Page 1 of 10

Name :
Course and Year :
Subject : Accounting for Government and Non-Profit Organizations
Class Schedule : Friday (10:00 – 11:00 am)
Instructor : Cyril Marie S. Ramos, CPA, MBA

Module 9: The Government Accounting

Intended Learning Outcomes

 Discuss the books of accounts and registries in government accounting
 Discuss the government accounting cycle
 Perform the necessary steps in the government accounting
cycle
 Prepare the necessary entries and documents in relation to every step of the
government accounting cycle.

Introduction
Welcome to Module 9! After learning about the budget cycle of the government, it is now
time to learn how to account for every authorized transaction of the government. Here, we
ought to learn not just the preparation of the accounting requirements (entries and financial
reports) but also the preparation of other relevant documents in government accounting
such as the registries and other accountability reports.

Activity
Recall your accounting subjects. Now, enumerate the accounting cycle used by
private entities and describe each by completing the template/table below:

Step Description of the step (answer the Output

question, how?)
1. Analyzing Analyze if the transaction is reportable Decision if whether
or non-reportable. the transaction will
It is to be decided whether the be recorded or not.
transaction should be recorded or not.
Recorded – affects the entity’s A, L, C,
R, E
2. Journalizing Prepare journal entries: Journal Entry
Dr xxx
Cr xxx
3. Posting Posting journal entries to the general General ledger
ledger

4. Trial Balance Summarize the balances of the general Unadjusted Trial

ledger Balance

5. Adjusting Prepare adjusting entries in order to Adjusting Entries

Entries ensure that accurate balances are
 Page 2 of 10

reflected in the general ledger, which will

eventually be reflected in the financial
statements.
6. Adjusted Trial Preparation of trial balance after Adjusted TB
Balance considering all the adjustments (Worksheet)
(Worksheet)
7. Closing Entries Close the temporary accounts (IS Closing Entries
accounts = Rev and Exp) to the IS
Account.
Close the IS account and Drawings
Account to the Capital Account
8. Post-closing Preparation of trial balance after Post-closing TB
Trial Balance considering all the closing entries
9. Prepare the
financial
statements –
Statement of
Financial
Performance
Statement of
Financial Position

Analysis

The accounting cycle that you have learned in your previous accounting subjects is still
the same in the government accounting. The only difference however, is that there are
other documentary requirements imposed under government accounting. These are
budgetary controls. Example of these are the registries which will track government
spending and is a tool to ensure that all government spending will not go over what has
been allowed (appropriated) or authorized (Obligational Authority/ allotment and
disbursement authority).

It must be further noted, that concepts applied in the procedures performed in accounting
for transactions of private entities are the same concepts applicable under government
accounting.

Abstraction

1. Books of Accounts and Registries

a. Journals
i. General Journal
ii. Cash Receipts Journal
iii. Cash Disbursement Journal
iv. Check Disbursement Journal

b. Ledgers
i. General Ledgers
ii. Subsidiary Ledgers
 Page 3 of 10

c. Registries / Budget Records

(Used to monitor budget, kept by the budget division)
i. Registries of Revenue and Other Receipts (RROR)
(Monitors the budgeted amounts, actual collections and remittances
of revenue and other receipts)

ii. Registry of Appropriations and Allotments (RAPAL)

(Monitors appropriation and allotments, ensures that allotments are
not more than appropriations)

iii. Registries of Allotments, Obligations, and Disbursements

(RAOD)
(Monitors allotments received, obligations incurred and actual
disbursements made. Ensures that disbursement is not beyond obligations
incurred, and that obligation incurred is not beyond allotments received.
Separate RAOD shall be kept for every object of expenditure:

Objects of Expenditures:
a. Personnel Services (PS)
- Employee benefits : salaries, allowances, bonuses, cash gifts,
incentives, etc
- Registry: RAOD – PS
- LGU: PS should not be more than 55% of the revenue in the
previous year.

b. Maintenance and Other Operating Expenses (MOOE)

- Operating Expenses: Utilities, Supplies, Repairs, Travel, Fuel, etc
- Registry: RAOD – MOOE

c. Financial Expense (FE)

- Finance Cost: Interest Expenses, Bank Charges, losses on ForEx,
etc.
- Registry: RAOD – FE

d. Capital Outlays (CO)

- Capitalizable Expenditures: Infrastructures, Equipment, Buildings,
Land, etc.
- Registry: RAOD - CO

iv. Registries of Budget, Utilization and Disbursements (RBUD)

(Records the approved special budget and the corresponding utilizations
and disbursements charged to retained income.
Separate RBUDs are maintained for every object of expenditure: RBUD –
PS, RBUD – MOOE, RBUD – FE, RBUD – CO)

NOTE: The COA shall keep the general accounts of the Government
and preserve the vouchers and other supporting documents

2. GOVERNMENT ACCOUNTING CYCLE

Cycle Description Budgetary Document / Journal Entries
Related Financial
Report
1. Appropriation The agency Registry of None
 Page 4 of 10

receives its Appropriations and

appropriation Allotments (RAPAL)
based on GAA

(Budget Prep, Leg)

2. Allotment The agency Registry of None
receives its Appropriations and
allotment / Allotments (RAPAL)
Obligational
authority from the Appropriate Registries
DBM through: of Allotments,
GAARD, GARO or Obligations, and
SARO Disbursements (RAOD)
3. Incurrence of The obligation is Obligation Request and None
Obligation incurred by the Status (ORS / OBR)
entity by entering
into contracts. Appropriate Registries
of Allotments,
Obligations, and
Disbursements (RAOD)
4. Disbursement The agency Registry of Allotments Cash – MDS, Regular xx
Authority receives its and Notice of Cash Subsidy from NG xx
authority to Allocation (RANCA)
disburse through: National Government
NCA, NCAA, NTA, or Or Registry of
CDC Allotments and Notice
of Transfer of
Sometimes, the Allocation (RANTA) For TRA:
agency receives NCA
Cash – TRA xx
through Tax
Subsidy from NG xx
Remittance Advice
(TRA)* Due to BIR xx
Government Cash – TRA xx
agencies / entities
– withholding
agent
5. Disbursements The agency Updating of Obligation Upon delivery of goods or
receives the service Request and Status service:
or goods and then (ORS)
actually pays the Expense / Asset xx
Payable xx
obligation Updating of
appropriate Registries Actual payment:
of Allotments, Payable xx
Obligations, and Cash – MDS, Regular xx
Disbursements (RAOD)
6. Billings, The agency bills, Registries of Revenue Billing:
Collections and collects payment and Other Receipts Accounts Receivable xx
Appropriate Revenue Acct.
Remittances through the (RROR) xx
*bill is issued collecting office
* Collection (CO) and the Reports on Cash
(Collecting officer) eventual Disbursements (RCD) Collection:
*Remittance remittance of the Cash – CO xx
(deposit of money collecting officer Cash Receipts Register Accounts Receivable xx
 Page 5 of 10

to the AGDB or through depositing (CRReg)

AAB) the collections in Remittance:
the depository bank Cash – Treasury / Agency
of the agency. Deposit, Regular xx
Cash – CO xx
7. Unadjusted Trial Unadjusted trial Unadjusted Trial Balance None
Balance balance is a list of
accounts in the
General Ledger
together with the
balances. Its purpose
is to test the quality
of total debits and
total credits in the
accounts.
8. Adjusting Preparation of entries General Journal Reversal of NCA:
Entries to adjust accounts in Subsidy from NG xx
order to reflect Cash – MDS, Regular xx
accurate figures in
(Usual ADJE for
the financial
Commercial Accounting
statements. such as depreciation and
impairment losses are
Usual Adjustment: recorded in the same way
Reversal of unused under government
NCA accounting)
9. Closing Entries The following are the General Journal Closing Entry #1
necessary closing Accumulated Surplus/
entries under (Deficit) xx
government Cash – Treasury
Deposit, Regular
accounting:
xx
1. Closing of Cash
– Treasury /
Agency Deposit,
Regular to Closing Entry # 2
Accumulated Subsidy from NG xx
Surplus / Revenue and Expense
(Deficit) Summary xx
2. Closing of the
“Subsidy from Closing Entries # 3
Appropriate Rev Accts xx
National
Appropriate Exp Accts
Government” xx
account to the Revenue and Exp
“Revenue and Summary*
Expense xx
Summary”
account *Revenue and Expense
3. Closing of Summary – balancing
income and figure
expense Revenue and Expense Summary xx
accounts to the Accumulated Surplus/ (Deficit) xx
“Revenue and
Instead of income summary –
Expense Revenue and Expense Summary
Summary” and
 Page 6 of 10

closing the Instead of Capital or Retained

earnings – Accumulated Surplus
4. balance of the (Deficit)
said account to
Govt – no usage of term Profit or
the Loss, instead we use surplus or
“Accumulated deficit
Surplus / u
(Deficit)”
account.
5. Preparation of The agency prepares Statement of Financial None
Financial it financial Position
Statements statements, the end (prepared per fund)
output of accounting.
Statement of Financial
Performance
(prepared per fund)

Notes to Financial
Statements

* TRA – is used to recognize:

1. The constructive remittance of taxes withheld to the BIR or BOC and
constructive receipt of NCA for those taxes/custom duties – in the books of
the government agency withholding the tax
2. Recognize constructive receipt of revenue and customs – in the books of BIR
and BOC
3. Recognize constructive receipts of the taxes and customs duties remitted –
in the Books of Bureau of Treasuries

Application

Comprehensive Sample Problem:

The trial balance of entity A (a government entity) at the beginning of the period is
shown below:
Accounts Debit Credit
Cash – Collecting Officers 5, 000
Accounts Receivable 45, 000
Buildings 500, 000
Accumulated Depreciation – Buildings 150, 000
Office Equipment 150, 000
Accumulated Depreciation - Equipment 60, 000
Accounts Payable 20, 000
Accumulated Surplus (Deficit) - 470, 000
Total 700, 000 700, 000

Notes:
- The P20, 000 Accounts Payable pertains to office supplies purchased in the prior
year that were already delivered but not yet paid.
- An additional purchase of office supplies worth P5, 000 is not yet recorded in the
accounting books because there are not yet delivered. This prior year obligation: is
described in the registries as “Not yet due and demandable obligation”
 Page 7 of 10

Transactions
1. January 1
Entity A receives its GAA amounting to P1, 000, 000. (PS – 400, 000; MOOE -
100, 000; FE – 100, 000; CO – 400, 000)
Appropriations – P1, 000, 000
No Journal Entry
Entry: Registry
2. January 3
Entity A receives the allotment (SARO) amounting to P820,000 from the DBM.
No Journal Entry
Entry: Registry
RAPAL
RAOD – PS/MOOE/FE/CO
PS – 350, 000
MOOE – 100, 000
FE – 50, 000
CO – 320, 000
3. Entity A incurs the obligation amounting to P700, 000 allocated as
follows:
PS – 300, 000 (ORS)
Job Order – 300, 000
RAOD
MOOE – 100, 000 (ORS)
Payment of Maintenance Expenses – 40, 000
Payee: Cairo Ramos
Office: General Services Office

Purchase of Supplies - 55,000

Payee: Ciara Saplagio
Office: Accounting Office

Travel Expenses – 5, 000

Payee: Darryl Nebria
Office: Administration Office

Capital Outlays – 300, 000 (ORS)

Purchase of Equipment – 300, 000
Payee: Gina Perez
Office: Customer Service Department
Requirement:
1. Accomplish ORS
2. Update respective RAODs

4. On January 8, 2020
The entity receives the following Notice of Cash Allocations (NCA), net of
tax:
a. For the current year’s appropriation 600, 000
b. For the prior year’s accounts payable and not yet due and demandable
obligations 25, 000
Journal Entries (General Journal)
a. Cash – Modified Disbursement System(MDS), Regular 600, 000
 Page 8 of 10

Subsidy from National Government 600, 000

b. Cash – Modified Disbursement System (MDS), Regular 25, 000

Subsidy from National Government 25, 000

Update RANCA
5. On January 15, 2020
The employees already delivered service for the month, the
corresponding payroll is prepared as follows:
Gross Salaries and Wages 200, 000
Personal Economic Relief Allowance (PERA) 50, 000
Withholding Taxes (Due to BIR) 20, 000
GSIS (Due to GSIS) 9, 000
Pag-IBIG (Due toPag-IBIG) 2, 000
PhilHealth (Due to PhilHalth) 1, 000

Service has been delivered – the government already has obligation

(liability)
Journal Entry:

Salaries and Wages (@ gross) 200, 000

Personal Economic Relief Allowance 50, 000
Due to BIR 20, 000
Due to GSIS 9, 000
Due to Pag-IBIG 2, 000
Due to PhilHealth 1, 000
Due to Officers and Employees 218, 000
Update ORS

6. Cash advance (for liquidation) for payroll fund have been established.
Journal Entry:
Advances for Payroll 218, 000
Cash – MDS, Regular 218, 000
To record the grant of cash advance for payroll

- Update ORS and RAOD

7. Salaries were paid, Payroll fund has been liquidated.

Journal Entry:
Due to Officers and Employees 218, 000
Advances to Payroll 218, 000

8. The entity received the office supplies from the prior year’s obligations
Journal Entry:
Office Supplies 5, 000
Accounts Payable 5, 000
Update ORS (Ciara) – Payable Section

9. The entity received the delivery of office supplies purchased in the current year’s
obligation worth P30, 000
Journal Entry:
Office Supplies 30, 000
Accounts Payable 30, 000
 Page 9 of 10

Update ORS (Ciara) – Payable Section

10.The accounts payable in relation to numbers 8 and 9 transactions were paid,

subjected to 10% withholding tax.
Journal Entry:
Accounts Payable 35, 000
Due to BIR 3, 500
Cash – MDS, Regular 31, 500

Update ORS (Ciara) – Payment Section

Update RAOD – MOOE – Disbursement Section

11. The entity pays for the following expenses:

Water 1, 000
Electricity 5, 000
Telephone 2, 000
Janitorial 10, 000
Security 12, 000
Withholding taxes 2, 000

Journal Entry:
Water Expenses 1, 000
Electricity Expenses 5, 000
Telephone Expenses 2, 000
Janitorial Expenses 10, 000
Security Expenses 12, 000
Due to BIR 2, 000
Cash – MDS, Regular 28, 000

Update ORS (Cairo) – Payment Section

Update RAOD – MOOE - Disbursement Section

12.The entity grants cash advance of P2, 000 for the travelling expenses of an
officer.

Journal Entry:
Advances to Officers and Employees 2, 000
Cash – MDS, Regular 2, 000

Update ORS (Darryl) – Payment section

RAOD – MOOE - Disbursement Section

13.The cash advance has been liquidated, excess funds have been redeposited
Journal Entry:
Travelling Expenses 2, 000
Advances to Officers and Employees 2, 000

14.The entity received the delivery of purchased office equipment worth P300, 000
from current year’s operations
Journal Entry
Office Equipment 300, 000
Accounts Payable 300, 000
 Page 10 of 10

Update ORS (Gina) – payable section

15.The transaction no. 14 has been paid subject to tax of 20, 000.
Journal Entry
Accounts Payable 300 000
Due to BIR 20, 000
Cash – MDS, Regular 280, 000

Update ORS (Gina) – payment section

RAOD – CO – Disbursement Section

16.Entity A remits taxes withheld through TRA

17.The entity billed the following revenue / income:
Power supply system fees 100, 000
Landing and parking fees 80 , 000
Total 180, 000
18.Entity A collects P100, 000 accounts receivable from the billing above and remits
P90, 000 of the collection
19.Entity A collects P45, 000 accounts receivable from prior year’s billings and
remits total collection
20.Entity A collects unbilled service income of P370, 000 and remits P340, 000 of
the total collection
a. Permit fees 200, 000
b. Registration Fees 160, 000
c. Other Service Income 10, 000

21.Entity A collect unbilled tax revenue through direct deposit in Authorized Agent
Banks

Closure
Congratulations for finishing your government accounting topics! May everything that you
have learned will help you become a good accountant in the future and a better Filipino
Citizen at present.