Preparation

Preparation
of
of
Trial Balance
Trial Balance
Under the
Under the
NGAS
NGAS
 Trial Balance

A Trial Balance is a list

showing the equality of debit
and credit balances of all
general ledger accounts as of
a given period.
 Purposes of the Trial Balance

 To prove the mathematical equality of

the debits and credits after posting;
 To uncover errors in journalizing and
posting; and
 To serve as basis for the preparation of
the financial statements.
 The Trial Balance Preparation
Under the NGAS

Procedures:
1. Complete the heading;
2. From the General Ledger, list the accounts with balances as
of the Trial Balance date (Unadjusted TB);
3. Show the total of the debit and credit columns;
4. Prepare the adjusting entries and post to the
appropriate column in the worksheet and the General
5. Ledger;
Compute for the adjusted balances of the accounts and
extend the same under the Pre-Closing TB column;
6. Prepare Closing Entries and post to the worksheet and the
General Ledger;
7. Prepare the Post-Closing Balances of the accounts; and
8. Sign the certification.
 Department ABC
Trial Balance (RA Books) (Unadjusted)
As of December 31, 2011
Account Title Code Debit Credit
Cash-Natl.Treasury, MDS 108 11,900
Advances to Officers and Employees 148 800
Other Receivables 149 1,000
Office Supplies Inventory 155 500
Construction Matrls. Invty. 168 300
Prepaid Rent 177 1,200
Prepaid Insurance 178 600
Prepaid Interest 179 2,400
Office Equipment 221 10,000
Accounts Payable 401 10,000
Due to GSIS 413 700
Government Equity 501 1,600
Subsidy Income from NG 651 40,000
Electricity 767 3,600
Salaries & Wages-Reg.Pay 701 20,000
Total 52,300 52,300
Certified Correct:
Chief Accountant
 Worksheet
The Work Sheet, has been defined as “a columnar sheet of paper
on which accountants have summarized information needed to
prepare the adjusting and closing entries and to prepare the
financial statements.” It is also a useful tool for the
auditor in his/her analysis and examination of the accounts. The
preparation of worksheet is optional with the following suggested
format:

Adjusted/
Statement Post-
Unadjusted Pre-
Adjustme Closing of Income Closing Balance
Accounts Trial Closing
nts Entries and Trial Sheet
Balance Trial
Expenses Balance
Balance

Title Code Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr.
 Adjusting
Journal Entries
Under the matching principle, adjustments should be made for
economic activities that have taken place but are not yet
recorded at the time when the financial statements are
prepared. There are of two main types: accrued items and
deferred items.

Adjustments for Accrued Items:

An accrued item is an adjusting entry for an economic activity
already undertaken but not yet recorded into an asset and
revenue accounts or a liability and expense.

Adjustments for Deferred Items:

A deferred item is an adjusting entry transferring data
previously recorded in an asset account to an expense account,
or data previously recorded in a liability account to a revenue
account.
 Adjusting Entries Dr. Cr.
1. Depreciation - Office Eqp't 921 900
Accum. Depn - Offce Eqp't 321 900
To take up depreciation for the period
2. Bad Debts Expense 901 100
Allow. for Doubtful Accounts 301 100
To provide allowance for Doubtful accounts

3. Rent Expenses 782 1200

Prepaid Rent 177 1200
To record the expired portion of prepaid rent

4. Insurance Expenses 893 150

Prepaid Insurance 178 150
To record expired portion of prepaid insurance
 Dr. Cr.
5. Interest Expenses 975 600
Prepaid Interest 179 600
To record expired portion of prepaid interest
6. Office Supplies Expenses 755 300
Office Supplies Invty. 155 300
To record issuance of office supplies per Report of Supplies
and Materials Issued.
7. Repairs & Maint. -Office Bldgs. 811 200
Construction Materials Invty. 168 200
To record issuance of construction materials.
8. Traveling Expenses-Local 751 300
Due from Officers & Empl. 123 300
To take up liquidation of travelling allowance

9. Prior Years' Adjustments 684 300

Due from Officers & Empl. 123 300
To take up liquidations of prior year's advance for TEV.
 Adjusting Journal Entries:
A. Reversion of unutilized NCA at the
end of the year (No check to issued, only JEV)
Subsidy Income from NG 651 xx
Cash- Nat’l. Treasury- MDS 108 xx
B. Restoration of cash pertaining to unreleased checks
at the end of the year (Prepare JEV on the last working
day of Dec.)
Cash - Nat’l. Treasury, MDS 108 xx
Cash in Bank, LCCA 111 xx
Accounts Payable 401 xx
Due to GSIS 413 xx
 Adjusting Entries cont..

Dr. Cr.
10. Cash - Natl. Treas, MDS 108 1,200
Accounts Payable or 401 1,200
Due to Officers and Employees
To restore the cash equivalent to the total amount
of unreleased checks as of Dec. 31, 2002.

11. Subsidy Income from NG 651 11,900

Cash - Natl. Treas., MDS 108 11,900
To take up reversion of unused NCA.
 Department of ABC
Trial Balance (RA Books)
As of December 31, 2006
Acct. Unadjusted TB Adjusting Entries
Account Title Code Debit Credit Debit Credit

Cash-NT, MDS 108 11,900 1,200 11,900

Advances toOfficers & Employees 148 800 600
Other Receivables 149 1,000
Office Supplies Inventory 155 500 300
Construction Materials Invty. 168 300 200
Prepaid Rent 177 1,200 1,200
Prepaid Insurance 178 600 150
Prepaid Interest 179 2,400 600
Office Equipment 221 10,000
Allowance for Doubtful Accounts 301 100
Accumulated Depr.-OE 321 900
Accounts Payable 401 10,000 1,200
Due to GSIS 413 700
Government Equity 501 1,600
Income and Expense Summary 512
Prior Years Adjustments 684 300
Retained Operating Surplus 513
Subsidy Income from NG 651 40,000 11,900
Salaries & W ages - Regular Pay 701 20,000
Travelling Expenses-Local 751 300
Electricity 767 3,600
Rent Expense 782 1,200
Insurance Expenses 893 150
Office Supplies Expenses 755 300
Repairs & Maint. -Office Bldgs. 811 200
Depreciation - Office Equipment 921 900
Bad Debts Expense 901 100
Interest Expenses 975 600
52,300 52,300 17,150 17,150
 Department of ABC
Trial Balance (RA Books)
As of December 31, 2006
Acct. Unadjusted TB Adjusting Entries Pre-Closing
Account Title Code Debit Credit Debit Credit Debit Credit

Cash-NT, MDS 108 11,900 1,200 11,900 1,200

Advances toOfficers & Employees 148 800 600 200
Other Receivables 149 1,000 1,000
Office Supplies Inventory 155 500 300 200
Construction Materials Invty. 168 300 200 100
Prepaid Rent 177 1,200 1,200 -
Prepaid Insurance 178 600 150 450
Prepaid Interest 179 2,400 600 1,800
Office Equipment 221 10,000 10,000
Allowance for Doubtful Accounts 301 100 100
Accumulated Depr.-OE 321 900 900
Accounts Payable 401 10,000 1,200 11,200
Due to GSIS 413 700 700
Government Equity 501 1,600 1,600
Income and Expense Summary 512
Prior Years Adjustments 684 300 300
Retained Operating Surplus 513
Subsidy Income from NG 651 40,000 11,900 28,100
Salaries & Wages - Regular Pay 701 20,000 20,000
Travelling Expenses-Local 751 300 300
Electricity 767 3,600 3,600
Rent Expense 782 1,200 1,200
Insurance Expenses 893 150 150
Office Supplies Expenses 755 300 300
Repairs & Maint. - Office Buildings 811 200 200
Depreciation - Office Equipment 921 900 900
Bad Debts Expense 901 100 100
Interest Expenses 975 600 600
52,300 52,300 17,150 17,150 42,600 42,600
 Closing Journal Entries

Closing journal entries are general journal entries which close

out the balances of all nominal and intermediate accounts at
the end of the accounting period.

Nominal accounts i.e. income and expenses shall be closed to

the Income and Expense Summary account and the balance
shall be closed to the Retained Operating Surplus at the end of
the accounting period.

The balance of the Retained Operating Surplus account shall

be closed to the Government Equity account at the close of the
accounting period.
 Under the NGAS, any unutilized NCA (Cash, National
Treasury-MDS / Subsidy Income from NG) shall be
adjusted prior to the closing of the accounts at year-end
because of the DBM policy that the NCA will only be valid
within the year of issue or as indicated on the NCA.

There is no need to issue an MDS check for remittance

to BTr.

Total NCA received P10,000

Adjusting Journal Entry:
Total MDS Checks issued 9,800 Subsidy Income from NG 651 200
Balance, December 31, 2004 P 200 Cash-Natl. Treas., MDS 108 200
1. Income and Expense Summary 512 27,350
Salaries & Wages-Regular Pay 701 20,000
Traveling Expenses-Local 751 300
Electricity 767 3,600
Rent Expenses 782 1,200
Insurance Expenses 893 150
Office Supplies Expenses 755 300
Repairs and Maint. - Office Bldg. 811 200
Depreciation - Office Equip. 921 900
Bad Debts Expense 901 100
Interest Expenses 975 600
To close the balance of expense accounts to Income and
Expense Summary

2. Subsidy Income from NG 651 28,100

Income and Expense Summary 512 28,100
To close the balance of Subsidy Income from NG
to Income and Expense Summary
3. Income and Expense Summary 512 750
Retained Operating Surplus 513 750
To close the balance of Income and Expense Summary
to Retained Operating Surplus.

4 Retained Operating Surplus 513 300

Prior Years' Adjustments 684 300
To close Prior Years Adjustment to Retained Operating Surplus

5. Retained Operating Surplus 513 450

Government Equity 501 450
To close the balance of Retained Operating Surplus to
Government Equity.
 Department ABC
Trial Balance (RA Books)
As of December 31, 2011
Acct. Unadjusted TB Adjusting Entries Pre-Closing Closing Entries
Account Title Code Debit Credit Debit Credit Debit Credit Debit Credit

Cash-NT, MDS 108 11,900 1,200 11,900 1,200

Advances to Officers & Employees 148 800 600 200
Other Receivables 149 1,000 1,000
Office Supplies Inventory 155 500 300 200
Construction Materials Invty. 168 300 200 100
Prepaid Rent 177 1,200 1,200 -
Prepaid Insurance 178 600 150 450
Prepaid Interest 179 2,400 600 1,800
Office Equipment 221 10,000 10,000
Allowance for Doubtful Accounts 301 100 100
Accumulated Depr.-OE 321 900 900
Accounts Payable 401 10,000 1,200 11,200
Due to GSIS 413 700 700
Government Equity 501 1,600 1,600 450
Income and Expense Summary 512 28,100 28,100
Prior Years Adjustments 684 300 300 300
Retained Operating Surplus 513 750 750
Subsidy Income from NG 651 40,000 11,900 28,100 28,100
Salaries & Wages - Regular Pay 701 20,000 20,000 20,000
Travelling Expenses-Local 751 300 300 300
Electricity 767 3,600 3,600 3,600
Rent Expense 782 1,200 1,200 1,200
Insurance Expenses 893 150 150 150
Office Supplies Expenses 755 300 300 300
Repairs and Maint. - Office Bldg. 811 200 200 200
Depreciation - Office Equipment 921 900 900 900
Bad Debts Expense 901 100 100 100
Interest Expenses 975 600 600 600
52,300 52,300 17,150 17,150 42,600 42,600 56,950 56,950
 Department ABC
Trial Balance (RA Books)
As of December 31, 2011
Acct. Unadjusted TB Adjusting Entries Pre-Closing Closing Entries
Account Title Code Debit Credit Debit Credit Debit Credit Debit Credit

Cash-NT, MDS 108 11,900 1,200 11,900 1,200

Advances to Officers & Employees 148 800 600 200
Other Receivables 149 1,000 1,000
Office Supplies Inventory 155 500 300 200
Construction Materials Invty. 168 300 200 100
Prepaid Rent 177 1,200 1,200 -
Prepaid Insurance 178 600 150 450
Prepaid Interest 179 2,400 600 1,800
Office Equipment 221 10,000 10,000
Allowance for Doubtful Accounts 301 100 100
Accumulated Depr.-OE 321 900 900
Accounts Payable 401 10,000 1,200 11,200
Due to GSIS 413 700 700
Government Equity 501 1,600 1,600 450
Income and Expense Summary 512 28,100 28,100
Prior Years Adjustments 684 300 300 300
Retained Operating Surplus 513 750 750
Subsidy Income from NG 651 40,000 11,900 28,100 28,100
Salaries & Wages - Regular Pay 701 20,000 20,000 20,000
Travelling Expenses-Local 751 300 300 300
Electricity 767 3,600 3,600 3,600
Rent Expense 782 1,200 1,200 1,200
Insurance Expenses 893 150 150 150
Office Supplies Expenses 755 300 300 300
Repairs and Maint. -Office Bldg. 811 200 200 200
Depreciation - Office Equipment 921 900 900 900
Bad Debts Expense 901 100 100 100
 The Trial Balance Preparation
Under the NGAS

Adjusted/
Unadjusted Adjusting
Pre-Closing
TB Entries TB

Closing Post Closing Generation of

Entries TB Financial Statements