Financial Assets

Financial insruments-

Financial Asset

Financial Liability

Initial recognition

When an entity becomes a party to the contractual provision of the instrument.

Measurement

Changes in FV
FA at FV through FV FV Yes, recognized in
Surplus/Deficit surplus/deficit
Held-to-maturity Amortized cost using X
Loans and receivables eim X
FV + Transaction cost
Available-for-sale FV Yes, recognized in
financial assets equity

Cash and cash equivalents

Cash

1. Cash on Hand
2. Cash in Bank
3. Cash Treasury Accounts

Unreleased checks--drawn but not yet given to the payees as of year-end

*Procedures for adjustments for unreleased commercial checks does not apply to Cash-MDS
accounts

Cancelled checks—stale, voided, or spoiled.

*Stale if has been outstanding for over 6 mons

Petty Cash Fund

Guidelines

1. Head of Agency-approve the amount of PCF sufficient to defray recurring petty expenses for 1
month.
2. PCF Custodian- be properly bonded whenever amount of PCF exceeds 5K.
3. PCF shall be maintained using imprest system.
 4. PCF shall be kept separately from other advances or collections and shall not be used to pay
regular expenses.
5. PCF payments shall not exceed 15K per transaction, except authorized by law or COA. Splitting
of transactions to avoid exceeding the ceiling is prohibited.
6. Canvas from at least 3 suppliers for purchases 1K and above, except when made while on official
travel.
7. PCF disbursements shall be supported by Petty Cash Vouchers, invoices, ORs, or other evidence
of disbursements.
8. Replenishment as soon as disbursement reach at least 75% or as needed.
9. At y/e, PCF custodian shall submit all unreplenished Petty Cash Vouchers to Accounting Unit
10. Unused balance of PCF shall not be closed at y/e. Only upon termination, separation,
retirement, or dismissal of PCF custodian

Adjusting entries:

Unreleased Commercial Checks

Cash in Bank, Local Currency-Current

A/P

Cancelled Commercial Checks

*CY or PY Cash in Bank- Local Currency, Current

A/P

Cancelled MDS Checks

*CY Cash-Modified Disbursement System (MDS), Regular

A/P

*PY Accumulated Surplus/ (Deficit)

A/P

Petty Cash Fund

*Establishment Petty Cash

Cash-MDS, Regular

*Replenishment Appropriate Expense Accounts

Cash-MDS, Regular

*No replenishment Appropriate Expense Accounts

 Petty Cash

*PCF Custodian retires Cash-Collecting Officer

Petty Cash

Cash Shortage/Overage of Disbursing Officer

Cash shortage- liability of the disbursing officer

Cash Overage – Forfeited in favor of the govt if not satisfactorily explained

Dishonored Checks