Governmental Accounting

Chapter 5 (Part 2)
Accounting for the Governmental transactions

Chapter (5)
Accounting for Governmental transactions
 Chapter Outline:

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This Chapter will deal mainly with governmental transactions related to :
1. Current Payments (Spending). 3. Governmental Imprests.
2. Current Collections. 4. Investment Operations.

Second: Current Collections (Subsidiary Treasury)

1) Collections through Subsidiary Treasury : Temporary account (Dr.)

Cash Collected under settlement XX

Revenues X
Other Account X
2) Cash collected by subsidiary treasury either be transferred to:

A) Main Treasury B) Central Bank (Baba)

Treasury X Central bank X
Cash Collected under Settlement Cash Collected under Settlement
X X
If transfer is to another main treasury in
another governmental entity
Current debit amounts under settlement
X
Cash Collected under Settlement
X

Example (1): assume a certain governmental subsidiary treasury collected 100,000

L.E (of which 10% Tax).
Required: The accounting entry to record the above process.
1. Collections through Subsidiary Treasury:
Cash Collected under settlement 100,000
Revenues 90,000
Current Credit amounts under settlement 10,000

2. Cash collected by subsidiary treasury either be transferred to:

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 A) Main Treasury B) Central Bank (Baba)
Treasury 90,000 Central bank 90,000
Cash Collected under Settlement 90,000 Cash Collected under Settlement 90,000
If transfer is to another main treasury
in another governmental entity
Current debit amounts under settlement 90,000
Cash Collected under Settlement 90,000
Current credit amount under settlement 10,000
Cash Collected under Settlement 10,000

Second: Current Collections (Main Treasury)

1. Collections through main Treasury :
Treasury XX
Revenues XX
2. We have (3 cases):
CASE (A) CASE (B)
1. Collection by the main treasury
from the benefit of other G.U or
Collection by main from Sub
Collection from a Subsidiary of
another G.U
Treasury X Tresaury X
Cash Collected under Settlement Current credit amounts under Settlement
X X
2. Settlement of amounts to other G.U
C.C amounts under settlement
Cheques
Cheques
Central bank
CASE (C): Transfer the amounts form main Treasury  C.B
Central bank XX
Treasury XX

Example (1): a certain governmental unit collected the following amounts through its
main treasury

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 - 400,000 L.E and
- 150,000 L.E for another G.U
Required: The accounting entry to record the above process.

Collections through Main Treasury:

Treasury 400,000
Revenues 400,000
Collections for another G.U:
Treasury 150,000
C.C Amounts under settlement 150,000
Transfer to C.B:
Central bank 550,000
Treasury 550,000

Example (2): Authority of housing and new zone collected the following amounts:
- 200,000 for service via subsidiary.
- 750,000 for service via main subsidiary.
- 150,000 for selling a new applications via main treasury.
The subsidiary transferred all amounts to main treasury which transferred all revenues to central
bank.