 Petty
Reviewer: Chapter 6 Disbursement
Notice of Cash Allocation
 Authority of an agency to pay:
 Pay their operating expenses
 Purchases of supplies and materials
 Acquisition of PPE
 Accounts payable
 Other authorized disbursements through
the issue of MDS checks, ADA or other
modes of disbursements.
 MDS or ADA shall not exceed NCA
 Monitored through RANCA
 Credit to Special MDS is for payment of
retirement gratuity/terminal leave
Notice of Transfer of Allocation
 Authority of the regional and operating
units to:
 Pay their operating expenses
 Purchases of supplies and materials
 Acquisition of PPE
 Accounts payable
 Other authorized disbursements through
the issue of MDS checks, ADA or other
modes of disbursements.
 MDS shall not exceed NTA received
 Adoption of Common Fund System where
cash allocation balances of agencies under
the Regular MDS Account may be used to
cover payment of current year’s accounts
payable after satisfying regular operating
requirements in Monthly Cash Program
-MODES OF DISBURSEMENT-
1. Disbursement by check
 Drawn only upon approval of DV
 Payment of regular expenses which cannot
be paid through ADA or PCF or advances
for operating expenses
 Check issued shall be reported and
recorded whether released or unreleased.
o Two types of checks
 MDS- chargeable against the
account of Treasurer of Philippines
 Commercial checks- issued by
NGAs chargeable against Checking
account in GSBs
2. Disbursement by cash
 Payment out of cash advances granted to
the regular and disbursing officer for:
 Personal services
expenses
and MOOE
 All are covered by DVs/payrolls/Petty Cash
Vouchers
 Advance to employees may cover:
 Salaries and wages
 Travels
 Special time-bound undertakings
 Petty operating expenses
 Granting shall be governed by:
1. No cash adv unless legally
authorized for specific purpose
2. Shall be reported on and liquidated
as soon a purpose has been served
3. No additional cash adv unless
previous cash advance given is
settled/liquidated
4. No officer or employee shall be
granted cash advance. XPN: Cash
advance for official travel
5. Disbursing officers shall be
permanently appointed officials
6. Only duly appointed disbursing
officers may perform disbursing
functions
7. Transfer of cash from one officer to
another is not allowed
8. Cash adv shall be used solely for
specific legal purpose for which it
was granted.
 CASH ADVANCE FOR PAYROLL
o Granted by Regular Disbursing
Officer
o Shall not be used for encashment of
checks or for liquidation of previous
or other cash adv
o Liquidation shall be made 5 days
after the end of pay period
 CASH ADVANCES FOR OPERATING
EXPENSES OF GOVERNMENT UNITS
WITHOUT COMPLETE SET OF BOOKS
OF ACCOUNTS
o Field/extension/satellite offices are
some without complete set of books
o May be granted with cash advances
covering two months
o They shall maintain a Cash
Disbursement Register
o Disbursing officer shall submit within
5 days after month-end the certified
copies of CDReg
 o Imprest system
 CASH AVANCES FOR TRAVEL o All replenishment are charged to expense
o travels that are urgent and extremely o Replenish as soon as it reach at least 75%
or as needed
needed
o Allowed amounts not exceeding 15,000
o Minimum expenditure and beneficial o Unused balance of PCF shall not be
to the agency/country closed/refunded at the end of the year.
o No gov’t fund shall be utilized to o PCFC shall be submitted to accounting
defray foreign travel expenses of any division/unit
gov’t official or employee. XPN:
 CASH ADVANCES FOR PETTY CASH FUND
training seminar or conference
OF GOVERNMENT UNITS WITHOUT
o Officials and employees authorized COMPLETE SET OF BOOKS OF ACCCOUNT
to travel shall be granted adv to o Needs two months operating requirements
cover travel expenses. for authorized petty and other
 DOCUMENTATION: miscellaneous expenses to finance their
o Local Travel operations
i. Office Order/Travel Order -ACCOUNTING FOR CANCELLED
ii. Duly approved Itinerary of Travel (IoT) CHECKS-
iii. Certification from the accountant that the  Cancelled when stale, voided or spoiled
previous cash advance has been liquidated
and accounted for in the books. -ACCOUNTING FOR DISALLOWANCE-
 Accounted only when they become final and
o Foreign travel executory
i. Office Order/Travel Order
-ACCOUNTING FO OVERPAYMENT-
ii. Duly approved IT;  Example: payment of payroll
 Refunds shall be demanded of the employees
iii. Letter of invitation of host/sponsoring concerned
country/agency/organization;
3. Disbursement through LDDAP-ADA
iv. For plane fare, quotations of three travel Account
agencies or its equivalent;  Settlement of accounts payable due the
creditors/payees of all NGAs and their OUs
v. Flight itinerary issued by the airline/ticketing
 Excluded in the implementation:
office/travel agency;
o Payment of terminal leave and retirement
vi. Copy of the United Nations Development grant
Programme (UNDP) rate for the daily subsistence o Remittance of social insurance premium
allowance (DSA) for the country of destination for contributions
the computation of DSA to be claimed; o Payment of accounts payable to utility
companies
vii. Document to show the dollar to peso exchange o Other payables which cannot be
rate at the date of grant of cash advance; conveniently paid through ADA
viii. Where applicable, authority from the OP to -DISBURSEMENT THROUGH ELECTRONIC
claim representation expenses; and MODIFIED DISBURSEMENT SYSTEM AS PART
OF MODIFIED DISBURSEMENT SCHEME-
ix. In case of seminars/trainings:
 Upon implementation of Treasury Single
-Invitation addressed to the agency inviting Account
participants (issued by the foreign country)  Covers spending of agencies, offices, and
-Acceptance of the nominee as participants (issued instrumentalities under the Executive Branch,
by the foreign country) inc SUC, together with other Executive Offices
-Programme Agenda and Logistics Information using GSB (kahit judiciary, exec, etc. basta
nagmamaintain MDS sub accounts sa LBP)
x. Certification from the accountant that the
previous cash advance has been liquidated and -DISBURSEMENTS THROUGH CASHLESS
accounted for in the books. PURCHASE CARD SYSTEM-
 Alternative mode of payment for goods and
 CASH ADVANCE FOR SPECIFIC services
PURPOSE/TIME BOUNDING UNDERTAKING  Like a credit card and shall only be used for
o Accounted as Advances to Special pre-identified items within the body limit
Disbursing Officer  Read more

 CASH ADVANCES FOR PETTY OPERATING 4. Disbursement through TRA

EXPENSES
o For one month
 Serially-
numbered Reviewer: Chapter 5 Revenue and other Receipts Revenue
document recognition for:
prescribed by DBM used by NGAs in remittance 1. Interest- time proportion
of withheld taxes 2. Royalties- as they are earned
3. Dividends- when shareholder’s right to receive
(read last two pages) payment is established.

 All revenues shall be deposited in the NT or in

duly authorized depository of the Government
 Receipts shall be recorded only as Special, Exchange of similar goods- not revenue
Fiduciary and Trust Funds only when generating
authorized by law and in accordance with the Exchange of dissimilar goods- revenue
Permanent Committee generating
 Permanent Committee: recommend the
reversion to the general fund of amounts which NON-EXCHANGE TRANSACTION
are:
o No longer necessary for the attainment  Derived mostly from taxes, gifts and donations,
of the purpose goods in kind and fines and penalties.
o Needed by the GF for emergency  Recognition or revenue
o Violative of the rules and regulations o Tax- at gross amount (not reduced for
adopted by Committee expenses paid through tax system)
 SOURCES OF REVENUE AND OTHER o Gifts and donations, other than services
RECEIPTS in kind- at FV
1. Exchange transaction o Goods in kind received without
2. Non-exchange conditions- recognized as revenue
immediately
EXCHANGE TRANSACTION o Donation in kind- revenue
Sales of goods or services to a third party or other  Measurement of revenue- at the amount of
NGAs increase in net assets recognized by the entity
1. Service income unless liab is also required to be recognized
2. Business Income  Initial measurement- @FV as at the date of
Use by other entity of assets yielding interest, acquisition
royalties, and dividends, or similar types  Taxes do not include fines and penalties
1. Interest income imposed for breaches of law
2. Royalties  Tax Expenditures are foregone revenue not
3. Dividends expenses, do not rise inflow of ALRE of gov’t.
Shall not be grossed up
Revenue from sale of goods shall be  Fines recognized as revenue when it meets the
recognized when ALL of the following are definition of an asset
satisfied: (RACEE)  when an entity collects fines in capacity of an
1. Risk and rewards of ownership is transferred agent, fine is not recognized as revenue of
3. Amount of revenue can be measured reliably collecting entity
5. Cost incurred or to be incurred can be measured  Measure @ best est of inflow of resources
reliably  Bequests- @ FV of asset received or is
2. Entity retains neither continuing managerial receivable
involvement nor effective control  Gifts and donations- when it meets def of A
4. Economic benefit or service will flow  Goods in-kind tangible assets transferred
without charge but may be subject to
Revenue from sale: straight line basis stipulations.
Rendering services: stage of completion  Services in kind- not required to be measured
XPN: if services is done only with intermediate as an asset but is encouraged to be
stages, use straight line disclosed in the notes
 Pledges- not an asset or revenue. Upon
Outcome of transaction can be estimated transfer to the recipient, it is a gift or donation
reliably when: (RPSC)  Dishonored checks-
1. Revenue can be measured reliably 1. dishonor by nonpayment occurs when:
2. Probable econ benefit or service will flow o Check is presented for payment and
3. Stage of completion can be measured reliably payment is refused or cannot be obtained
4. Cost incurred or to be incurred can be measured o Presentment is excused and checks is
reliably overdue and unpaid
Note: when the outcome of the transaction only 2. Dishonor by nonacceptance
involves rendering of services cannot be measured o Acceptance is refused by law or cannot be
reliably, record only the revenue up to the extent of obtained
expense that is recoverable
 o Presentment o Purchase price+ import
got acceptance Reviewer: Chapter 10 PPE duties+ non-refundable
in excused and purchase taxes (after
check is not accepted deducting trade discounts and rebates
o Net method lagi. Price minus discount whether
taken or not

Property, Plant and equipment are:

1. Tangible asset
2. Not intended for resale in the ordinary course of
the business
3. Expected to be used for more than one RP
3. On Installment Basis
Recognition o If installment, difference between cash price
1. Probable that future economic benefit or service equivalent and total payment is equal to the
potential will flow interest over the credit d
2. FV of item can be measured reliably 4. Purchase with promotional items
3. Government has the beneficial ownership and o Allocate the price
control o If promotional item is the same as the PPE,
4. Used to achieve government objectives purchase cost shall be allocated to total
5. Meets threshold of 15,000 quantity plus promotional item
5. Promotional item is different form the PPE
Initial recognition o It shall be deducted from the total cost and the
GEN: @cost balance shall be allocated to the total quantity
XPN: FV at acquisition purchased
6. Lump sum
Cost comprises: o Cost shall be apportioned to assets in
1. Purchase Price
determining the depreciation
2. DACS
o Cost of employee benefit
Construction of PPE
o Cost of site preparation  All will be under construction in progress
o Initial delivery and handling cost  Expenses will be capitalized like interest,
o Installation and assembly cost license fee, etc
o Cost of testing (after deducting net proceeds  For loans acquired for construction of
from selling any items produced while infrastructure contracted by NG, borrowing
bringing the asset to location and condition cost shall not be capitalized. Interest on such
like samples produced while testing) shall be expensed
o Professional fees
3. PV of decommissioning and restoration cost
NOTE: PV of dismantling cost shall not be included
in the computation of RV

Cost not qualified for recog of PPE

1. Opening new facility
2. Introducing new product or service
3. New location
4. Administration and other general overhead costs

Different modes of acquisition

 Purchase
 Construction
 Exchange Transaction
 Non-exchange transaction
 Transfer
 Finance lease

Purchase of PPE
1. On Cash Basis
o Recognize at cost
o Includes cash paid on bringing the asset to the
location for intended use

2. On Account
o Subject to cash discount