Write your own summary or how you understand Chapter 5 (Disbursements).

Include in your
summary a contrast between disbursements of public funds and disbursements of private
funds (or the commercial businesses such as corporations owned by stockholders). Your
contrast may include among others the procedures and controls in disbursement. 

Disbursements constitute
all payments in cash, in
whatever manner (e.
through cash, check, or other
means). Disbursements shall
be supported by
Disbursement Vouchers
(including Petty Cash,
Vouchers) or Payroll.
Disbursements constitute all payments in cash, in whatever manner (e.g., through cash,
checks, or other means). It shall be supported by Disbursement Vouchers (DV) (including
Petty Cash, Vouchers) or Payroll which are approved by the Head of Agency. A disbursement
voucher is a form that is submitted to have a check prepared for payment. This money is then
used to pay an organization or individual for goods or services rendered. A DV can have
multiple payees depending on what debt is being settled. These payments are generally made
through clearing/deposit bank accounts. The voucher then gets filed with financial
statements. All disbursements are recorded to show how an entity spends money over time.
An entity can make disbursements only after it has received a disbursement authority, based
on Notice of Cash Allocation (NCA); Notice of Transfer of Allocation (NTA); Tax Remittance
Advice (TRA); Non-Cash Availment Authority (NCAA); and, Cash Disbursement Ceiling (CDC)

In order to disburse funds, an entity/agency must have certification or the requirements for
disbursement, namely: the availability of allotment that shall be certify by Budget Officer,
availability of funds and completeness of supporting documents certify by Chief Accountant,
and the necessity and legality of disbursements that shall be certify by Head of the
Requesting Unit

Disbursements can be made through Check; Cash; and, Cash payments such as, Advice to
Debit Account (ADA) an accountable form used as an authorization issued by a government
agency; Electronic Modified Disbursement System (eMDS) – the disbursement are made
directly from the accounts of BTr that maintained with the LBP; Cashless Purchase Card
System (CPC) –through the use of an electronic card such as credit card; Non-Cash Availment
Authority (NCAA) – through the Journal Entry Voucher (JEV) to record payment of goods and
services made directly by lending institution to the supplier or contractor; and, Tax Remittance
Advice (TRA) – used for constructive remittance of taxes or customs duties withheld to BIR or
BOC.

In a business sense, the term “disbursement” refers to a method of payment for many types of
transactions. It does not have to be a specific payable. When writing a check from a business
account, referring to the payment as a disbursement check is usually appropriate. This term is
never used for personal finance. A company can create disbursement checks for a multitude
of payment types such as employee salaries, payroll expenses, payments to suppliers,
contractors, and vendors, reimbursements to workers for out-of-pocket expenses, dividend
payments to shareholders, and profit distributions to other business owners

A disbursement is the actual delivery of funds from one party's bank account to another. In
business accounting, a disbursement is a payment in cash during a specific time period and is
recorded in the general ledger of the business. The record of disbursements shows how the
business is spending cash over time. If cash flow is negative, meaning that disbursements are
higher than revenues, it can be an early warning of insolvency.

Write your own summary or how you understand Chapter 6 (Financial Assets). Include in
your summary a contrast between financial assets in government accounting and those in
private entities (or the commercial businesses such as corporations owned by
stockholders).

Financial asset is any asset that is: cash; an equity instrument of another entity; a contractual
right to receive cash or another financial asset from another entity; a contractual right to
exchange financial instruments with another entity under conditions that are potentially
favorable; or, a contract that will or may be settled in the entity’s own equity instruments.
Examples of these are cash and cash equivalents, receivables, investments in debt and equity
securities, and derivative assets. A financial asset is recognized when an entity becomes a party
to the contractual provision of instrument. It is initially measured at fair value plus transaction
costs, except for financial assets at fair value through surplus or deficit whose transaction costs
are expensed.

Cash comprises cash on hand, cash in bank and cash treasury accounts. Unleased checks and
canceled checks (e.g., stale, voided or spoiled) are reverted back to cash. The Petty Cash Fund
is the amount granted to duly designated PCF Custodian for payment of authorized petty or
miscellaneous expenses which cannot be conveniently paid through check or ADA. PCF of a
government entity is maintained using the imprest system. It is sufficient to defray recurring
petty expenses for 1 month. Used for disbursements not exceeding P15,000 per transaction.
Replenish as soon as disbursements reach at least 75% or as needed.

The disbursing officer is liable for any cash shortage while any cash overage that he cannot
satisfactorily explain to the auditor is forfeited in favor of the government. While, a check that is
not accepted when presented for payment, e.g., a check returned by the bank because of lack of
sufficient funds- ‘bounced’ check. Dishonored checks are recorded in the “Other Receivables”
account. Government and private entities prepare monthly bank reconciliations for each of the
bank accounts it maintains, using the adjusted balance method. Additionally, only debt
instruments acquired within 3 months before their scheduled maturity date can qualify as cash
equivalents. And receivables are initially measured at fair value plus transaction cost and
subsequently measured at amortized cost.

For subsequent measurement purposes, a government entity classifies its financial assets into
the following categories: Financial asset at fair value through surplus or deficit; Held-to-maturity
investment; Loans and receivables; and Available-for-sale financial assets.

Derivatives is a financial instrument or other contract that derives its value from the charges in
value of some other underlying asset or instrument. Its very purpose is to identify the actual
level of risk and altering the latter to equal the former (risk management).

Compared to the accounting for private entities, government accounting places greater emphasis on the
sources and utilization of government funds and the management's stewardship over government
resources. Governments use accrual-basis accounting statements which measure the
government’s ability to cover the cost of paying for services in the long term, using the
economic resource flows measurement focus. This differs from a business income statement
which focuses on an entity’s ability to cover the cost of operations in a single period. The
government’s Statement of Activities is the basis of initial assessment of management’s
performance. Budgetary comparison schedules assist in making a government accountable to
its citizens for allocation and use of items such as property taxes. While a business uses a
budget as a management resource, a government uses it to demonstrate accountability to the
public.