank (AGDB) in the name of the barangay. The selection of a
depository bank other than the AGDB, duly authorized by the Bangko Sentral ng
Pilipinas to accept government funds, shall be covered by a Resolution of the SB and
approved by the PB. In case there are idle funds, cash which can be freely invested
after considering provisions for recurring expenses and programmed disbursements for
capital outlay, within the context of the cash operating cycle of the barangay, the
barangay may maintain a time deposit account with prior authority of the SB and
approval of the PB.
4.1.16 The PB shall authorize the AGDB or depository bank other than AGDB to furnish
the C/M Accountant and the Auditor a copy of the monthly bank statement. It shall be
the duty of the BT to see that copies of monthly bank statements are furnished said
officials. The PB shall furnish the Auditor a copy of said authorization.
4.2 Specific Procedures

4.2.1 For collections made for the Barangay, the BT shall:

a. Upon receipt of cash/check payment, issue an OR to acknowledge the amount received.
The OR shall be issued strictly in numerical sequence and it shall be prepared in three
copies to be distributed as follows:
Original - Payee
Duplicate copy - Attached to the RCD for submission
to the C/M Accountant; then forwarded to the Auditor
Triplicate copy - BT file
b. At the end of the day, deposit the collections by preparing three copies of deposit slips
for bank's validation.
Original - to Bank
Duplicate copy - to be attached to the RCD for submission to the C/M Accountant; then
forwarded to the Auditor
Triplicate copy - BT file
c. Prepare the RCD to summarize daily transactions of the BT.
d. Record daily in the cashbook the total collections and deposits made during the day
based on RCD.
e. Forward two copies of the RCD to the C/M Accountant, together with the supporting ORs
and validated DS every end of the week for recording in the JCT.
4.2.2 For collections received by the BT as deputized collector of the C/M Treasurer, the BT shall:
a. Upon receipt of cash/check, issue OR provided by the C/M Treasurer, to acknowledge the amount received.
b. Fill up the OR in triplicate copies to be distributed as follows:
Original - Payor
Duplicate copy - Attached to original RCD and submitted to the C/M Treasurer upon remittance
Triplicate copy - Attached to duplicate copy of RCD for BT file
c. Prepare three copies of RCD based on the duplicate ORs.
Original and
Duplicate - C/M Treasurer
Triplicate copy - BT
d. Remit daily the collections or once the collections reach P5,000.00 to the C/M Treasurer, together with two
copies of RCD, and the duplicate ORs.
e. Upon receipt of the collections, the C/M Treasurer shall fill out and sign the acknowledgement portion of the
RCD to signify receipt thereof from the BT.
4.2.3 For collections made by the Deputized Barangay Collectors:
a. Collections shall be remitted daily to the BT
b. Prepare Report of Collections and Remittances (RCR) as shown in Annex 9.2 summarizing daily collections
c. The BT shall acknowledge receipt of collections by signing on the receipt portion of the RCR
4.2.4 All remittances shall be supported with RCR.
4.2.5 Collections and deposits for the barangay shall be recorded in the Cashbook
(Annex 8) maintained by the BT based on the RCD.
4.2.6 The C/M Accountant shall summarize all CMs including Debit Memos (DMs)
received from the Bank with the Bank Statement of the Barangay in the Report of
Bank Debit and Credit Memos (RBDCM) - Annex 10 and furnish the BT copy of the
RBDCM as basis in posting collections. The RBDCM shall likewise be the basis of
recording the transactions in the JCT.
4.2.7 Collections received through the bank or directly credited to the depository
account of the barangay shall be recorded in the Cashbook based on the RBDCM.
4.2.8 Upon receipt of the Bank Statement, the C/M Accountant shall prepare a
monthly Bank Reconciliation Statement (Annex 11).
4.2.9 Requisitions for new accountable forms for regular collections of the barangay
shall be made from the C/M Treasurer.
4.2.10 Requisitions and issuances of accountable forms shall be reported in the
monthly RAAF.
Accounting for Local Government
Units

Features and Policies

1) Accrual Accounting
2) One Fund Concept
3) Special Accounts in the General Fund
4) Chart of Accounts and Account Codes
5) Books of Accounts
6) Financial Statements
7) Appropriations, Allotment and Obligations
8) Financial Expenses
9) Perpetual Inventory of Supplies and Materials
10) Valuation of Inventory
11) Maintenance of Supplies and Property, Plan and Equipment Ledger
12) Construction of Assets
13) Public Infrastructures
14) Depreciation
15) Reclassification of Assets
16) Allowance for Impairment
17) Elimination of Contingent Accounts
18) Recognition of Liability
19) Interest Accrual
20) Accounting for borrowings and Loans
21) Elimination of Corollary and Negative Entries
Form and Content of Budget

1) The estimates of income certified collectible by the treasurer; and

2) The total appropriations covering the current operating expenditures
and the capital outlays.
THE BUDGET PROCESS

PREPARATION
The local treasurer shall submit to their local chief executive a certified statement
covering :

• Income and expenditures of the preceding year

• Income and expenditures of the first three quarters
• Estimated income and expenditures for the fourth quarter
• Estimated income for the ensuing year
LEGISLATIVE AUTHORIZATION
The approval by the sanggunian of the budget of the local government unit
requires the affirmative votes of a majority of all members thereof.
The approved budget is deemed to be operative and enforceable as of the
beginning of the fiscal year.
BUDGETARY ACCOUNTING

1) APPROPRIATIONS
2) ALLOTMENTS
3) OBLIGATIONS
SOURCES of INCOME

1) Tax revenues, fees and charges

2) Share from Internal Revenue Collections
3) Share from National Wealth
General Income Accounts

• Subsidy from other Local Government Units

• Subsidy from other funds
• Subsidy from Special Accounts
• Sales Revenue and Dividend Revenue
• Interest Income
• Gain on Sale of Securities
• Gain on Sale of Assets
• Sale of confiscated goods and properties
• Foreign exchange gains
• Miscellaneous operating and service income
• Fines and Penalties
• Income from grants and Donations
SPECIFIC INCOME ACCOUNTS

• Property Taxes
• Taxes on Goods and Services
• Others Taxes
• Other Specific Income
Methods of Accounting for Income

1) Accrual Method
2) Modified Accrual Method
3) Cash Basis
Accrual Method

Example Problem:
Received Notice of Funding Check Issued from the Department of
Budget and Management, together with credit memo from the bank for share
from internal collections in the amount of P200,000.

Cash in Bank-LCCA 200,000

Internal Revenue Allotment 200,000
Modified Accrual Method

 Example Problem:
 Municipality of Mhaylyn estimated its real property tax in the amount of
P120,000. This amount shall be distributed as follows: Municipal-40%;
Province – 35%; and Barangay – 25%. Upon collection, the entire amount
was deposited and distributed based on the sharing ratios.
Real Property Tax Receivable 150,000
Deferred Real Property Tax Income 150,000

Cash in Vault 150,000

Real Property Tax Receivable 150,000

Cash in Bank-LCCA 150,000

Cash in Vault 150,00
Deferred Real Prop. Tax Inc. 120,000
Real Property Tax 48,000
Due to LGUs 72,000

Due to LGUs 72,000

Cash in Bank-LCCA 72,000
GENERAL FUND

Consists of monies and resources not accruing to any other fund and shall
be available for payment of expenditures, obligations or purposes not
specifically declared by law as chargeable to or payable from, any other
fund, though transfers of monies or resources therefrom to other funds of
local government may be made by proper appropriation.
SPECIAL EDUCATION FUND

• Operation and maintenance of Public Schools

• Construction and repair of school buildings, facilities and equipment.
• Education research
• Purchase of books and periodicals
• Sports development
Example:

At the beginning of 2014, based on Real Property Tax Account Register, the
Municipal ABC set-up its special education tax receivable in the amount of
P500,000, of which 50% is the provincial share. Of this amount, P200,000
were collected and deposited with authorized depository bank. Accordingly
the provincial share, in the amount of P100,000, was appropriately remitted
by Municipality ABC.
The Municipal ABC also received its allotments for the period: Personnel
Services – P50,000; Maintenance and Other Operating Expenses – P20,000;
and Capital Outlay – P30,000. In addition, fund transfer from General Fund for
its subsidy was received in the amount of P50,000. Eventually, an amount of
P30,000 for salaries and wages was obligated and its payroll fund was set-
up, through the local disbursing officer, with the following information:
The cash advance for the above traveling expenses was granted and
accordingly liquidated and refunded after the official travel period. The
electric bill, office supplies and office equipment delivered are paid
immediately. The office equipment has a useful life of 5 years and a 10%
residual value based on its cost.
TRUST FUND

Consists of private and public monies received by local government or of a

local government official as trustee, agent or administrator, as a guaranty for
the fulfillment of some obligations.
Example:

The Municipal XYZ received grant from national government agency (NGA)
directly from the bank for road construction (P2,000,000) and construction
equipment (P500,000). The Municipal XYZ purchased a construction
equipment in the amount of P500,000, which was paid, net of tax, upon
delivery. Accordingly, the contract was issued and when 50% completed,
Municipal XYZ received and paid the first billings in the amount of
P1,000,000, net of tax. And when the project was completed, the balance was
paid in full, net of tax; and the construction in progress account was
transferred to Public Infrastructure account.
CLASSIFICATION of SUPPLIES or
PROPERTY

1) Expendable Supplies or Property

2) Non-expendable Supplies or Property
3) Non-personal Services
Procedures for Requisitions,
Deliveries and Issuance of Supplies
or Property

1) Requisition Issue Slip (RIS)

2) Purchase Request (PR)
Financial Statement

• Statement of Financial Performance

• Statement of Financial Position
• Statement of Changes in net asset
• Statement of Cash Flows
NOT-FOR-PROFIT ORGANIZATION

COLLEGES/UNIVERSITIES

NAME:_____________________________________ SECTION:__________

QUIZ 1

THEORY:

1. On January 2, 2011, a graduate of Ateneo established a permanent trust fund and appointed Security Bank as the trustee. The income from the trust fund is to be paid to Ateneo and used only by the school of education to support student scholarships. What entry is required on Ateneo’s books
to record the receipt of cash from the interest on the trust fund?

A. Debit and credit restricted current funds deferred revenue.

B. Debit cash and credit restricted endowment revenue.

C.Debit cash and credit endowment fund balance.

D.Debit cash and credit unrestricted endowment revenue.

2. Liway college, a private not-for-profit college, received P25 000 from Ms. Mary Basilio on April 30. 2011. Ms. Basilio stipulated that her contribution be used to support faculty research during the fiscal year beginning on July 1, 2011, administrat or of Liway awarded research grants totaling
P25 000 to several faculty in accordance with the wishes of Ms. Basilio. For the year ended June 30, 2011 Liway College should report the P25 000 contrbution as

A.Temporarily restricted revenues on the statement of activities

B.Unrestricted revenue on the statement of activities

C.Temporarily restricted deferred revenue on the statement of activities

D.An increase in the fund balance on statement of financial position

3. On November 30, 2011, Malcu Basil, an alumnus of Santo School a private not-for-profit high school, contributed P15 000, with the stipulation that the donation be used for faculty travel expenses during 2012. During 2012 Santo spent the entire donation in accordance with Malcu’s wishes. For
the year ended December 31, 2012, what was the effect of the donation on unrestricted and temporarily restricted net assets?

Unrestricted Net Asset temporarily restricted net asset

A. Increase decrease

B. No effect decrease

C. Increase no effect

D. No effect no effect

4. Unconditional Promises to give are recognized as contribution revenue when;

A.The promise is received

B.The related receivable is collected

C.The time or purpose of restriction is satisfied

D.The future event that binds the promisor occur

5. Net assets that are restricted by the governing board of a nongovernment not-for-profit organization are reported as part of;

A.Permanently restricted net asset

B.Temporarily restricted net asset

C.Unrestricted net asset

D.Either permanently restricted or temporarily restricted net assets, depending on the term of the restriction

PROBLEM

1. For the summer session of 2011, Siliman University assessed its students P1,700,000 (net of refunds), covering tuition and fees for educational and general purposes. However, only P1,500,000 was expected to be realized because scholarships totaling P150,000 were granted to students and
tuition remissions of P50,000 were allowed to faculty members’ children attending Siliman. What amount should Siliman include in the unrestricted current funds as revenues from student tuition and fees?

A.1,500,000 C. 1,650,000

B.1,550,000 D. 1,700,000

2. University of Santo Tomas unrestricted current funds comprised the following

Asset 5,000,000

Liabilities (including deferred revenue of 100,000) 3,000,000

The funds balance of net assets of University of Santo Tomas unrestricted current fund was

A.1,900,000 C. 2,100,000

B.2,000,000 D. 5,000,000

3. On July 31, 2011 St. Vincent College showed the following amounts to be used for

Renewal or replacement of college properties 200,000

Retirement of indebtedness on college properties 300,000

Purchase of physical properties for college purposes

But unexpended at 7/31/2011 400,000

What total amount should be included in St. Vincent plant funds at July 31, 2011?

A.900,000 C. 400,000

B.600,000 D. 200,000

4. The following funds were among those held by Centro Escolar University at December 31, 2011

Principal specified by the donor as non-expendable 500,000

Principal expendable after the year 2012 300,000

Principal designated from current funds 100,000

What amount should Centro Escolar University classify as regular endowment funds (or permanently restricted endowment)?

A.100,000 C. 500,000

B.300,000 D. 900,000

5. In 2011, University of San Agustin board of trustees established a P100,000 fund to be retained and invested for scholars hip grants. In 2011, the fund earned P6,000 which had not been disbursed at December 31, 2011. What amount should University of a
S n Agustin report in a quasi-endowment
fund balance at December 31, 2011?

A. 0 C. 100,000
 NON-PROFIT ORGANIZATIONS ACCOUNTING FOR HOSPITALS

QUIZ 2

NAME: DATE:

YR and SEC:

MCQ – THEORY

1.Gener al pur pose ex ter nal financial r epor ting by a health car e or ganization r equires pr esentation of

a.Fund gr oup infor mation by a not-for -pr ofit or ganization.

b.A statem ent of operation .

c.Separ ate statement of changes in equity, net assets, or fund balance.

d.A per for mance indicator only by for -pr ofit entities.

2.Equipment donated for use in a hospital should be r epor ted as

a.Other oper ating r evenues.

b.Non-oper ating r evenues.

c.A dditions to the unrestricted funds balance.

d.Additions to the r estr icted funds balance

3.Revenue fr om the par king lot oper ated by a hospital w ould nor mally be included in
2.Williams Hospital, a nonprofit entity affiliated with a religious group, reported the following information for the year en ded December 31, 2018.

Gross patient service revenue at the hospital’s full rates P980,000

Bad debt expenses 10,000

Contractual adjustments with third party payors 100,000

Allowance for discounts to hospital employees 15,000

Which of the following is least likely on hospital financial statements?

a.The net realizable value of receivable is P 855,000

b.The net patient revenue is P 865,000

c.Total contra patient revenue to be recoginize is P 115,000

d.Allowance for bad debts to be recognize in statement of operations for the year is P10,000.

3.Kash Hospital, a private sector nonprofit entity, has gross patient service revenue of P750,000, charity care of P75,000, a mounts disallowed by third party payors of P63,000, and donor-unrestricted contributions P110,000.

Which of the following is most likely to be reported charity care by hospital?

a.As net paitent service revenue of P75,000 on the statement operations.

b.The net patient revenue for the year reported P612,000

c.Only the notes to the financial statements for the year.

d.Increase in unrestricted net assets is P722,000.

4.Michael Hospital, a nonprofit hospital affiliated with a private university reported the following information for the year ended December 31, 2018:

Cash contributions received from donors for capital additions to be acquired in 2018, P150,000

Proceeds from sale at hospital gift shop and snack bar, P75,000

Dividend revenue not restricted by donors or by law, P25,000.

Which of the following is possible answer?

a.Cash received from sale of gift shop, snack bar, and dividend revenue should be reported as “other revenues and gains” on its statement of operations

b.Cash contribution from donors which are restricted are reported on the statement of activities.

c.A and B

d.None of the above

5.Child Care Center, Inc. a not for profit organization, receives revenue from various sources during the year to support its day care centers. The following cash amounts were received during 2018:

P2,000 restricted by the donor to be used for meals for the children.

P1,500 received for subscription to a monthly child care magazine with a fair market value to subscribers of P1,000.

P10,000 to be used only upon completion of a new playroom that was only 50% complete at December 31, 2018.

Which of the following statement is false?

6.Under Cura Hospital's established rate structure, patient service revenues of P9,000,000 would have earned for the year ended December 31, 2018. However, only P6,750,000 was collected because of charity allowances of P1,500,000 and discounts of P750,000 to third-party payors. For the
year ended December 31, 2018, which of the following statement is true?

a.Charity allowaces and discount are reported as adjunk account from patient revenue.

b.The gross patient service revenue in the amount of P8,250,000 must be recorded.

c.Charity allowances is Only the notes to the financial statements for the year.

d.The total charges to patient for the hospital rendered services before collection is P9,000,000.

7.On December 30,2018, Saint-Peter Hospital, a nonprofit organization, received a P7,000,000 donation of BW Co. shares of stock with donor-stipulated requirements as follows: Shares valued at P5,000,000 are to be sold, with the proceeds used to erect a building. Shares valued at P2,000,000
are to be retained, with the dividends used to support current operations. Which of the following statement is true?

a.Saint Peter Hospital report as temporarily restricted net assets on its 2018 statement of financial position is P7,000,000

b.Saint Peter Hospital report as unrestricted net assets on its 2018 statement of financial position is P5,000,000

c.Saint Peter Hospital report as increase in the financing activities on its 2018 statement of cash flow amounting P7,000,000 0

d.None of the above

8.In June 2018, Park Hospital purchased medicines from Jove Pharmaceutical Co. at a cost of P2,000. However, Jove notified Park that the invoice was being canceled, and the medicines were being donated to Park. Park should record this donation of medicines as

a.A memorandum entry only.

b.Other operating revenue of P2,000.

c.A P2,000 credit to operating expenses.

d.A P2,000 credit to non operating expenses.

9.GRC Hospital had the following cash receipts and disbursements for the year ended December 31, 2018

Collection from Patients P 2,500,000

Contribution for an established of term endownments 500,000

Tuition from nursing school 1,000,000

Interest received from investment in permanent

Endownment 175,000

Dividends received from investment in term endownments 200,000

Payment of supporting expenses 750,000

Payment of program expenses 1,075,000

The interest received from permanent endownment is restricted by donor for acquisition of medical equipment. Which of the following is least likely correct?

a.The net increase P1,875,000 from operating activities.

b.Net increase in unrestricted net assets for the year 2018 is P2,050,000

c.The increase cash provided by financing activities is P675,000

d.Dividend received from endownment investment should be reported as “Non – operating revenue – unrestricted”

10.GRC Hospital, a nonprofit hospital affiliated with GRC, received the following cash contributions from donors during the year ended December 31,2018:

Contributions restricted by donors for research P50,000

Neither of the contributions was spent during 2018, however, during 2019, the hospital spent the entire P50,000 contribution on research and the entire P250,000 contribution on
hospital equipment which was used during the year. Which the following statement is false.

a.Increase P300,000 from financing activities on it’s 2018 statement of cash flow.

b.Decrease P300,000 from financing activities and net assets released from restrictions for 2019.

c .No effect on the total assets for the y ear 2019

d.Hospital equipment for 2019 is P250,000

e.All of these is correct.

Voluntary Health and Welfare Organization

Name: ____________________________________ Date:___________________

Section:_______________

I.MULTIPLE CHOICE

1. A statement of functional expenses is required for which one of the following private non-profit organization?

a. Colleges c. VHWO

b. Hospital d. Performing Arts Organization

2. How will a non-government not for profit entity record an agency transaction in which it receives resources?

a. no entry is made in the accounts

b. debit the asset account and credit contribution revenue

c. debit the asset account and credit temporarily restricted net assets

d. debit the asset account and credit a liability account

3. May Pag-asa, a voluntary health and welfare organization, received a cash donation of P500,000 from Mr. Mendoza on November 15, 2017. Mr. Mendoza requested that his donation be used to acquire equipment costing P500,000 in January of 2018. For the ye ar ended December 31,2017, May
Pag-asa should report the P500,000 contribution on its,

a. statement of activities as unrestricted revenue

b. statement of financial position as temporarily restricted deferred revenue

c. statement of financial position as unrestricted deferred revenue

d. statement of activities as temporarily restricted revenue

4. Which categories are used in the statement of financial position of a nonprofit organization?

a. net assets, income, expenses

b. income, expenses, unrestricted net assets

c. assets, liabilities, and net assets

d. changes in unrestricted, temporarily restricted and permanently restricted net assets

5. In the statement of activities in a nonprofit organization, expenses should be deducted from

a. unrestricted net assets

b. temporarily restricted revenue

c. unrestricted revenue

d. permanently restricted revenue

6. An entity is a nongovernment not-for-profit involved in research. The statement of functional expenses should classify of the following as support services?

a. salaries of staff researchers involved in research

b. cost of laboratory supplies used in research

c. cost of equipment involved in research

d. salaries of fund raisers for fund used in research

7. A voluntary and health organization is permitted to use building facilities rent free. This should be recorded as:

a. a footnote in the financial statement disclosing the rent-free arrangement.

b. a contribution

c. rent expenses at the fair market value

a.I only c. both of I and II

b.II only d. neither I nor II

9. Which of the following organizations would be classified as voluntary health and welfare organization?

a. the Sierra Foundation, an environmental organization c. a synagogue

b. a private elementary school d. the local ballet company

10. Which of the following would result to reclassifications of net assets of a nonprofit organization?

a. expiration of donor-imposed restriction

b. expiration of donor-imposed condition

c. both expiration of donor- imposed condition and expiration of donor-imposed restriction

II. Problem.

1. Charity fund, is a voluntary welfare organization funded by contributions from the general public. During 2017, unrestrict ed pledges of P1,500,000 were received, half of which were payable in 2017, with the other half payable in 2018 for use in 2018. It was estimated that 10% of these pledges
would be uncollectible. With respect to the pledges, the amount that should be reported for 2017 as net contributions, under public support is? 675,000

2. United love, a voluntary health and welfare organization, received the ff. contributions in 2017:

P600,000 from donors who stipulated that the money not be spent until 2018

P400,000 from donors who stipulated that the contributions be used for the acquisition of equipment, none of which was acquir ed in 2018.

Land from the donor with a fair market value of P1,500,00 and a book value of P800,000, there is no restriction exists.

How much should United Love report as temporarily restricted net assets for the year ending Dec. 31, 2017 in the financial position? 1,000,000

3. Iisang Layunin, a VHWO had the following cash contribution and expenditures in 2017:

Unrestricted cash contribution of P1,200,000

Restricted cash contributions for the acquisition of property of P500,00

Cash expenditures to acquire property of P500,00

Restricted cash contribution for the research of P10,000

Cash expenditures for the research of P10,000

In the statement of cash flow, how much will be presented in;

Operating activities 1,200,000

Investing activities (510,000)

Financing activities 510,000

NAME : DATE:

YR/SEC:

I. MULTIPLE CHOICE

1. It is the process of analyzing, recording, classifying, summarizing and communicating all transactions involving the receipt and disposition of government funds and property and interpreting the results thereof.?

a. Government auditing b. Government budgeting

c. Government accounting d. National government

2. According to COA Cir No. 2013-002 dated January 30,2013, the New Government Accounting System, effective January 1, 2014, uses a standard chart of accounts with.?

a. 3 digits b. 5 digits

c. 4 digits d. 8 digits

3. The following are the objectives of the New Government Accounting System, which is not?

a. Simplify government accounting

b. conform to international Accounting Standards

c. Comply with the requirements of International Monetary Board

d. Generate periodic and relevant financial reports for better monitoring or performance

4. The new Government Accounting System must be comprehensive but flexible to ensure that the need of users of information ca n be addressed in a way, that these will be understood even by those who have no technical knowledge of accountancy. These users include all except?

a. Public managers b. Officials and employees of the agency

c. Tax payers d. None of the above

5. The financial statements under NGAS include all except?

a. Balance sheet b. Statement of changes in net assets

c. Statement of operations d. Cash flow statement

6. This is the basic of accounting under the New Government Accounting System?

a. Modified Accrual b. Cash basis

c. Accrual basis d. Strict accrual

7. Its main function is the availability and appropriation of funds for public services?

a. Department of Finance b. Commission on Audit

c. Department of Budget and Management d. Bureau of Treasury

8. What is the legal basis of Commission on Audit in promulgating accounting and auditing rules and regulations?

a. PD 1445 b. Constitution of the Republic of the Philippines

c. COA circular No. 20012-2003 d. PD 1445 and the Constitution of the Rep.of the Phil.

9. Which Government Body is responsible for the design and preparation of the New Government Accounting System?

a. Department of Budget and Management b. Bureau of Treasury

c. Commission on Audit d. Government Agencies

10. What is the role of BTr in relation to Government Accounting responsibility?

a. To receive and keep national funds and manage or control disbursements thereof.

b. To design, prepare and approve the accounting systems of government agencies.

d. Both A and C

11. Organizations Codes is one of the key elements of Unified Accounts Codes Structure, Which of the following is most one of those reflected by this element?

a. Department b. Agency

c. Operating Unit d. Government Owned and Controlled Corp.

12. The following are the systems followed in the New Government Accounting System except?

a. Commercial Accounting b. Double –Entry Accounting

c. Responsibility Accounting d. Fund Accounting

13. One of the key elements of Unified Accounts Codes Structure is the Funding Source Codes. Which of the following is not on e of those reflected by this element?

a. Revised Chart of Accounts b. Financing Source

c. Authorization d. Fund Category

14. As provided in the Constitution, no money shall be paid out of the National Treasury except in pursuance of?

a. Budget b. Presidents Executive Order

c. Fund d. Appropriation

15. Represents the accounts classification as to Assets, Liabilities, Equity, Income and Expenses?

a. Code b. Account Group

c. Major Account Group d. Sub-Major Account Group

16. It represents classification within account group, e.g for asset major account: cash and cash equivalent, investments, receivables, etc.

a. Major Account Group b. Cash and Cash equivalent

c. General ledger accounts d. general ledger contra accounts

17. Which of the following is a Sub-major Account Group in a revised chart of accounts?

a. Cash on Hand b. Cash and cash equivalent

c. Asset d. Petty Cash

18. According to the Revised chart of Accounts pe COA Circular 2013-002, which of the following is an Account Group?

a. Assets Account b. Investment Account

c. Cash in Bank Local Currency d. Treasury Bills

19.According to the Revised Chart of Accounts per COA circular 2013-002, which of the following is a Major Account Group?

a. Liabilities b. cash and cash equivalent

c. Loans and receivables Account d. Sinking Fund

20. What is the basis for coding the object classification in the COA revised chart of accounts?

a. Accrual basis b. Modified Accrual basis

c. Cash basis d. Modified Cash basis

CHAPTER 5: ACCOUNTING FOR DISBURSEMENT AND RELATED TRANSACTIONS

NAME:_________________________________ DATE: ____________________

YR. & SECTION: _______________________ PROFESSOR: __________________________

MULTIPLE CHOICE:

1.Received by the agency may be net of the amount of the taxes to be withheld by the agency, because of the tax remittance ad vice (TRA)?

A.NCA B. ALLOTMENT C. APPROPRIATION D. BUDGET

2.IT IS CONSTITUTE ALL CASH PAID OUT DURING A GIVEN PERIOD EITHER IN CURRENCY (CASH) OR BY CHECK.

A.DISDURSEMENTS B. OBLIGATION C. PETTY CASH FUND D. MAINTENANCE

3.ISSUED BY GOVERNMENT AGENCIES CHARGEABLE AGAINST THE ACCOUNT OF THE BUREAU OF TREASURY, WHICH ARE MAINTAINED WITH DIFFERENT MDS- GOVERNMENT SERVICING BANKS. A. COMMERCIAL CHECK B. MODIFIED DISBURSEMENT SYSTEM CHECK C.
DISBURSEMENT D. NCA

4.ISSUED BY THE GOVERNMENT AGENCIES CHARGEABLE AGAINST THE AGENCY CHECKING ACCOUNT WITH GOVERNMENT SERVICING BANK.

A.COMMERCIAL CHECK B. MODIFIED DISBURSEMENT SYSTEM CHECK C. DISBURSEMENT D. CHECK

5. THE FOLLOWING ACCOUNT SHALL BE DEBITED ONCE CASH ADVANCE HAD BEEN GRANTED.

A. CASH-MDS REGULAR B. ADVANCES TO OFFICERS AND EMPLOYEES

C. APPROPRIATE EXPENSE ACCOUNT D. CASH ADVANCE

6.WHICH OF THE FOLLOWING RULES IN GRANTING AND LIQUIDATION OF CASH ADVANCES IS NOT TRUE?

A CASH ADVANCE SHALL BE GIVEN ONLY FOR LEGALLY AUTHORIZED SPECIFIC PURPOSE.

B. NO OFFICER OR EMPLOYEE SHALL BE GRANTED CASH ADVANCE UNLESS HE/SHE IS PROPERLY BONDED IN ACCORDANCE WITH EXISTING LAW OR REGULATION EXCEPT FOR CASH ADVANCE FOR OFFICIAL TRAVEL. THE AMOUNT CASH ADVANCE WHICH MAY BE GRANTED SHALL NOT EXCEED THE
MAXIMUM CASH ACCOUNTABILITY COVERED BY HIS/HER BOND.

C. ADDITIONAL CASH ADVANCE MAY BE ALLOWED TO ANY OFFICIAL OR EMPLOYEE EVEN IF THE PREVIOUS CASH ADVANCE GIVEN TO HIM/HER IS NOT SETTLED/LIQUIDATED.

D.DISBURSING FUNCTION SHALL BE PERFORMED ONLY BY DULY APPOINTED OR DESIGNATED DISBURSING OFFICER. OFFICERS AND EMPLOYEES WHO ARE GIVEN CASH ADVANCES FOR OFFICIAL TRAVEL NEED NOT BE DESIGNATED AS DISBURSING OFFICERS.

7.WHICH OF THE FOLLOWING IS NOT REGARDING CASH ADVANCES FOR TRAVEL?

A.NO GOVERNMENT FUND SHALL BE UTILIZED TO DEFRAY FOREIGN TRAVEL EXPENSE OF ANY GOVERNMENT OFFICIAL OR EMPLOYEES, EXCEPT IN TH E CASE OF TRAINING, SEMINAR OR CONFERENCE ABROAD WHEN THE OFFICIALS OR OTHER PERSONAL OF THE FOREIGN MISSION CANNOT EFFECTIVELY
REPRESENT THE COUNTRY THEREIN, AND TRAVELS NECCESSITATED BY INTERNATIONAL COMMITMENTS.

B.THE OFFICERS/EMPLOYEES WHO MADE THE TRAVEL SHALL PREPARE THE LIQUIDATION REPORT WHICH SHALL BE THE BASIS FOR THE PREPARATIO N OF JEV.

C.OFFICIAL AND EMPLOYEES NOT AUTHORIZED TO TRAVEL MAY BE GRANTED CASH ADVANCE IN CERTAIN CASES TO COVER TRAVELING EXPENSES.

D.LIQUIDATION FOR CASH ADVANCES FOR LOCAL TRAVEL SHALL BE DONE WITHIN THE PERIOD OF 30 DAYS UPON RETURN TO THE PHILIPPINES FO R CASH ADVANCE FOR FOREIGN TRAVEL.

8.WHICH OF THE FOLLOWING ENTRY IS NOT USED TO RECOGNIZED THE RECEIPT OF NCA?

A.CASH-MDS, REGULAR

SUBSIDY FROM NATIONAL GOVERNMENT

B.CASH-MDS, SPECIAL ACCOUNT

CASH-TREASURY/AGENCY DEPOSIT, SPECIAL ACCOUNT

C.CASH-MDS, SPECIAL ACCOUNT

 SUDSIDY FROM NATIONAL GOVERNMENT

D.CASH-MDS

CASH-TREASURY/AGENCY DEPOSIT, TRUST

9.WHICH OF THE FOLLOWING IS NOT CONSIDERED AS A MODE OF DISBURSEMENT.

A.CHECKS B. INDIRECT PAYMENT METHOD C. ADVICE TO DEBIT THE ACCOUNT D. TAX REMITTANCE ADVICE

10.WHICH ENTRY TO RECORD THE GRANT OF CASH ADVANCE FOR TRAVEL.

A.DR. ADVANCES TO OFFICERS AND EMPLOYEES

CR. CASH-MDS, REGULAR

B.DR. ADVANCES TO OFFICERS AND EMPLOYEES

CR. SUBSIDY FROM NATIONAL GOVERNMENT

C.DR. DUE FROM OFFICER AND EMPLOYEES

CR. CASH-MDS, REGULAR

D.DR. DUE TO OFFICER AND EMPLOYEES

CR. CASH-MDS, REGULAR

11.WHAT IS THE ACCOUNT TO BE CREDITED IN REMITTING GOVERNMENT SHARE FOR PAG-IBIG CONTRIBUTION?

A.CASH- MDS B. SUBSIDY FROM NATIONAL GOVERNMENT C. PAG-IBIG CONTRIBUTION

D. DUE TO PAG-IBIG

12.WHICH OF THE FOLLOWING DISBURSEMENT ARE NOT EXCLUDED FROM PAYMENT USING LDDAP-ADA?

A.PAYMENT OF GOVERNMENT EMPLOYEES SALARIES B. REMITTANCE OF SOCIAL INSURANCE PREMIUM CONTRIBUTION TO GOVERNMENT CORPORATIONS. C. PAYMENT OF TERMINAL LEAVE AND RETIREMENT GRATUITY BENEFITS. D. PAYMENT OF A/P TO
UTILITY COMPANIES

13.ACRONYM OF NCA – NOTICE OF CASH ALLOCATION

14.ACRONYM OF DBM – DEPARTMENT OF BUDGET AND MANAGEMENT

15.ACRONYM OF LDDAP-ADA—LIST OF DUE AND DEMANDABLE ACCOUNT PAYABLE- ADVICE TO DEBIT ACCOUNT

16-18 ENUMERATE ATLEAST 3 MODES OF DISBURSEMENT

DISBURSEMENT BY CHECK

DISBURSEMENT BY CASH

LDDAP-ADA

19-20 GIVE ATLEAST 2 KINDS OF DISBURSEMENT BY CASH

CASH ADVANCES FOR TRAVEL

CASH ADVANCES FOR PAYROLL

Name__________________________Section _______________ Date _____________ Score _________

1)It is the Gross inflow of economic benefits or service potential during the reporting period when those inflows result in a n increase in net assets/equity, other than increases relating to contributions from owners.

a.Asset c. Expense

b.Revenue d. Net assets

2)Taxation revenue shall be recognized at?

a.Gross amount.

b.Gross amount deducted by any Expenses paid through the tax system.

c.Cash basis at all times. Accrual basis of recognizing taxation revenue can be use if applicable.

d.None of the above

3)Which of the following does not belong to the group?

a.Statement of Financial Position

b.Statement of Financial Performance

c.Statement of Management’s Responsibility for Financial Statements

d.Statement of Comparison of Budget and Actual Amounts

4)Which of the following is true regarding Unused Subsidy from the NG .

a.Unused subsidy shall be deposited to the NGA own account as its saving for the current year.

b.Unused subsidy need not be recorded but shall be reported at the Notes to Financial Statements.

c.Unused subsidy shall be remitted, back to the bureau of treasury.

d.Unused subsidy shall be reverted to make the balance zero at the end of the reporting period.

5)Closing entries __

a.Are optional steps

b.Affect only balance sheet accounts.c.

c.Permit the government agency to analyze routine and repetitive transactions the same way all the time.

d.Remove the balances from agency’s temporary accounts.

The following data are for no 1-3

Petty Cash Fund was established for estimated expenses of 20,000.

The petty cash fund is replenished for the following expenses:

Traveling expense 9,500

Office supplies expense 7,000

Other maintenance and operating expense 3,000

Total 19,500

6)What is the entry to record the establishment of the PCF?

a.Petty Cash 20,000

Cash - MDS, Regular 20,000

b.Petty Cash 20,000

Cash - National Treasury – MDS 20,000

7)What is the entry to record the replenishment of the PCF?

a.Traveling Expenses – Local 9,500

Office Supplies Expenses 7,000

Other Maintenance and Operating Expenses 3,000

Cash – MDS, Regular 19,500

b.Traveling Expenses – Local 9,500

Office Supplies Expenses 7,000

Other Maintenance and Operating Expenses 3,000

Petty Cash Fund 19,500

c.PCF 19,500

Cash – MDS, Regular 19,500

d.Posted in the Disbursement column of the RAOD.

8)What is the entry to record the return of unused PCF?

a.Cash – Collecting Officer 500

Petty Cash 500

b.Cash – Collecting Officer 500

Cash – Disbursing Officer 500

c.Cash – MDS, Regular 500

Petty Cash 500

d.Posted in the Receipt Column of the RAOD.

9)Entity XX is authorized to print accounting manuals for sale to other NGs. On June 18, 2016, Entity XX sold accounting manu als on account with a list price of P100,000 less trade discounts of 10%, 10% and 5%.

What is the entry to record the sale of the accounting manuals?

a.Accounts Receivable 90,000

Sales Revenue 90,000

b.Accounts Receivable 76,950

Office Supplies 76,950

c.Accounts Receivable 76,950

Sales Revenue 76,950

d.Accounts Receivable 90,000

Sales Revenue 90,000

10)On August 5, 2016, Entity YY received a 60-day, 9%, P12,000 promissory note from entity ZZ for accounting manuals sold, On October 4, 2016, Entity ZZ paid cash in settlement of its note.

What Is the entry to record the collection of notes receivable?

a.Cash – Collecting Officer 12,180

b.Cash – Collecting Officer 12,180

Notes Receivable 12,000

Interest Income 180

c.Cash – Collecting Officer 12,000

Notes Receivable 12,000

d.Cash – Collecting Officer 12,180

Interest Income 180

Sales Revenue 12,000

11)During the year 2018 Agency MM received the following Notice of cash allocation (NCA):

Constructive receipt of NCA for withholding taxes P 75,000

For current year’s appropriation 1,150,000

For prior year’s account payable 25,000

Total P1,250,000

Cash disbursements during the year amounted to P1,100,000.

What adjustments is made for the unused NCA at the end of the year?

a.Subsidiary from National Government 150,000

Cash-MDS, Regular 150,000

b. From National Government 125,000

Cash – MDS, Regular 125,000

c.Cash – MDS, Regular 125,000

Subsidiary from National Government 125,000

d.Subsidiary from National Government 75,000

Cash – MDS, Regular 75,000

12)On February 1, 2016, Entity ZZ an agency of the National Government awarded a contract to ABC, Inc. to construct a buildin g intended to earn rent income. Contract price is P22,400,000, inclusive of VAT, payable in two progress billings. Advance payment to contractor is 15% of the contract
price as mobilization fee while retention fee is 10% of the progress billing.

On May 1, 2016, Entity ZZ paid first billing of 50% of the contract.

On September 2 Entity ZZ received and paid the final billing less the retention fee and withholding tax of P700, 000.

What is the entry in the book of ZZ to record the 15% mobilization fee?

a.Advances to Contractors 3,360,000

Cash-MDS, Regular 3,360,000

b.Accounts Payable 3,360,000

Cash-MDS, Regular 3,360,000

c.Mobilization fee 3,360,000

Cash-MDS, Regular 3,360,000

a.Construction in Progress-Building and

Other structures 11,200,000

Advances to Contractor 3,360,000

Due to BIR 700,000

Guaranty-Security deposits payable 1,120,000

Cash-MDS, Regular 6,020,000

b.Construction in Progress-Building and

Other structures 11,200,000

Advances to Contractor 3,360,000

Accounts Payable 7,840,000

c.Construction in Progress-Building and

Other structures 11,200,000

Guaranty-Security deposits payable 1,120,000

Accounts Payable 10,080,000

d.Construction in Progress-Building and

Other structures 11,200,000

Accounts Payable 11,200,000

14)Using the data in no. 7, assume that the final billing was paid for the balance of the contract price less the retention f ee and the required withholding tax. What is the entry to recognize the payment of the final billing?

a.Accounts Payable 11,200,000

Guaranty-Security Deposits Payable 1,120,000

Due to BIR 700,000

Cash-MDS, Regular 9,380,000

b.Accounts Payable 11,200,000

Cash-MDS, Regular 11,200,000

c.Construction in progress -Buildings 11,200,000

Advances to contractor 1,680,000

Due to BIR 700,000

Cash-MDS, Regular 8,820,000

d.Investment property Building22,400,000

Cash-MDS, Regular 22,400,000

15)The following Accounts with their Corresponding balances before closing were taken from the accounting records of agency JJ on December 31, 2018 :

Accumulated Surplus (Deficit), Beginning 250,000

Subsidy from National Government 500,650

Registration fees 15,500

Other business income 25,000

Other service income 50,500

Salaries and Wages, Regular 165,500

PERA 15,500

Travelling expense -Local 10,000

Travelling Expenses-Foreign 55,000

Office supplies Expenses 25,000

Water expense 11,000

Security Services 18,000

What is the balance of the Accumulated Surplus (Deficit), end to be presented in the Statement of Financial Position as of De cember 31, 2018

a.131,650

b.631,650

c.(131,650)

d.(631,650)

Give 3 examples of other receipts

Subsidy from National Government

Intra - Agency Fund Transfer

Inter - Agency Fund Transfer

2 classification of revenue

19) Exchange Transaction

20) Non – Exchange Transaction

Name__________________________Section _______________ Date _____________ Score _________

Choose the correct answer.

1. Which of the following funds are classified as governmental funds?

A. The general and special revenue funds B. Private-purpose trust and Agency funds

C. Special revenue and Permanent funds D. Internal service and Enterprise funds

2. What fund concept that the 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?

A. One fund concept B. Two fund concept

C. Three fund concept D. Four fund concept

3. What fund maintained by the Barangay?

A. General Fund B. Calamity Fund

C. Trust Fund D. Special Fund

4. Regarding on Article 423, IRR of R.A. No. 7160 on or before the fifth day of what month of each year, the city treasurer jointly with city accountant shall issue a certified statement of actual income of the past year?

A. September B. August

C. December D. January

5. Which of the following is not source of income of Local Government Units?

A. Tax expenses, fees and charges B. Share from Internal Revenue Collections

C. Share from National Wealth D. Tax revenues

6.The town of Jessa has no supplies inventory in its general fund on January 1, 2018. During 2018, Jessa incurred expenditures of P290,000 for the acquisition of supplies. On December 31, 2018, Jessa’s inventory of supplies amounted to P50,000. Assume Jessa uses the purchase method of
accounting for supplies in its general fund and that the village reports on the calendar year. On December 31, 2018, the gene ral fund of Jessa should credit:

A. Expenditures P240,000 B. Fund balance-Reserved for Inventories P50,000

C. Expenditures P50,000 D. Fund Balance-Unreserved for inventories P240,000

7. The City of Caloocan uses the consumption method to report its inventory of supplies on its general fund balance sheet. Wh at account is debited in the general fund when Caloocan acquires supplies?

A. Supplies Expense B. Expenditures

C. Inventory of Supplies D. Fund balance-Reserved for inventories

8. On September 3, 2018, the City of Valenzuela, which reports on a calendar-year basis, ordered five police cars at an estimated cost of P320,000. On October 4, 2018, the police cars were received, and the actual cost amounted to P317,000. Valenzuela e ncumbered the appropriation for police
cars in its general fund when the cars were ordered. When the police cars were received, the general fund should:

A. Debit Encumbrances P320,000 B. Debit Expenditures P317,000

C. Credit Expenditures P317,000 D. Credit Encumbrances P320,000

I. Enumerate the LGU’s budget process.

PREPARATION

AUTHORIZATION

EXECUTION

ACCOUNTABILITY

II. Give the five Appropriations and Commitments of Barangay Accounting System.

GENERAL FUND

DEVELOPMENT FUND 20%