Ay en Research

8/9/2019 Ay en Research

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Thomas K Eden,32 S Riverview,

Ogden, Iowa 50113,(515) 555-7998.

Date:26th June, 2007.

Jack Richardson,Director of Finance,323 South Avon Drive,Milton, NY 10945,(914) 555-2909.

Dear Mr. Richardson,

I am writing this letter to apply for Financial Analyst position. I have read about yourcompany and its growth graph of ten years. I am very impressed by this. I have five yearsexperience in financial analyst's team. I was chief analyst for last two years.

Since I am shifted in city due to some problem, I am searching new job.

Please consider my application for this position. I look forward to meeting with you todiscuss my experience and qualification. Please contact me at above telephone number oron my e-mail id [email protected]. On your convenient schedule I will reach at youroffice.

Thank you for reading my cover letter and resume.

Sincerely,

Thomas K Eden.

Enclosure Resume


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CHAPTER 3. ACCOUNTING SYSTEM

A. GENERAL ACCOUNTING PLAN

Sec. 05. General Accounting Plan. The General Accounting Plan shows the overallaccounting cycle in the Local Government Unit. Transactions shall emanate from the differentoffices/departments of the local government units (LGUs). These offices/departments willprovide/produce the source documents and other accounting forms leading to the perfection ofthe transaction, whether it be budgetary, collections or disbursements. The source documentsand accounting forms shall be the basis for the preparation of reports by the Office of theTreasurer. The Office of the Accountant shall record the transactions to the registries or to thecorresponding books of original entry. Posting to the books of final entry and preparation of thefinancial reports shall also be undertaken by the Office of the Accountant.

The General Accounting Plan (Table 1) is presented as to the following type of

transactions:

a. Appropriations, Allotments and Obligationsb. Collections and Depositsc. Disbursements

y By cash

y By checkd. Miscellaneous and Other transactions

B. BUDGETARY ACCOUNTS

Sec. 06. Budgetary Accounts. Budgetary accounts are composed of appropriations,

allotments and obligations.

Sec. 07. Accounting for Appropriations. Appropriation refers to an authorizationmade by ordinance, directing the payment of goods and services from local government fundsunder specified conditions or for specific purposes.

The local sanggunian approves the annual budget thru the issuance of appropriationordinance. On the first business day of the fiscal year, the entire annual budget of the localgovernment unit shall be recorded in the Registry of Appropriations, Allotments andObligations (RAAO). The appropriations, in the amounts approved by the legislative body andconfirmed by the reviewing authorities, are recorded in the registries maintained by the

accountant where they may be compared with the actual developments of the period.

Budgetary reserves which are stand by appropriations ready for release in case ofcalamities, as well as supplemental budget are similarly recorded in the RAAO. In case theLGU is operating on a re-enacted budget, said re-enacted budget shall likewise be recorded inthe registry. Once current budget is approved, the necessary adjustments shall be made in theregistry.

Separate registries shall be maintained for the four classes of expenditures per


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responsibility center, to wit:

1. Registry of Appropriations, Allotments and Obligations - Capital Outlays (RAAOCO)2. Registry of Appropriations, Allotments and Obligations - Maintenance and Other

Operating Expenses (RAAOMO)3. Registry of Appropriations, Allotments and Obligations - Personal Services (RAAOPS)

4. Registry of Appropriations, Allotments and Obligations - Financial Expenses(RAAOFE)

Sec. 08. Accounting for Allotments. Allotment is the authorization issued by the LocalChief Executive (LCE) to a department/office of the LGU, which allows it to incur obligations,for specified amounts, within the appropriation ordinance. Allotments are released quarterlybased on the Work and Financial Plan and Request for Release of Allotment. The Accountant,upon receipt of the Advice of Allotment, shall enter the allotment in the RAAOs.

Sec. 09. Accounting for Obligations. Obligations refer to the amounts committed tobe paid by the LGU for any lawful act made by an accountable officer for and in behalf of thelocal government unit concerned.

Obligations shall be taken up in the registries as they are incurred. For each obligation,the requesting department/office shall prepare the Allotment and Obligation Slip (ALOBS)signed by the department or office head as requesting official and forward this, together withthe supporting documents, to the Budget Officer.

The Budget Officer shall certify to the existence of appropriation that has been legallymade for the purpose by signing the appropriate box in the ALOBS and assign the ALOBSnumber thereto. The Accountant shall review the ALOBS and certify as to obligation of theallotment by signing the appropriate box in the ALOBS. He shall also fill up the Status ofObligation. The Accountant shall record the amount of obligation in the RAAOs.

Sec. 10. Adjustment of Obligations. The Chief Accountant shall record paiddisbursement vouchers in the Status of Obligation portion (Payments) of the ALOBS. Anybalance appearing in the ALOBS after full payment of obligations shall form part of unobligatedallotment. The Chief Accountant shall adjust accordingly the amount of recorded obligations inthe RAAO using the same ALOBS number as reference. At the end of each month, the Chief

Accountant and the Budget Officer shall reconcile their records on allotments available forobligation.

Sec. 11. Accounting Procedures forBudgetary Accounts. Summarized hereunder

is the process in accounting for budgetary accounts:

PR O C E S SPERSON / UNITRESPONSIBLE


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a. Records in the appropriate RAAOs theapproved appropriation per AppropriationOrdinance.

Office of theAccountant

b. Forwards the advice of allotments to theOffice of the Accountant and returns the

work plan to the concerned departments/offices.

Office of the BudgetOfficer

c. Enters the allotments in the RAAOs. Office of theAccountant

d. Prepares ALOBS based on disbursementvouchers/purchase requests and/orsupporting documents. Signs theappropriate box for requesting office.Forwards the same to the Office of theBudget Officer.

Heads ofdepartments/offices

e. Certifies the ALOBS as to the existence

of appropriations based on theappropriation ordinance. Assigns ALOBSnumber and forwards the same to theOffice of the Accountant.

Budget Officer

f. Certifies the ALOBS as to the obligationsof allotments. Records the obligation inthe appropriate column of the RAAOs andin the Status of Obligation portion(Obligation) of the ALOBS.

Chief Accountant

g. Records paid disbursement vouchers inthe Status of Obligation portion

(Payments) of the ALOBS. Any balanceappearing in the ALOBS after fullpayment of obligations shall form part ofunobligated allotment. Adjust accordinglythe amount of recorded obligations in theRAAOs.

Office of theAccountant

h. At the end of each month, reconcilerecords on allotments available forobligation.

Budget Officer andChief Accountant

Sec. 12. Terminology and Classification. A common terminology and classificationshall be used consistently throughout the budget, the accounts and the f inancial reports.

For this purpose, the following specific expenditures shall be recorded in the appropriateRAAOs:

a. RAAOCO

y Investments outlay (e.g. stocks, bonds)

y Land, Land Improvements and Leasehold Improvements outlay


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d. RAAOFE

y Bank Charges

y Interest Expenses

y Commitment Charges

y Other Financial Charges (e.g. underwriting fees, guarantee fees)

y Loan Amortization

C. INCOME/COLLECTIONS AND DEPOSITS

Sec. 13. Separation ofBooks and Depository Accounts. Local accountants andtreasurers shall maintain separate books and depository accounts, respectively, for each fundin their custody or administration.

Sec. 14. Depository Accounts. Local treasurer shall maintain depository accounts in

the name of their respective local government units with banks, preferably government-owned,located in or nearest to their respective areas of jurisdiction. Earnings of its depositoryaccounts shall accrue exclusively thereto.

Sec. 15. Remittance of Government Monies to the Local Treasury. Officers of thelocal government authorized to receive and collect monies arising from taxes, revenue, orreceipts of any kind shall remit the full amount received and collected to the treasury of suchlocal government unit which shall be credited to the particular account or accounts to which themonies in question properly belong.

Sec. 16. Sources of Income of LGUs. The main sources of income of LGUs are asfollows:

a. Tax revenues, fees and chargesb. Share from Internal Revenue Collectionsc. Share from National Wealth

The sources of income are further classified into general income accounts and specificincome accounts.

Sec. 17. General Income Accounts. The following shall comprise the General IncomeAccounts applicable to LGUs:

a. Subsidy from Other LGUsb. Subsidy from Other Fundsc. Subsidy from Special Accountsd. Sales Revenuee. Dividend Income


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f. Interest Incomeg. Gain on Sale of Securitiesh. Gain on Sale of Assetsi. Sale of Confiscated Goods and Properties

j. Foreign Exchange (FOREX) Gainsk. Miscellaneous Operating and Service Incomel. Fines and Penalties Government Services and Business Operationsm. Income from Grants and Donations

Sec. 18. Specific Income Accounts. The following major classification comprise thespecific income accounts for LGUs:

1. Property Taxes2. Taxes on Goods and Services3. Other Taxes4. Other Specific Income

Sec. 19. Methods of Accounting for Income. The following accounting methods shallbe adopted in recording income:

a. Accrual Method Accrual method of accounting shall be used to record Sharefrom Internal Revenue Collections in the books of accounts. Upon receipt ofthe Notice of Funding Check Issued from Department of Budget andManagement (DBM), Share from Internal Revenue Collections shall be takenup as Due from NGAs and credited to Share from Internal RevenueCollections. However, Cash in Bank shall be debited upon receipt of BankCredit Advice as to receipt of the Share from Internal Revenue Collectionsregardless of whether or not the Notice of Funding Check Issued has been

received from DBM.b. ModifiedAccrual Modified accrual method of accounting shall be used for

real property taxes. At the beginning of the year, Real Property TaxReceivable and Special Education Tax Receivable shall be established. Thisis in view of the need to record in the books not mere income estimates fromreal property taxes but actual receivables from said taxes. However, to avoidappropriating uncollected revenues which might result to huge cash overdraft,the same shall be credited to Deferred Real Property Taxes Income/DeferredSpecial Education Tax Income. Real Property Tax Income/Special EducationTax Income shall be recognized upon receipt of collection.

c. Cash Basis Cash basis of accounting shall be used for all other taxes, fees,

charges and other revenues.

Sec. 20. Basis of Recording Real Property Tax/Special Education Tax. RealProperty Tax Receivables/Special Education Tax Receivables shall be established at thebeginning of the year based on Real Property Tax Account Register/Taxpayers index card. Atthe beginning of the year, the Treasurer shall furnish the Chief Accountant of a duly certifiedlist showing the name of taxpayers and the amount due and collectible for the year. Based onthe list, the Chief Accountant shall draw a Journal Entry Voucher (JEV) to record the debit toReal Property Tax Receivable/Special Education Tax Receivable and crediting to Deferred


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Real Property Tax Income/Deferred Special Education Tax Income.

Upon collection of Real Property Taxes from taxpayers, the account Deferred RealProperty Tax Income/Deferred Special Education Tax Income shall be debited while the RealProperty Tax Income due to the municipality is recognized/credited. The share of the Provinceand Barangay shall also be credited to Due to LGUs.

Every end of the week, thereafter the Municipal Accountant shall furnish the ProvincialAccountant with a summary of the JEVs showing the breakdown of the amounts Due to LGUs.The summary, which shall be supported with copies of the JEVs, shall be the basis of theProvincial Accountant to draw the JEV taking up the RPT Income. The account Due from LGUshall be debited and Real Property Tax Income credited.

At the end of the month, the Municipal Accountant shall likewise prepare the Abstract ofReal Property Tax to facilitate the distribution of real property tax collection. A copy of theabstract shall be furnished the Provincial Accountant, for purposes of reconciliation with theweekly summary of JEVs.

Sec. 21. Delinquencies for Real Property Tax/Special Education Tax Prior to CY2002. Payment of delinquencies for real property taxes/special education taxes prior to CY2002 shall be recognized as a direct credit to Real Property Tax Income/Special Education TaxIncome account.

Sec. 22. Discount on Real Property Tax/Special Education Tax. Discounts foradvance and prompt payment of Real Property Tax and the additional one percent (1%) taxaccruing to the Special Education Fun shall be recognized in the year the taxes are due. Saiddiscounts shall be apportioned to the concerned LGUs in accordance with the sharingprescribed for real property tax and additional one percent (1%) tax under the LocalGovernment Code.

Sec. 23. Fines and Penalties. Fines and Penalties, either from tax revenue or other

specific income, shall be recognized as income of the year i t was collected.

Fines and Penalties arising from real property taxes shall be distributed to concernedLGUs in accordance with the sharing prescribed under the Local Government Code for RealProperty Tax and the additional one percent (1%) tax for the Special Education Fund.

Sec. 24. Other Receipts. Other receipts of the local government units shall becomprised of, but not limited to, the following:

a. Borrowingsb. Sale of Property, Plant and Equipmentc. Refund of Cash Advancesd. Receipt of Performance/Bidders Bonds


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Sec. 25. Borrowings. Borrowings are proceeds of repayable obligations, generally withinterest from the bank, national agency, another local government unit, and private sector. Allborrowings incurred shall be recorded direct to the appropriate liability accounts. Upon receiptof the advice from the bank or lending agency informing the release of the proceeds, the

Accountant shall draw a Journal of Entry Voucher taking up the transaction.

Sec. 26. Sale of Property, Plant and Equipment. Sale of property, plant andequipment refers to the proceeds from the sale of land, buildings, equipment, furniture andother similar property which are recorded in the books as Property, Plant and Equipment. Theappropriate Property, Plant and Equipment account shall be credited upon transfer ofownership.

Sec. 27. Refund of Cash Advances. Cash advances for official travel shall be taken

up as a receivable from the concerned official or employee. Refunds made shall be credited tothe receivable account previously set up. Cash advances for salaries and wages shall berecorded as debits to the account Cash Disbursing Officer. Any refund made shall becredited to this account.

Sec. 28. Receipt of Performance Bonds. Performance bond posted by contractor orsupplier to guaranty full and faithful performance of the their work may be in the form of cash,certified check or surety. Performance bond in cash or certified check shall be acknowledgedby the issuance of official receipt and recorded in the books by the Accountant drawing a JEVfor the purpose. In case of surety bond, an acknowledgment receipt shall be issued by theauthorized official.

Sec. 29. Reporting for Collections and Deposits. Collectors/tellers shall issue areceipt to acknowledge collections made. The receipt maybe in the form of pre-numberedOfficial Receipts, or cash tickets and the like. At the close of each business day, thesecollectors/tellers shall accomplish the Report of Collections and Deposits (RCD) in four copies.The original and two copies, together with the duplicates of the official receipts issued, shall besubmitted to the treasurer/cashier to whom the cash collected shall be turned over. The fourthcopy of the RCD shall be retained by the collector/teller concerned. Barangay Treasurersdeputized to collect taxes imposed by provinces, cities and municipalities shall follow the sameprocedures in turning over their collections to the treasurer/cashier concerned.

In the case of collectors assigned to the field, where travel time from their places ofassignment to the Treasurers Office is more than one day, turnover of collections shall bemade at least once a week or as soon as the collections reach P5,000.00.

Sec. 30. Verification of Collections and Accountable Forms. The Treasurer/Cashiershall verify the Report of Collections and Deposits; check the statement of accountable forms


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as to initial balances on hand, receipts, issues and the ending balances on hand; make aphysical count of the accountable forms remaining in the custody of the collector/teller andcheck the same against the new balances on hand column. He shall indicate his verification byaffixing his signature at the back of the triplicate copy of the last official receipt issued. He shallcount the money turned over to him and sign the certification and receipt portion of all copiesof RCD.

Sec. 31. Designation of Liquidating Officers. The Treasurer may designateliquidating officers from among the collectors/tellers whenever necessary.

a. Collectors/tellers shall turn over their collections to their designated liquidatingofficer. The RCD shall however be prepared in five copies, four copies to besubmitted to the liquidating officer, the fifth copy to be retained by thecollector/teller.

b. The liquidating officer shall perform the procedures for the receipt andverification of collections turned over to him. He shall also accomplish theRCD in four copies to summarize the collections turned over to him by the

collectors/tellers as well as his own collections.c. The liquidating officer shall turn over intact the cash collections to the

Treasurer/Cashier together with the originals and two copies of the RCDs ofcollectors/tellers and the duplicates of the official receipts issued. TheTreasurer/Cashier shall acknowledge receipt of the cash and allaccompanying documents by signing all copies of the RCD of liquidatingofficer on the certification and receipt portion of the form. The fourth copy ofthe RCD of the l iquidating officer and RCDs of collectors/tellers shall beretained by the liquidating officer.

Sec. 32. Deposit of Collections. The Treasurer/Cashier shall deposit intact all his

collections as well as all collections turned over to him by the collectors/tellers with theauthorized depository bank daily or not later than the next banking day. He shall record alldeposits made in the cashbook and prepare the RCD.

The barangay treasurer shall deposit all collections intact with the city/municipal treasurer,or in a depository bank account maintained in the name of the barangay, within five (5) daysfrom receipt thereof.

Sec. 33. Deposit of Field Collections. Collections by field collectors shall be remittedto the Cashier or designated liquidating officer of the field office of the LGU. When traveldistance of the field office to the local treasury may expose government funds to the risk ofloss while in transit, the Cashier or designated liquidating officer, upon authorization by theTreasurer, may deposit the collections in the authorized depository bank near the field office ofthe LGU. The procedures in reporting collections and deposits prescribed in this Chapter shallbe observed.

Sec. 34. Accounting for Collections and Deposits. The Accountant shall determinethe account classification of the collections covered by the RCD and the supporting papers


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submitted by the Treasurer/Cashier and shall accomplish the Journal Entry Voucher. Theaccountant shall also maintain the Abstract of Real Property Tax Collections to facilitate thedistribution and remittance of the shares of the different government units concerned in thereal property tax collections.

Sec. 35. Receipts and Collection Process. The following is a summary of the receiptand collection process in the LGU:


a. Receive payment from taxpayers/creditors and issue Official Receipt (OR).Prepare Report of Collections andDeposits. Remit to the Liquidating Officer(if one is designated) or Treasurer.

Collector/Teller

b. Check remittances and verifiesaccountable forms of collectors/tellers.Consolidates collections and remits to theTreasurer/Cashier. Prepares RCD.

Liquidating Officer

c. Receive remitted collections, consolidatesthe same and prepares RCD. Records inthe Cashbook Cash in Treasury.

Treasurer

d. Deposit collections in the appropriatebank account per authorized depositorybank. Records deposit in the Cashbook

Cash in Bank.

Treasurer

e. Forward RCD to Accounting Unit withcopies of ORs and validated deposit slips.

Treasurer

f. Prepare Journal of Entry Voucher andrecord in the Cash Receipt Journal.

Accountant

Sec. 36. Proforma Accounting Entries. The following are pro-forma accounting

entries for income, collection and deposit:

Particulars Account TitleAcct.Code Debit Credit

I N C O M E

1. Real Property Tax Basic

A. Books of the Municipality


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a. Setting-up of RPTReceivable

Real Property TaxReceivable

124 1,000

RPT = P1,000 Deferred Real

RPT Sharing:Municipal - 40%Province - 35%Barangay - 25%

Property Tax Income 448 1,000

b. Receipt of Payment Cash in Treasury 101 100


124 100

c. Distribution of Collection Deferred Real PropertyTax Income

448 100

RPT Sharing:Municipal - 40%Province - 35%

Barangay - 25%

Real Property TaxDue to LGUs

711431

4060

d. Deposit of Collections Cash in Bank LCCA 110 100

Cash in Treasury 101 100

e. Remittance of Share Due to LGUs 431 35(Province) Cash in Bank LCCA 110 35

f. Remittance of Share(Barangay)

Due to LGUsCash in Bank LCCA

431110

2525

B. Books of the Province

a. Upon receipt of theSummary of the JEV

from the MunicipalAccountant

Due from LGUsReal Property Tax

131711

3535

b. Upon receipt of share Cash in Bank LCCADue from LGUs

110131

3535

2. Operating and Service Income

a. Receipt of Income Cash in Treasury

Receipts from MarketsGarbage Fees

101

783772

100

9010

b. Deposit of Collections Cash in Bank LCCACash in Treasury

110101

100100

3. Share from Internal Revenue Collections

a. Receipt of Notice ofFunding Check Issued

from the DBM and creditmemo from the bank for

Share from InternalRevenue Collections

Cash in Bank LCCAShare from Internal

Revenue Collections

110746

1,0001,000

b. Receipt of Notice of

Funding Check Issuedfrom the DBM for Sharefrom Internal Revenue

Collections

Due from NGAs

Share from InternalRevenue Collections

130

746

1,000

1,000

4. Grants and Donations


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a. Receipt of grants anddonations in cash

(Donations in kind shallbe booked-up using theappropriate asset

account)

Cash in TreasuryIncome from Grants

and Donations

101651

100100

b. Receipt of grants and

donations in kind - MotorVehicle:

Motor Vehicles

Invested Equity

218

537

800

800

Original Cost P1,000Less: Acc. Depn. 200

(At the end of Year)

Invested Equity 537 800

Book Value P 800 Government Equity 501 800

5. Borrowings

a. Receipt of borrowedfunds from bank -Principal P1,000

Cash in Bank LCCALoans Payable Current, Domestic

110403

1,0001,000

Bank Charges - 10 Bank Charges 951 10

Interest Expense - 12 Interest Expenses 952 12

Cash in Bank LCCA 110 22

b. Receipt of borrowedfunds from other agency-

Cash in TreasuryLoans Payable

Current, domestic

101403

1,0001,000

Principal - P1,000 Interest Expenses 952 6

Interest Expense - 6 Cash in Bank LCCA 110 6

c. Payment of loan

amortization

Loans Payable

Current, Domestic

403 200

Cash in Bank - LCCA 110 200

6. Subsidies

a. Subsidy from Other Funds (General Fund to Special Education Fund)

GENERAL FUND BOOKS

Transfer of subsidy toSpecial Education Fund(Aid to SEF to finance itsprojects)

Subsidy to Other FundsCash in Bank LCCA

897110

500500

SPECIAL EDUCATION FUND BOOKS

Receipt of subsidy fundsfrom Other funds

Cash in TreasurySubsidy from OtherFunds

101605

500500

b. Special Accounts (subsidy from General Fund proper to Operation ofPublic Market

BOOKS OF GENERAL FUND PROPER

Transfer of subsidy toSpecial Account

Subsidy to SpecialAccounts

898 500


BOOKS OF SPECIAL ACCOUNT (OPERATION OF PUBLIC MARKET)

Receipt of subsidy fromGeneral Fund Proper

Cash in Bank LCCASubsidy from Special

Accounts

110606

500500

7. Refund of Cash Advances

a. Cash Advance by an Officer for Local Travel

a. To take up the cash Due from Officers & 128 10


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advance Employees


b. To take up refund of

cash advance

Cash in Treasury

Due from Officers &Employees

101

128

10

10

b. Cash Advance by a Disbursing Officer for Salaries and Wages

a. To take up the cashadvance

Cash DisbursingOfficers

107 10


b. To take up refund ofcash advance

Cash in TreasuryCash Disbursing

Officers

101107

1010

8. Receipt pf Cash Bonds

a. To take up receipt ofperformance bond in

cash

Cash in TreasuryPerformance/ Bidders/

Bail Bonds Payable

101414

5050

b. To take up deposit of

performance bond

Cash in Bank LCCA

Cash in Treasury

110

101

50

50

c. To take up refund of

performance bond

Performance/ Bidders/

Bail Bonds Payable

414 50


D. DISBURSEMENTS

Sec. 37. Disbursements. Disbursements refer to the settlement of government

payables/obligations by cash or by check.

Typical transactions for which disbursements are made are as follows:

1. Personal Services2. Maintenance and Other Operating Expenses3. Capital Outlay4. Financial Expenses

Disbursements shall be covered by Disbursement Vouchers (DV) or payrolls and paideither by check or in cash. The Allotment and Obligation Slip (ALOBS) shall be an integral partof the DV.

Sec. 38. Certification on Disbursements. Disbursements from the general fund shallrequire the following certifications on the DV:

1. Certification and approval of vouchers and payrolls as to validity, propriety andlegality of the claim (Box A of DV) by the head of the department or office whohas administrative control of the fund concerned. In case of temporaryabsence or incapacity of the department head or chief of office, the officernext-in-rank shall automatically perform his function and shall be fullyresponsible therefor.

2. Necessary documents supporting the disbursement vouchers and payrolls as


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certified to and reviewed by the Accountant. (Box B of DV)3. Certification that funds are available for the purpose by the Local Treasurer.

(Box C of DV)

Sec. 39. Approval of Disbursements. Approval of disbursements by the Local ChiefExecutive (LCE) himself shall be required whenever local funds are disbursed, except forregularly recurring administrative expenses such as: payrolls for regular or permanentemployees, expenses for light, water, telephone and telegraph services, remittances togovernment creditor agencies such as GSIS, BIR, PHILHEALTH, LBP, DBP, NPO, PS of theDBM and others, where the authority to approve may be delegated. Disbursement vouchersfor expenditures appropriated for the operation of the Sanggunian shall be approved by theprovincial Vice Governor, the city Vice Mayor or the municipal Vice Mayor, as the case maybe.

Sec. 40. Payments by Check. Checks shall be drawn only on duly approved

disbursement vouchers. It shall be drawn by the local Treasurer and countersigned by the local Administrator. In case of temporary absence or incapacity of the aforesaid officials, theseduties shall devolve upon their immediate assistants. In the case of municipalities where no

Administrator has been appointed, checks shall be countersigned by the municipal Mayor. Incase, however, of expenditures appropriated for the operation of the Sanggunian, checksdrawn shall be countersigned by the provincial Vice Governor, the city Vice Mayor, or themunicipal Vice Mayor, as the case may be.

Sec. 41. Recording Check Disbursements in the Cashbooks. All checks issuedincluding cancelled checks shall be recorded chronologically in the Cashbook Cash in Bank.

Sec. 42. Release of Checks. The Treasurer shall release the check only to the payeeor his duly authorized representative. For purposes of releasing checks, the Treasurer shallmaintain a Check Register where all checks issued shall be recorded chronologically andwhere the claimants shall be required to acknowledge receipt thereof.

Sec. 43. Reporting of Checks Issued. The checks released to claimants shall bereported in the Report of Checks Issued (RCI) which shall be prepared daily by the Treasurerfor each fund. It shall be submitted to the Accountant for preparation of Journal of Entry

Voucher based on individual checks issued and recording in the Check DisbursementsJournal.

Sec. 44. Check Disbursement Process. The steps in disbursements through issuance

of check is shown below:

PR O C E S S PERSON / UNIT


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RESPONSIBLE

a. Gather supporting documents, andapproved ALOBS, prepare DV andforward to Head of Department.

Concerned Office

b. Sign Box A of DV and submit to theAccounting Unit.

Supervisor/Head ofDepartment

c. Check completeness of documents,assign number to DV, sign Box B andforward to Treasurer.

Accounting Unit

d. Verify claim, certify cash vailability (BoxC) and forward to approving officer.

Treasurer

Note: If funds are not available, return toAccountant for recording in the books as

Accounts Payable (AP). ForAP, JEV shall beprepared byAccounting Unit and JEV numberreflected in the DV. JEV forAP is recorded inGeneral Journal.Accountant retains copy ofDV and forwards to Treasurer.

e. Approve transaction (Box D) and forwardDV to Cashier.

Local ChiefExecutive orauthorized approvingofficer

f. Prepare, sign check and forward checkwith DV to countersigning officer.

Treasurer

g. Countersign check and forward toAccountant for preparation of theAccountants Advice of Local CheckDisbursements.

Administrator/ Vice-Mayor for the LocalSanggunianDisbursements

h. Prepare Accountants Advice of LocalCheck Disbursements and submit tobank. Return DV, check and supportingdocuments to Cashier/Treasurer.

Accountant

i. Record check in the Check Register andrelease check to claimant. Record

disbursement in Cashbook Cash inBank. Prepare Report of Checks Issued.Forward RCI with DV and supportingdocuments to Accounting Unit.

Treasurer

. Prepare the JEV based on individualchecks/voucher; sign "Prepared By"portion (approved by Chief Accountant),and record JEV in the CheckDisbursements Journal. Post monthly to

Accounting Unit


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the General Ledger/Subsidiary Ledgers.

k. Forward RCI, DV, supporting documentsand JEV to the Office of the Auditor.

Accountant

Sec. 45. Payments in Cash. Disbursements by cash shall be made from a cashadvance drawn and maintained in accordance with COA rules and regulations. Cash paymentsshall be made only on duly approved payrolls/disbursement vouchers. Cash advances, byregular and special disbursing officers shall be recorded through a debit to Cash DisbursingOfficers and a credit to Cash in Bank Local Currency, Current Account (LCCA).

Sec. 46. Reporting of Cash Disbursements. To account for cash disbursements, fromregular and special cash advances, the Accountable/Disbursing Officer shall prepare theReport of Disbursements and submit the original and duplicate copy withvouchers/payrolls/petty cash vouchers to the Accountant. He shall ensure that receipt of thereport and supporting documents, are properly acknowledged by the Accountant. The

Accountant shall verify the report including the completeness of the supporting documents,prepare the Journal of Entry Voucher (JEV) and record the transaction in the CashDisbursements Journal.

Sec. 47. Cash Advances for Travel. Cash advances for travel shall be recorded asdebit to the account Due from Officers and Employees and a credit to Cash in Bank LocalCurrency, Current Account.

For liquidation of travel where the amount of cash advance is equal to or more than thetravel expenses incurred, the Liquidation Report form shall be prepared by theofficers/employees concerned and submitted to the accounting unit as basis for preparation ofthe JEV to record liquidation. In case the amount of cash advance is less than the travelexpenses incurred, a Disbursement Voucher shall be prepared to liquidate the previous cashadvance and serve as a claim for reimbursement of the deficiency in amount.

Sec. 48. Payments out of the Petty Cash Fund. Petty cash fund shall be maintainedunder the imprest system. The fund shall be sufficient for the non-recurring, emergency andpetty expenses of the LGU for one month. Disbursements from the fund shall be through thePetty Cash Voucher (PCV) which shall be signed by the payee to acknowledge the amountreceived. The official receipt shall be attached to the PCV.

Petty cash fund shall be set up at the beginning of the year. An ALOBS shall be preparedfor the fund, recorded in the RAAO and obligated as Other Expenses.

Payments out of the fund shall be made through the use of PCVs duly supported byofficial receipts and other required documents. Each PCV shall not exceed Php1,000.00.

A Disbursement Voucher shall be prepared for replenishments of the petty cash fundduring the year duly supported by a list/summary of PCVs, the PCVs and its supportingdocuments. ALOBS shall be prepared for each replenishment and recorded in the RAAO


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based on actual expenses incurred.

At the end of the year, the petty cash fund shall be fully liquidated by preparing a Reportof Disbursement supported by the list/summary of PCVs, the PCVs and its supportingdocuments. The ALOBS setting up the fund at the beginning of the year shall be cancelled.

Another ALOBS shall be prepared taking up the liquidation and recorded in the RAAO based

on the actual expenses incurred. Unused cash shall be returned to the Treasurer who shallissue an Official Receipt to acknowledge the amount returned. A new Cash Advance for PettyCash Fund shall be set up in the ensuing year.

Sec. 49. Cash Disbursement Process. Disbursement process for payment of salariesand wages out of cash advances is as follows:


a. Processing of Payrolls to be paid by cashis the same as that of steps (a) to (e) forcheck disbursements.

Concerned offices

b. Gather duly certified and approvedpayrolls to be paid out of cash advance.Prepare DV for cash advancecorresponding to the net amount ofpayroll/s. Sign Box A of DV and submit tothe Accounting Unit.

Office of theTreasurer

c. Check completeness of documents/previous cash advance liquidated, assign

number to DV, sign Box B and forward toApproving Officer.

Accounting Unit

d. Approves DV and forward to Treasurerfor preparation of checks.

Local ChiefExecutive

e. Prepare and sign check, and forwardcheck with DV to countersigning officer.

Treasurer

f. Countersign check and forward toAccountant for preparation of Advice.

Administrator

g. Prepare Accountants Advice of Local

Check Disbursements and return DV,check and supporting documents toCashier/Treasurer.

Accountant

h. Encash check and pay claimants. Recorddisbursement in Cashbook Cash

Advances.

Treasurer/Disbursing Officer

i. Return unused cash to the Treasurer/ Disbursing Officer


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Cashier. An official receipt (OR) shall beissued by the Treasurer/Cashier toacknowledge the return of unused cashand indicate check no. of cash advancegranted on the face of OR. Record therefund as credit to cash advance andattach OR to the Cashbook Cash

Advances.

. Prepare Report of Disbursement, attachpaid payrolls/ supporting documents andcopy of OR for unused cash advancereturned to Treasurer/Cashier. Sign"Certified Correct" portion of Report ofDisbursement and submit to AccountingUnit.

Disbursing Officer

k. Prepare JEV to record the liquidation ofcash advance. Record JEV in the CashDisbursements Journal (CDJ). Postmonthly to the General Ledger/Subsidiary Ledger.

Accountant

l. Forward Report of Disbursement andsupporting documents including JEV tothe Office of the Auditor.

Accountant

Sec. 50. Purchase or Construction of Property, Plant and Equipment. Property,plant and equipment include land and land improvements, buildings, equipment, motorvehicles, books, machineries, ordnance, etc. and public infrastructure. These are chargedagainst appropriations/allotments for capital outlay when obligated.

Property, plant and equipment acquired through purchase shall include all costs incurredto bring it to the location necessary for its intended use, like transportation, freight, installationcosts, etc. In the books of accounts, the purchase is immediately recorded as asset.

Property, plant and equipment to be constructed may be classified as agency assets andpublic infrastructures. Agency assets are those to be used by the LGU concerned, likebuildings, while public infrastructures are those to be used by the general public. Theconstruction period theory shall be used in recording both types of assets. This means thatexpenses such as license fees and bonus paid to contractor for completing the work ahead ofschedule, etc. during the construction period shall be added to the total cost of the project.However, liquidated damages charged to the contractor for delayed completion should bededucted from the total cost.

During the construction period, agency assets and public infrastructures shall be taken upin the books as "Construction in Progress" with the appropriate asset classification. As soon asthe project is completed, the Construction in Progress for agency asset is closed to theappropriate asset account.

For public infrastructures funded out of regular income, the Construction in Progressaccount is transferred to the Public Infrastructures account upon completion. At the end of theyear, the latter account is closed to the Government Equity and the asset is recorded in the


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Registry of Public Infrastructures (RPI). However, completed public infrastructures funded outof a loan shall be closed to the Government Equity account only upon full payment of the loan.

A disclosure of public infrastructures completed funded from loans shall be made in the Notesto Financial Statements.

Sec. 51. Purchase of Supplies. Purchase of supplies and materials for stockregardless of whether or not they are consumed within the accounting period shall be recordedas assets using the Inventory account following the Perpetual Inventory Method (refer toChapter 7 Supplies orProperty). However, supplies and materials purchased out of the PettyCash Fund for immediate use or for emergency shall be taken up as expenses.

Sec. 52. Pro-forma Accounting Entries. Pro-forma accounting entries fordisbursement transactions are shown below:

Particulars Account Title

Acct.

Code Debit Credit

1. Payment through Cash Advances

a. Cash advance for personal services

Enter obligation in RAAOPS forP18,000 Salaries and Wages, P5,000Additional Compensation, andP3,000Personnel Economic ReliefAllowance

(PERA).

1. Grant of cash advancefor payroll


107 21,000

Cash in Bank LCCA 110 21,000

2. Liquidation of cashadvance for payroll

Salaries and Wages Regular Pay

801 18,000

P E R A 804 3,000

Additional Compensation 805 5,000

Withholding TaxesPayable

410 2,000

GSIS Payable 411 1,500

PAG-IBIG Payable 412 1,500


107 21,000

Enter obligation in RAAOPS forP1,500 Life and Retirement Insurance ContributionsandP1,500PAG-IBIG Contributions.

3. Government share for life

and retirement insuranceand PAG-IBIG

Contributions

Life and Retirement

Insurance ContributionsPAG-IBIG Contributions

GSIS Payable

817

818

411

1,500

1,500

1,500PAG-IBIG Payable 412 1,500

c. Cash advance for travel

Enter obligation in RAAOMO for Travel ofP1,000

1. Grant of cash advance Due from Officers andEmployees

128 1,000



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2. Liquidation of cashadvance during the

current year (assumingonly P900 was utilizedand P100 was refunded)

Traveling Expenses Local

Due from Officers andEmployees

831

128

900

900

Adjust RAAOMO for refund of cash advance ofP100

3. For amount refundedwhere official receipt wasissued

Cash in Bank LCCADue from Officers and

Employees

110128

100100

2. Payment by Check

a. Maintenance and Other Operating Expenses

Enter obligation in RAAOMO for rentP3,000

1. Payment of rent Rent Expense 841 3,000


Enter obligation in RAAOMO for electricity ofP1,500 and telephone/internet ofP2,000

2. Payment of utilities

(MERALCO and PLDT)

Electricity

Telephone/Telegraph andInternet

835

837

1,500

2,000


Enter obligation in RAAOMO for training and seminar expenses ofP1,000

3. Payment of seminar fee Training and Seminar

Expenses

833 1,000


E. MISCELLANEOUS TRANSACTIONS

Sec. 53. Miscellaneous Transactions. Miscellaneous transactions refer totransactions that are unique and not recurring in the ordinary course of operations of thegovernment. These transaction types seldom take place or ideally should not happen at all.The following maybe considered miscellaneous transactions:

1. Loss of Cash and Property Accountability2. Cash Overage3. Dishonored Check4. Lost/Destroyed/Stale/Obsolete and Fraudulently Encashed Check5. Settlement of Suspensions/Disallowances/Charges6. Refund of Overpayments

Sec. 54. Loss of Cash and Property. Loss of cash and property may be due tomalversation, theft, robbery or other causes.

Cash shortage discovered during cash examination conducted by auditors is reportedthrough the Report of Cash Examination within ten (10) working days from the completion ofexamination pursuant to COA Memorandum No. 84-373A. The auditor issues an audit report incase of shortage in property accountability. As soon as a shortage is definitely established, the

Auditor shall issue a memorandum pertaining thereto and the Accountant shall draw a Journal


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of Entry Voucher to take up the shortage as a receivable from the accountable officerconcerned.

In case of loss of property due to other causes (theft, force majeure, fire, etc.), a reportthereon shall be prepared by the accountable officer concerned for purposes of requestingrelief from accountability. No accounting entry shall be made but the loss shall be disclosed in

the notes to financial statements pending result of request for relief from accountability.

Sec. 55. Grant of Relief from Accountability. When a request for relief for shortagesor loss of funds is granted, a copy of the decision shall be forwarded to the Chief Accountantwho shall draw a JEV to record the transaction. The loss shall be debited to the Loss of Assetsaccount and credited to the appropriate receivable account. In case the request for relief isdenied, immediate payment of the shortage shall be demanded from the accountable officer.Restitution shall be acknowledged by the issuance of an official receipt.

In case the request for relief from accountability for loss of property caused by fire, theft,force majeure or other causes is granted, a copy of the decision shall likewise be forwarded to

the Chief Accountant for the preparation of the JEV. The loss shall be debited to the Loss of Assets account and credited to the appropriate asset account. If request for relief fromaccountability is denied, the loss shall be taken up as a receivable from the accountableofficer/persons liable and shall be credited to the appropriate asset account.

Sec. 56. Cash Overage. In case the cash examination disclosed cash overage, asdetermined by the auditor, the amount shall be forfeited in favor of the government and anofficial receipt shall be issued by the collector/teller. The cash overage shall be taken up asOther Specific Income.

Sec. 57. Dishonored Checks. A check is said to be dishonored when upon its beingduly presented for payment, such payment is refused or cannot be obtained.

Upon receipt of the debit memo and the dishonored check(s) from the bank, constructivecancellation of the official receipt covering the dishonored check shall be immediately effectedby the Treasurer on the copy in his possession. The Treasurer shall immediately photocopythe dishonored checks and record as credit in the CashbookCash in Bank and cancelpayment in the taxpayers index card. He shall also notify the collector/teller of the dishonorand the cancellation of the official receipt. The collector/teller shall note the cancellation in thetriplicate copies of the receipt. The Treasurer shall then inform the Auditor who shall effect thecancellation in the duplicate copy of official receipt, in case the same has already been

submitted for audit.

The Treasurer shall forward the debit memo and the photocopy of the dishonored checksto the Accountant. The Accountant shall cancel the official receipt if still in his possession. Heshall prepare the Journal of Entry Voucher (JEV) taking up the dishonored check by creditingthe Cash in Bank account and debiting the appropriate income account. In case of dishonor ofcheck payments for Real Property Tax (RPT) or Special Education Tax (SET), the RPT/SETReceivables and corresponding Deferred RPT/SET Income shall be restored. The accountsDue to LGUs, RPT Income, Cash in Bank and RPT Discount shall be adjusted accordingly. Heshall furnish the Treasurer with a copy of the duly approved JEV. The Treasurer shall record


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the JEV number in the Cashbook-Cash in Bank as reference in the entry effecting thecancellation of the dishonored check.

Sec. 58. Cancellation of Lost Check Issued. A check is considered lost when it is

misplaced, waylaid or left behind inadvertently/negligently by the payee or holder in due courseor by the custodian/carrier thereof and after diligent search cannot be found or located; orwhen it is lost due to fortuitous event, theft or robbery.

Upon submission of sworn statement from the payee that a check issued by the LGU islost, the treasurer shall immediately notify the bank concerned for the stoppage of payment.He shall forward the sworn statement to the accountant who shall prepare the JEV to cancelthe payment made. Copy of the JEV shall be furnished the treasurer as basis for him to debitthe amount in the Cashbook Cash in Bank.

Sec. 59. Spoiled and Stale Checks. Checks may be cancelled when they become

spoiled or stale. A check is considered spoil when, it is torn, mutilated, defaced or witherasures/errors affecting the genuineness of any material information contained therein.

It is stale, if it has been outstanding for over six months from date of issue or asprescribed by the depository bank. At least one month before a check becomes stale, theTreasurer shall send a written notice to the payee of the existence of the check.

A spoiled or stale check shall be marked cancelled on its face and reported as follows:

1. For spoiled checks which are immediately cancelled and for which the Reportof Checks Issued (RCI) has not yet been prepared, the cancelled check shallbe attached to the RCI and reported chronologically with the other checks

issued and the word"Cancelled

"shall be indicated on the report.2. For stale checks which have been unclaimed and thus, the original DV and

supporting documents are still with the Treasurer, the cancelled check shall bepresented in the RCI after the last check issued for the period indicated in thereport. The original DV and supporting documents shall be returned to the

Accountant who shall prepare a JEV to record the transaction as AccountsPayable.

3. For checks which became spoiled or stale in the hands of the payee andwhich require replacement, a new check may be issued upon submission ofthe spoiled or stale check to the Treasurer. A certified copy of the DV shall berequested from the Auditor for presentation to the Administrator/Local ChiefExecutive who shall countersign the check. The cancelled check shall bereported and attached to the RCI prepared at the period of cancellation. Thereplacement check shall also be reported chronologically in the RCI.

Sec. 60. Suspensions, Disallowances and Charges. Disallowances and chargesshall be taken up in the books of accounts only when they become final and executory. The

Accountant shall prepare the Journal of Entry Voucher (JEV) to take up the Receivable Disallowances and Charges and credit the appropriate expense account for the current year or


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prior years adjustment if pertaining to expenses of previous years.

Cash settlement of disallowances shall be recorded thru the JEV by debiting Cash inTreasury and crediting the Receivable Disallowances and Charges account.

Suspensions in audit and settlement thereof shall not be recorded in the books of

accounts.

Sec. 61. Pro-forma Accounting Entries. The following the are pro-forma accountingentries for miscellaneous transactions:


1. Cash Shortage

a. Cash shortage of the of the Disbursing Officer

To take up cash shortage Due from Officers andEmployees

128 50


107 50

b. Cash Shortage of the Treasurer

To take up cash shortage Due from Officers and

Employees

128 50

Cash in Treasury 101 50

2. Grant of Relief from Accountability for Loss of Government Funds

To record the loss of fund by

a Disbursing Officer

(allegedly thru theft ) = P50

Due from Officers and

Employees


128

107

50

50

To take up relief fromaccountability

Loss of Assets (currentyear) or Prior Years

adjustments (prioryears)

948 50


128 50

3. Cash Settlement in case of denial of Request for Relief from

Accountability

To take uppayment/settlement

Cash in TreasuryDue from Officers and

Employees

101128

5050

4. Cash Overage

To take up cash overagediscovered during cashexamination

Cash in TreasuryOther Specific Income

of LGU

101792

5050

5. Dishonored Checks

From payment of real property tax in the current year or prior year


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Upon receipt of advice ofdishonored check and

cancellation of OfficialReceipt


Deferred Real PropertyTax Income

124

448

50

50

Due to LGUs 431 30

Real Property Tax

Income

711 20


Receipt of refund/settlement Cash in TreasuryReal Property Tax

Receivable

101124

5050

6. Lost/Destroyed/Stale/Obsolete Checks

Check issued in the current/prior year for replacement

Check cancellation Cash in Bank LCCA 110 50

Accounts Payable 401 50

Replacement Accounts Payable 401 50


7. Disallowances and Charges

a. Recording of disallowance for current years transaction

When the disallowancebecomes final and

executory

Receivables Disallowances/

Charges 138 10

Overpayment of Office

Supplies

Office Supplies

Expense 849 10

Amount paid - P100

Should be - 90Difference - 10

Settlement of Disallowance Cash in Treasury

Receivables Disallowances/Charges

101

138

10

10

b. Recording of disallowance for prior years transaction

When the disallowancebecomes final and executory


138 10

Prior Years Adjustments 533 10

Settlement of disallowance Cash in Treasury

Receivables Disallowances/

Charges

101

138

10

10

c. Settlement of Charges

c.1 Recording of charges which collection were made in the current year

When the charge becomes

final and executory Underpayment ofFranchise Tax

Receivables

Disallowances/Charges

Franchise Tax

138

724

10

10

Amount Paid - P 100


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Should be - 110

Charge - 10

Settlement Cash in Treasury 101 10


138 10

c.2Recording of charges which collection were made in the prior year

When the charge becomesfinal and executory


138 10

Prior Years Adjustments 533 10

Settlement Cash in Treasury 101 10


138 10

8. Refund of Overpayment

a. Overpayment taken up as receivable

To record overpayment ofsalaries and wages (When

overpayment is ascertained)


Salaries and Wages Regular Pay

128

801

10

10

To record refund ofoverpayment

Cash in TreasuryDue from Officers and

Employees

101128

10 10

b. Refund of overpayment not taken up as receivable

Refund of overpayment ofSalaries and Wages

Regular Pay during the

current year

Cash in TreasurySalaries and Wages

Regular Pay

101801

10 10

To take up refund of over payment in the ensuing year

Cash in TreasuryPrior Years Adjustments

101533

10 10

F. ADJUSTING AND CLOSING ENTRIES

Sec. 62. Adjusting Entries. Adjusting entries are accounting journal entries made inorder to ensure that revenues and expenses are recorded in the period when they are earnedor incurred following the revenue recognition and the matching principles.

Adjusting entries are required every time financial statements are prepared. The use of

the adjusting entries makes it possible to report on the Balance Sheet the appropriate assets,liabilities and equity accounts at the statement date and the Statement of Income andExpenses the net income/(loss) for the period.

Sec. 63. Types of Adjusting Entries. There are two types of adjusting entries:

a. Prepayments; and


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b. Accruals

Sec. 64. Prepayments. Prepayments are expenses paid or revenues received beforethey are incurred or earned. Adjusting entries for prepayments are required at the statement

date to record the portion of the prepayment that represents the expense incurred or therevenue earned in the current accounting period. Sub-categories of prepayments are prepaidexpenses and unearned revenues.

Prepaid expenses are expenses paid in cash and recorded as assets before they areused or consumed. Prepaid expenses expire either with the passage of time (e.g. rent) orthrough use and consumption (e.g. supplies). The adjusting entry for prepaid expenses is adebit to the expense account and a credit to the asset account. Examples are rent, supplies,etc. Acquisition of productive facilities is viewed essentially as long term prepayments, hence,periodic adjusting entries for depreciation are included in this category. For depreciation, theentry is a debit to depreciation expense and a credit to accumulated depreciation. Thedepreciable or estimated life for different types of agency assets are presented in Table2 (Annex 7).

Unearned revenues are recorded as a liability when received and considered earnedupon rendition of service (e.g. tuition fees) or the passage of time (e.g. advance payment ofreal property taxes). The adjusting entry for unearned revenues is a debit to a liability accountand a credit to revenue account.

Illustrative accounting entries:


1. Report of supplies utilized

for P2,000.

Office Supplies

ExpenseOffice Supplies Inventory

849

149

2,000

2,000

2. Application of advance RPTfor P2,500.

Deferred Credits toIncome

Real Property Tax

440

711

2,500

2,500

Sec. 65. Accruals. Accruals are revenues earned and expenses incurred in the currentaccounting period that have not yet been recorded. Adjusting entries for accruals are requiredto record revenues earned and expenses incurred in the accounting period.

Adjusting entry for accrued revenues is a debit to a receivable account and a credit to anincome account. Examples are interest, share from internal revenue collections covered bynotice of funding checks issued, etc.

Adjusting entry for accrued expenses is a debit to the appropriate expense account and acredit to a payable account. Examples are accrued salaries, bad debts, etc. For bad debts, theentry is a debit to Bad Debts Expense and a credit to Allowance for Doubtful Accounts.

Illustrative accounting entries:

Particulars Account Title

Acct.

Code Debit Credit

1. Receipt of the Notice of Due from NGAs 130 20,000


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cHAPTER 1. THE BOOKS OF ACCOUNTS, REGISTRIESAND CASH RECORDS

Sec. 01. Books of Accounts. The books of accounts used by the local government unit shall

consist of the following:

1. records for recording transactions in chronological order, known as the journals or booksof original entry; and

2. records for classifying and summarizing the effects of the transactions on individualaccounts, known as ledgers or books of final entry.

Sec. 02. Books of Original Entry. Books of original entry or journals, shall be used to record intime sequence, financial transactions and information presented in duly certified and approved accountingdocuments.

The books of original entry shall consist of the following journals:

1. General Journal2. Special Journals

a. Cash Receipts Journalb. Check Disbursements Journalc. Cash Disbursements Journal

The basis of recording in the journals shall be the Journal Entry Voucher (JEV).

Sec. 03. General Journal. This journal (Annex 1) shall be used to record all transactions whichcan not be entered in the special journals. It provides columns for the date, the JEV number, particularswhich give explanation for the transactions recorded, the account code used, posting reference and thedebit and credit amount.

Sec. 04. Special Journals. The special journals are specifically designed to record transactionswhich are repetitive in nature. Special columns are provided to facilitate summation and postings in thegeneral ledger.

Sec. 05. Cash Receipts Journal (CRJ). This journal (Annex2) is used to record all collectionsand deposits reported during the month. It provides columns for the date, RCD number, JEV number,name of collecting officer, collections (debit and credit), deposits (debit and credit) and sundry columns inthe collections and deposits columns (debit and credit).


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Sec. 06. Check Disbursements Journal (CkDJ). This journal (Annex3) is used to record checkpayments made by the treasurer/cashier. It provides columns for the date, RCI number, JEV number,payee, debit and credit columns for appropriate disbursements accounts and sundry columns (debit andcredit).

Sec. 07. Cash Disbursements Journal (CDJ). This journal (Annex 4) is used to record allpayments in cash by disbursing officers out of their cash advances. It provides columns for the date,reference/RD number, JEV number, accountable officer, debit and credit columns for appropriatedisbursements accounts and sundry columns (debit and credit).

Sec. 08. Books of Final Entry. The books of final entry are the General Ledger and SubsidiaryLedgers.

Sec. 09. General Ledger (GL). The General Ledger(Annex5) is a book of final entry containingaccounts arranged in the same sequence as the chart of accounts. Totals of columns in the special

journals and the individual entries in the General Journal are directly posted in this book. At the end ofeach month, the accounts are footed and at the end of the year, these are totaled, ruled and closed andthe balance extracted to serve as the opening balance of the new fiscal year.

Sec. 10. Subsidiary Ledger (SL). The Subsidiary Ledger(Annex 6) is a book of final entry

containing the details or breakdown of the balances of the controlling account appearing in the Generalledger. Postings to the subsidiary ledgers generally come from the source documents. Examples ofgeneral ledger accounts which has subsidiary ledgers are Cash Disbursing Officers, Cash in Bank Local Currency Current Accounts, Accounts Receivable, Accounts Payable, Special Accounts in theGeneral Fund, etc. The totals of the subsidiary ledger balances shall be reconciled to their respectivecontrol account at the end of every month.

Sec. 11. Supplies Ledger Card (SLC). The Supplies Ledger Card (Annex 7) is a subsidiaryledger to be maintained by the accounting office for each type of supplies, crops and other inventoryitems, to record acquisition, issuance and disposal. The SLC shall be the basis in filling up the Supplies

Availability Inquiry (SAI).

Sec. 12. Work, Other Animals and Breeding Stocks Ledger Card. The Work, Other Animalsand Breeding Stocks Ledger Card (Annex 8) is a subsidiary ledger to be kept for each large cattle whichincludes cows, horses, mules, asses, carabaos and other members of the bovine family, acquired bypurchase or raised which attained the age of one year.


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Small animals like pigs, goats, etc. shall also be singly recorded in this form and taken-up asinventory upon reaching marketable age or are ready for use.

Sec. 13. Property, Plant and Equipment Ledger Card (PPELC). The Property, Plant and

Equipment Ledger Card (Annex 9) is a subsidiary ledger to be kept for each class of property, plant andequipment which shall record the acquisition, description, custody, estimated life, rate of depreciation,disposal and other information about the property, plant and equipment, based on the source documentsof the transactions.

Sec. 14. Investment Ledger Card (ILC). The Investment Ledger Card (Annex 10) is a subsidiaryledger to be kept for each type of investment which shall record the number of shares acquired,acquisition cost and other relevant information.

Sec. 15. Real Property Ledger Card (RPLC). The Real Property Ledger Card (Annex 11) is a

subsidiary ledger card to be kept for each real property (land) which record the property description,location, acquisition cost, additions, and disposition.

Sec. 16. Construction in Progress Ledger Card (CIPLC). The Construction in Progress LedgerCard (Annex 12) is a subsidiary ledger card to be kept for each construction in progress which recordsthe amount paid per billing of the contractor in case of construction by straight contract and the amountpaid for materials, labor and overhead in case of construction by administration.

Sec. 17. Registries. Registries are accounting records which shall be maintained to monitoraccounts/assets not recorded in the books of accounts.

Sec. 18. Registry of Appropriations, Allotments and Obligations (RAAO). The Registry of Appropriations, Allotments and Obligations is prepared per function/program/project, allotment class,current/continuing appropriations and fund. This record shall be maintained by the accounting office tomonitor appropriations, allotments received and the obligations incurred against said allotments. Thebalance is extracted every time an entry is made to prevent incurrence of obligations in excess ofallotments received or approved appropriations.

The RAAOs are as follows:

y Registry of Appropriations, Allotments and Obligations Capital Outlay (RAAOCO);

y Registry of Appropriations, Allotments and Obligations Maintenance and OtherOperating Expenses (RAAOMO);

y Registry of Appropriations, Allotments and Obligations Personal Services (RAAOPS);and

y Registry of Appropriations, Allotments and Obligations Financial Expenses (RAAOFE).


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Sec. 19. Registry of Appropriations, Allotments and Obligations Capital Outlay(RAAOCO). The Registry of Appropriations, Allotments and Obligations Capital Outlay(Annex 13)shall

be used to record appropriations, allotments received and obligations incurred for capital outlay.

Sec. 20. Registry of Appropriations, Allotments and Obligations Maintenance and OtherOperating Expenses (RAAOMO). The Registry of Appropriations, Allotments and Obligations Maintenance and Other Operating Expenses (Annex 14) shall be used to record appropriations,allotments received and obligations incurred for purchase of inventories and expenses classified underMaintenance and Other Operating Expenses in the Chart of Accounts.

Sec. 21. Registry of Appropriations, Allotments and Obligations Personal Services(RAAOPS). The Registry of Appropriations, Allotments and Obligations Personal Services(Annex

15) shall be used to record appropriations, allotments received and obligations incurred for expensesclassified under Personal Services in the Chart of Accounts.

Sec. 22. Registry of Appropriations, Allotments and Obligations Financial Expenses(RAAOFE). The Registry of Appropriations, Allotments and Obligations Financial Expenses (Annex16) shall be used to record appropriations, allotments received and obligations incurred for expenses

classified under Financial Expenses in the Chart of Accounts.

Sec. 23. Registry of Public Infrastructures (RPI). The Registry of Public Infrastructures(Annex17) shall be used to record completed infrastructures for use of the general public. A separate Registry

shall be maintained for each class of property or asset, as follows:

y Plazas, Parks and Monuments

y Roads Highways and Bridges

y Harbors, Seawalls, River Wall and Others

y Runways

y Railways

y Waterways, Aqueduct, etc.

y Irrigation canals and laterals

y Reforestation Projects

y Other Public Infrastructures.

Sec. 24. Registry of Reforestation Project (RRP). The Registry of Reforestation Project(Annex18) shall be used to record expenses incurred on reforestation projects.


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Sec. 25. Cash Records. Cash Records shall be used to record collections, deposits, withdrawalsand disbursements of cash. It shall be maintained by the Accountable Officers.

Sec. 26. Cashbook Cash in Treasury. Cashbook for Cash in Treasury (Annex 19)shall be used

to record collections (Debit column) and deposits to the bank (Credit column) based on the RCD. Thecashbook shall be maintained by the Treasurer by fund and shall be updated and balanced daily. The

Accountable Officer shall, at the end of the month or when required to do so by proper competentauthority, rule and foot the cashbook. He shall likewise accomplish the following certification in thecashbook:

I HEREBY CERTIFY that the foregoing is a correct and complete record of the cash transactionshad by me in my capacity as Treasurer/Cashier of ___________ during the period from ____________,20___ to ___________,20__, inclusive, as indicated in the corresponding columns.

Signature OverPrinted Name

________________, 20___

Deposits shall also be recorded in the debit column of the Cashbook Cash in Bank.

Sec. 27. Cashbook Cash in Bank. Cashbook for Cash in Bank (Annex20) shall be used torecord deposits of collections (Debit column) and withdrawals from the bank thru issuance of checks(Credit column). The cashbook shall be maintained by bank account and by fund and shall be updatedand balanced daily. The Accountable Officer shall, at the end of the month or when required to do so byproper competent authority, rule and foot the cashbook. He shall likewise accomplish the followingcertification in the cashbook:

I HEREBY CERTIFY that the foregoing is a correct and complete record of the cash transactions

had by me in my capacity as Treasurer/Cashier of ___________ during the period from ____________,20___ to ___________,20__, inclusive, as indicated in the corresponding columns.

Signature OverPrinted Name________________,20___

Sec. 28. Cashbook Cash Advances. The accountable officer shall maintain a cashbook forcash advances (Annex21) to record the cash advances received (Debit column) and payments, refundsand adjustments (Credit column) and the balance (Balance column). The Accountable Officer shall, at theend of the month or when required to do so by proper competent authority, rule and foot the cashbook.

He shall likewise accomplish the following certification in the cashbook:

I HEREBY CERTIFY that the foregoing is a correct and complete record of the cash transactionshad by me in my capacity as Disbursing Officer of ___________ during the period from ____________,20___ to ___________,20__, inclusive, as indicated in the corresponding columns.

Signature OverPrinted Name________________,20___


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HAPTER 1. INTRODUCTION

Sec. 1. Definition. The Chart of Accounts provides the framework within which theaccounting records are constructed. It is a list of general ledger accounts consisting of real and

nominal accounts.

Sec. 2. Rationale. The Chart of Accounts is prescribed for use by all sectors of thegovernment. The descriptions of all the accounts and the instructions as to when these are tobe debited and credited are provided to achieve uniformity in the recording of governmentfinancial transactions.

Sec. 3. Elements of Financial Statements. Elements of financial statements of

government agencies are those elements that relate to the status or measurement of financialposition and measurement of performance of government agencies which are relevant todecisions that would require the commitment of resources. Those elements directly related tothe measurement of financial positions as shown in the balance sheet are assets, liabilities andequity. The elements directly related to the measurement of performance which is shown in theStatements of Income and Expenses are revenue/income and expenses. The definitions of thedifferent elements are as follows.

a. Assets economic resources of an agency that are recognized and measuredin conformity with generally accepted accounting principles. Assets alsoinclude certain deferred charges that are not resources but that are recognizedand measured in conformity with generally accepted accounting principles.

b. Liabilities economic obligations of an agency that are recognized andmeasured in conformity with generally accepted accounting principles.Liabilities also include certain deferred credits that are not obligations but thatare recognized and measured in conformity with generally acceptedaccounting principles.

c. Equity the interest of the government in an agency which is the excess of anagencys assets over its liabilities.

d. Revenue/Income increase in economic benefits during the accounting periodin the form of inflows or enhancements of assets or decreases of liabilities thatresults in increases in equity.

e. Expenses decreases in economic benefits during an accounting period inthe form of outflow or depletions of assets or incurrence of liabilities thatresults in decrease in equity.

Sec. 4. Balance Sheet Accounts. The balance sheet accounts consist of assets,liabilities and equity. These are classified into the following:

Assets Current Assets

CashReceivablesMarketable Securities


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InventoriesPrepaid ExpensesOther Current Assets

Long-Term InvestmentsProperty, Plant and EquipmentOther Assets

Liabilities Current LiabilitiesLong-Term LiabilitiesOther Liabilities

EquityGovernment EquityProject Equity

Sec. 5. Revenue/Income and Expense Accounts. The revenue/income and expense

accounts consist of the following:

Revenue/Income General Income Accounts

Agency Specific Income Accounts

Expenses Personal ServicesMaintenance and Other Operating ExpensesFinancial Expenses

Sec. 6. Classification of Revenue/Income. The revenue/income accounts are

classified into:

a. General Income Accounts This account group encompasses all types ofrevenue/income generated by all sectors of government in the exercise of theiradministrative and regulatory function, income from publicenterprises/investments, and income from grants and donations includingsubsidies.

b. Specific Income Accounts This account group encompasses all taxes, feesand charges imposed by a specific sector of government for taxes due onincome, property, use or sale of goods and services, international trade andtransactions and other taxes as well as those arising from their regulatory andproprietary functions.

Sec. 7. Classification of Expenses.- The expense accounts are classified into:

a. Personal Services (PS) This account classification includes basic pay,allowances, bonus, cash gifts, incentives and benefits and other personnelbenefits of officers and employees of the government.

b. Maintenance and Other Operating Expenses (MOOE) This accountclassification includes expenses necessary for the regular operation of an


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agency like traveling expenses, repairs and maintenance, subsidies, etc.c. Financial Expenses (FE) - This account classification includes bank charges,

interest expenses, commitment charges and other financial charges. It alsoincludes losses incurred relative to foreign exchange transactions.

Sec. 8. Intermediate Accounts. The intermediate accounts are accounts which areclosed ultimately to the Government Equity account at the end of accounting period.

Sec. 9. Account Codes. The New of Chart of Account consists of three-digit codes

grouped as follows:

Accounts Account Code

Assets Asset Contra Accounts 300-399

Liabilities 400-499Equity 500-599Revenue/Income 600-799

General Account 600-699 Agency Specific Account 700-799

Expenses 800-999Personal Services 801-830Maintenance and Other

Operating Expenses831-950

Financial Expenses 951-960

NGAS Manual for Local Government UnitsVolume III - The Chart of Accounts

CHAPTER 3. DESCRIPTION OF ACCOUNTS

Sec. 11. Description of Accounts. Each account in the chart of accounts isdefined/described. Instructions on when to debit and credit the balance sheet and intermediateaccounts are also presented.

A S S E T S

CASH

Sec. 12. Cash in Treasury (101). This account is used to record in the books of local


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government units the amount of cash in their respective Treasuries.

Debit this account for:

Central Bank notes, coins, checks, bill of exchange and draftsreceived by local treasurers

Money order received by local treasurersOther legal tenders received

Credit this account for:

Deposits with depository banksWithdrawals or reductions of the above items

Sec. 13. Petty Cash Fund (105). This account is used to record in the books of theagency, the cash advances granted to regular or special disbursing officers for the creation ofPetty Cash Fund and payment of petty or miscellaneous authorized expenditures which cannotbe conveniently paid by check.


Cash advances granted as Petty Cash Fund to duly designatedregular or special disbursing officers for payment of petty ormiscellaneous authorized expenditures


Final liquidation of Petty Cash FundRefund of unused portion at year-end

Sec. 14. Cash Disbursing Officers (107). This account is used to record the amountof cash advances granted to either regular or special disbursing officers of the agency.


Cash advances to duly designated regular or special disbursingofficers for payment of salaries and wages

Cash advances to postmasters and telegraph operators forauthorized disbursements

Cash advance to special disbursing officers for specific purpose oractivity


Liquidation/Authorized official payments made by disbursingofficers/postmasters/telegraph operators

Refund of unused portion of advances upon completion of thepurpose/activity or at end of year


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Incurrence of cash shortage

Sec. 15. Cash in Bank Local Currency, Current Account (110). This account isused to record deposits/withdrawals in local currency in a current account maintained with

Authorized Government Depository Banks (AGDBs).


Deposits of local currency in current accountCredit advices/memos receivedInterest earned net of withholding tax


Checks issuedDebit advices/memos received

Sec. 16. Cash in Bank Local Currency, Savings Account (111). This account isused to record deposits/withdrawals in local currency in a savings account maintained with

AGDBs.


Deposits of local currency in savings accountCredit advices/memos receivedInterest earned net of withholding tax


Withdrawal or reduction of depositsDebit advices/memos received

Sec. 17. Cash in Bank Local Currency, Time Deposits (112). This account is usedto record placement in local currency of excess cash or cash not earmarked for immediate usewith AGDBs for a specified period.


Deposits of local currency for a specific periodInterest earned net of withholding tax


Withdrawal of deposits or redemption upon maturity


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Sec. 18. Cash in Bank Foreign Currency, Current Account (113). This account isused to record deposits and withdrawal in foreign currency in current account maintained with

AGDBs.


Deposits of foreign currency in current accountCredit advices /memos receivedInterest earned net of withholding tax


Checks issuedDebit advices/memos received

Sec. 19. Cash inB

ank Foreign Currency, Savings Account (114). This account isused to record deposits/withdrawals in foreign currency in savings account maintained withAGDBs.


Deposits of foreign currency in savings accountCredit advices/memos receivedInterest earned net of withholding tax


Withdrawals or reduction of deposits

Debit advices/memos received

Sec. 20. Cash in Bank Foreign Currency, Time Deposits (115). This account isused to record time deposits in foreign currency maintained with AGDBs.


Deposits of foreign currency for a specific periodInterest earned net of withholding tax


Withdrawals or reduction of deposits due to redemption at maturity

RECEIVABLES


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Sec. 21. Accounts Receivable (121). This account is used to record the amount duefrom customers/clients resulting from services rendered, trading/business transactions or saleof merchandise or property which are expected to be collected in the regular course ofbusiness or over a definite period.


Services rendered on accountSale of merchandise or property on accountOther amount due from customers/client resulting fromtrading/business

transactions/ operations


Collection of the amount due from customers/ clientsAuthorized write-off of accounts

Sec. 22. Notes Receivable (122). This account is used to record the value ofpromissory notes, time drafts, trade acceptances and other negotiable short-term instrumentsfrom trade debtors.


Value of promissory notes, time drafts, trade acceptances and othernegotiable short-term instruments received


Collections made from promissory notes, time drafts, tradeacceptances

and other negotiable short-term instrumentsAuthorized write-off of accounts

Sec. 23. Loans Receivable, Current (123). This account is used to record the amountof short-term loans and current portion of long-term loans granted by the LGU to dulyauthorized recipients in accordance with existing agreement.


Short-term loans granted to duly authorized recipientsCurrent portion of long-term loans receivables


Collections made from the loans grantedAuthorized write-off of accounts


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Sec. 24. Real Property Tax Receivable (124). This account is used to record theamount due from taxpayers for basic real property taxes.


Amount due from taxpayers for basic real property taxes


Collection of the amount due from taxpayers

Sec. 25. Special Education Tax Receivable (125). This account is used to record theamount due from taxpayers for additional levy on real property taxes accruing to SpecialEducation Fund.


Amount due from taxpayers for additional levy on real property taxes


Collection of the amount due from taxpayers

Sec. 26. Interest Receivable (126). This account is used to record the uncollected

interest earned from short term/long term investments.


Interest earned but not yet collected


Collection of the interest earned Authorized write-off of accounts

Sec. 27. Due from Officers and Employees (128). This account is used to record theamount due from officers and employees of the agency and advances granted for officialtravels.


Overpayment of salaries, fringe benefits and other emolumentsCash shortagesCash Advances granted for travel (local and foreign) subject to


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liquidationOther receivables from officers and employees


Collection of overpayment of salaries, fringe benefits and other

emolumentsCollections of cash shortagesLiquidation of cash advances granted for travelRefund of excess/unused portion of cash advances

Authorized write-off of accounts

Sec. 28. Due from Other Funds (129). This account is used to record the amount duefrom other funds of the LGUs.


Receivables from other funds of LGUs


Receipt of amount due from other funds of LGUs

Sec. 29. Due from NGAs (130). This account is used to record the amount due fromdepartments, bureaus and other offices of the National Government.


Amount advanced for the account of NGAsOverpayment to NGAs

Amount due from DBM for IRA, Share from National Wealth,etc. covered by allotment advice

Adjustment


Collection of receivables from NGAsReceipt of IRA

Authorized write-off of accounts

Sec. 30. Due from LGUs (131). This account is used to record the amount due fromprovinces, cities, municipalities, barangays and other local government units.


Advances granted to LGUsShare of LGUs from Real Property Tax (Basic and additional)


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Overpayment to LGUs


Collections of receivables from LGUsAuthorized write-off of accounts

Sec. 31. Due from GOCCs (132). This account is used to record the amounts due fromGovernment-Owned and/or Controlled Corporations including Government FinancialInstitutions (GFIs).


Amount paid for the account of GOCCs/GFIsInsurance claim from General Insurance Fund of GSISOverpayment to GOCCs/GFIsLoans granted to GOCCs/GFIs


Collections of receivables from GOCCs/GFIsAuthorized write-off of accounts

Sec. 32. Due from NGOs/POs (133). This account is used to record the release offunds entrusted to Non-Governmental Organizations/Peoples Organizations (NGOs/POs) forthe implementation of government projects.


Release of funds entrusted to NGOs/POs


Liquidation of funds entrusted to NGO/POsRefund of unused fund

Sec.

Ay en Research

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