Name : Melvette Leocario BSMA – 3B

Student number : 120180772

ACCOUNTING FOR GOVERNMENT AND NON-PROFIT ORGANIZATION

(Chapter 3 – The Revised Chart of Accounts)

Questions & Answers:

1. Define and discuss why the revised Charts of Accounts in COA circular No. 2013-002 dated
January 30, 2013 was created

The Commission on Audit as member of the International Organization of Supreme Audit Institutions
(INTOSAI) is encouraged to adopt relevant International Accounting Standards. The IPSASB of the
International Federation of Accountants which promulgates the IPSASs, acknowledges the right of
governments and national standards-setters to establish their respective accounting standards and
guidelines for financial reporting in their jurisdictions. And to provide new accounts for the adoption of
the PPSAS which were harmonized with the IPSAS to enhance the accountability and transparency of the
financial reports, and ensure compatibility of financial information, the COA revokes COA Cir. No.
2004-008 and the COA Circular No. 2013- 002 dated January 30, 2013, Adoption of the Revised Chart of
Accounts for National Government Agencies, is adopted. Furthermore, COA issued Circular No. 2014-
003, dated April 15, 2014, Implementing Rules and Guidelines on the Conversion from the Philippine
Government Chart of Accounts under the NGAS to the Revised Chart of Accounts for National
Government Agencies; and Circular No 2015 – 007, dated October 22, 2015, Prescribing the Government
Accounting Manual for Use of All National Government Agencies.

2. What are the five (5) classifications of expenses in the Revised Chart of Accounts in COA Circular
No. 2013-002 dated January 30, 2013? Give the sub-major account group classifications.

Per COA Circular No. 2013-002 dated January 30, 2013, Revised Chart of Accounts, the

Expense accounts are classified into:

1. Personnel Services:

a. Salaries and wages c. Personnel Benefit Contributions

b. Other Compensation d. Other Personnel Benefits

2. Maintenance and Other Operating Expenses:

a. Traveling Expenses e. Communication Expenses

b. Training and Scholarship Expenses f. Awards/Rewards and Prizes

c. Supplies and Materials Expenses g. Survey, Research, Exploration and

d. Utility Expenses Development Expenses

h. Demolition/Relocation and m. Repairs and Maintenance

Desilting/Dredging Expenses n. Financial Assistance/Subsidy

i. Generation, Transmission and o. Taxes, Insurance Premiums and Other

Distribution Expenses Fees

j. Confidential, Intelligence, p. Labor and Wages

Extraordinary Expenses q. Other Maintenance and Operating

k. Professional Expenses Expense

l. General Services

3. Financial Expenses:Financial Expenses

4. Direct Costs:

a. Cost of Goods Manufactured b. Cost of Sale

5. Non-Cash Expenses:

a. Depreciation d. Losses

b. Amortization

c. Impairment Loss

3. Enumerate the five (5) account code structure of the Revised Chart of Accounts consisting of eight
(8) mandatory digits. Explain briefly.

COA Circular No. 2013-002 provides that the accounts code structure consists of eight (8) mandatory
digits, as follows:

1. Account Group – This represents the accounts classification as to Assets,

Liabilities, Equity, Income and Expenses.

2. Major Account Group – This represents classification within the account group; e.g.,

for asset major accounts: Cash and Cash Equivalent, Investment, Receivables, etc.

3. Sub-Major Account Group – This represents classification within the major account group; e.g., for
Cash and Cash Equivalent: Cash on Hand, Cash in Bank – Local Currency, Cash in Bank – Foreign
Currency, etc.

4. General Ledger Accounts – This represents the accounts to be presented in detailed

financial statements; e.g., Cash-Collecting Officer, Petty Cash, etc. This is composed of
two segments: the first two digits from the left is the general ledger code, and the last

digit is reserved for contra accounts, like: Allowance for Impairment, Accumulated

Depreciation, etc.

5. General Ledger Contra-Accounts – Contra-accounts are shown as reduction from the related
accounts, and this includes, among others, Allowance for Impairment,

Accumulated Depreciation, etc. as shown in the preceding item (General Ledger Accounts).

4. Enumerate and explain briefly the elements of Financial Statement per COA Circular No. 2013-
002

Elements of Financial Statements

Assets- are any tangible object owned by the company which has its value for accounting purposes and
are recognized in conformity with the generally accepted accounting principles. It's an economic resource
of an agency having some other values such as revalued amounts, current cost, net realizable value, fair
value and recoverable value.

Liabilities- are any economic obligations of a company that can also include certain deferred credits
recognized and measured in accounting principles under Philippine public sector accounting standards

Equity- the money value of a property or of an interest in a property or any assets in excess of claims or
liens against it.

Income- a gain or recurrent benefit usually measured in money that derives from capital or labor. It is a
gross inflows result in increase in net asset or equity other than increases from contributions of owner.

Expense- is a decrease in economic benefit of a company in form of outflow or consumption of assets.

And can also be an incurrence of liabilities and a result of decrease in net asset or equity of an agency.