New Government Accounting System

THE NEW GOVERNMENT ACCOUNTING SYSTEM MANUAL
For Local Government Units

Chapter 1.
INTRODUCTION
Sec. 01. Objectives of the Manual. The New Government Accounting System Manual presents the basic policies and procedures; the new coding system and chart of accounts; the
accounting books, reports/forms and financial statements, and illustrative accounting entries to be adopted by all local government units effective January 1, 2002. The objectives of the
Manual are to prescribe the following:
a)
b)
c)
Uniform guidelines and procedures in accounting for government funds and property;
New coding structure and new chart of accounts; and
New accounting books, reports/forms, financial statements and accounting entries.
Sec. 02. Coverage. This Manual shall be used by all local government units (LGUs).
Sec. 03. Legal Basis. This Manual is prescribed by the Commission on Audit pursuant to Article IX-D, Section 2 par. (2) of the 1987 Constitution of the Republic of the Philippines which
provides that:
"The Commission on Audit shall have exclusive authority, subject to the limitations in this Article, to define the scope of its audit and examination, establish the techniques and methods
required therefor, and promulgate accounting and auditing rules and regulations, including those for the prevention and disallowance of irregular, unnecessary, excessive, extravagant, or
unconscionable expenditures, or uses of government funds and properties". (underscoring supplied)
Chapter 2.
BASIC FEATURES AND POLICIES
Sec. 04. Basic Features and Policies. The new government accounting system has the following basic features and policies, to wit:
1.
Accrual Accounting. A modified accrual basis of accounting is used. Under this method, all expenses shall be recognized when incurred. Income shall be on accrual basis (e.g. Share
from Internal Revenue Collections) except for transactions where accrual basis is impractical (e.g. Market Fees) or when other methods may be required by law.
2.
One Fund Concept. This system adopts the one fund concept. Separate fund accounting shall be done only when specifically required by law or by a donor agency or when otherwise
necessitated by circumstances subject to prior approval of the Commission. As required under Sections 308, 309 and 310 of the Local Government Code, separate books shall be
maintained for the General Fund, Special Education Fund and Trust Fund.
3.
Special Accounts in the General Fund. Special accounts in the General Fund complete with subsidiary ledgers, shall be maintained for the following:
Public utilities and other economic enterprises;

Loans, interests, bonds issued, and other contributions for specific purposes;
Development projects funded from the Share in the Internal Revenue Collections; and
Such other special accounts which may be created by law or ordinance.
4.
Chart of Accounts and Account Codes. A new coding structure and a new chart of accounts with a three-digit account numbering system shall be adopted.
5.
Books of Accounts. The Books of Accounts are as follows:
6.
Journals
Cash Receipts Journal (CRJ)

Cash Disbursements Journal (CDJ)
Check Disbursements Journal (CKDJ)
General Journal (GJ)
7.
Ledgers
General Ledger (GL)

Subsidiary Ledgers, where applicable for:
8.
All the above records shall be maintained by the accounting unit of the LGUs. However, treasurers and disbursing officers shall also maintain their respective cash records such as:
9.
Cash
Receivables
Inventories
Investments
Property, Plant and Equipment
Liabilities
Income
Expenses
Cashbook Cash in Treasury

Cashbook Cash in Bank
Cashbook Cash Advances
The Treasurers/Collectors shall prepare the Report of Collections and Deposits (RCD) daily and the Report of Accountability for Accountable Forms (RAAF) monthly.
10. Financial Statements. The following statements shall be prepared:
Balance Sheet
Statement of Income and Expenses
Statement of Cash Flows
11. Notes to Financial Statements shall accompany the above statements.

12. Trial Balance. The two money-column trial balance shall be used.
13. Appropriations, Allotments and Obligations. Journal entry shall no longer be prepared to record the appropriations, receipt of allotments and incurrence of obligations. In lieu of this,
separate registries shall be maintained by the Accounting Unit to control the appropriations, allotments and obligations for each of the four classes of expenditures, namely:
Registry
Registry
Registry
Registry
of
of
of
of
Appropriations,
Appropriations,
Appropriations,
Appropriations,
Allotments
Allotments
Allotments
Allotments
and
and
and
and
Obligations
Obligations
Obligations
Obligations
Capital Outlay (RAAOCO)

Maintenance and Other Operating Expenses (RAAOMO)
Personal Services (RAAOPS)
Financial Expenses (RAAOFE).
14. Financial Expenses. Financial expenses such as bank charges, interest expenses, commitment fees and other related expenses shall be separately classified from Maintenance and
Other Operating Expenses (MOOE).
15. Perpetual Inventory of Supplies and Materials. Supplies and materials purchased for inventory purpose shall be recorded using the perpetual inventory system. Regular purchases
shall be coursed thru the inventory account and issuances thereof shall be recorded as they take place except those purchased out of petty cash fund which shall be for immediate
use and not for stock. Such case shall be charged immediately to the appropriate expense accounts.
16. Valuation of Inventory. Cost of ending inventory of supplies and materials shall be computed using the moving average method.
17. Maintenance of Supplies and Property, Plant and Equipment Ledger Cards. The Accounting Unit shall maintain Supplies Ledger Cards by stock number and Property, Plant and
Equipment Ledger Cards by category of assets.
18. Construction of Assets. For assets under construction, the Construction Period Theory shall be applied for costing purposes. Bonus paid to the contractor for completing the work
ahead of time shall be added to the total cost of the project. Liquidated damages charged and paid for by the contractor shall be deducted from the total cost of the asset. Any
related expenses incurred during the construction of the project, such as, license fees, permit fees, clearance fees, etc. shall be capitalized.
19. Public Infrastructures. Public infrastructures are assets for use of the general public, such as roads, bridges, waterways, railways, plazas, monuments, etc. A Registry of Public
Infrastructures (RPI) shall be maintained according to classification to record all infrastructures for use of the general public. The following are the Registries to be maintained,
classified by category of property, plant and equipment:
Registry of Public Infrastructure Bridges (RPIB)

Registry of Public Infrastructure Roads (RPIR)
Registry of Public Infrastructure Plazas, Monuments, etc. (RPIP)
20. During construction these infrastructures shall be recorded in the books under the account Construction in Progress. Upon completion, the completed asset shall be transferred to
the account Public Infrastructure. At the end of the year, completed assets under Public Infrastructure shall be transferred to the respective registry.
21. Completed public infrastructures funded out of a loan shall, however, be retained in the books of accounts until the loan is fully paid.
22. A Summary of all Public Infrastructures (based on the different registries) shall be prepared annually and included in the Notes to Financial Statements.
23. Depreciation. The straight-line method of depreciation shall be used. A residual value equivalent to ten percent (10%) of the cost shall be set-up and depreciation shall start on the
second month after purchase/completion of the property, plant and equipment. Public infrastructures shall not be charged any depreciation.
24. Reclassification of Obsolete and Unserviceable Assets, as well as Assets No Longer Used by the Agency to Other Assets Account. Assets declared by proper authorities as obsolete
and unserviceable, including assets of the agency no longer used, shall be reclassified to Other Assets account from the corresponding inventory and property, plant and equipment
accounts.
25. Allowance for Doubtful Accounts. An Allowance for Doubtful Accounts shall be set up for estimated uncollectible receivables. This will allow for a fair valuation of receivables.
Allowance for Doubtful Accounts shall be provided only for trade receivables.
26. Elimination of Contingent Accounts. Contingent accounts shall no longer be used. All financial transactions shall be recorded using the appropriate accounts. Cash shortages and
disallowed payments shall be recorded under receivable accounts Due From Officers and Employees and Receivables Disallowances/Charges, as the case may be.
27. Recognition of Liability. Liability shall be recognized at the time goods and services are accepted or rendered and supplier/creditor bills are received.
28. Interest Accrual. Whenever applicable and appropriate, interest income and/or expense shall be accrued and recognized in the books of accounts.
29. Accounting for Borrowings and Loans. All borrowings and loans incurred shall be recorded direct to the appropriate liability accounts.
30. Elimination of corollary and negative entries. The use of corollary and negative entries shall be stopped. Acquisition/Disposition of assets shall be debited/credited direct to the
appropriate asset accounts. If an error is committed, a correcting entry shall be prepared to adjust the original entry.
Chapter 3. ACCOUNTING SYSTEM

A. GENERAL ACCOUNTING PLAN
Sec. 05. General Accounting Plan. The General Accounting Plan shows the overall accounting cycle in the Local Government Unit. Transactions shall emanate from the different
offices/departments of the local government units (LGUs). These offices/departments will provide/produce the source documents and other accounting forms leading to the perfection of the
transaction, whether it be budgetary, collections or disbursements. The source documents and accounting forms shall be the basis for the preparation of reports by the Office of the Treasurer.
The Office of the Accountant shall record the transactions to the registries or to the corresponding books of original entry. Posting to the books of final entry and preparation of the financial
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:
1)
2)
3)
4)
Appropriations, Allotments and Obligations

Collections and Deposits
Disbursements
a) By cash
b) By check
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 authorization made by ordinance, directing the payment of goods and services from local government funds under
specified conditions or for specific purposes.
GENERAL ACCOUNTING PLAN (MS Excel file)
The local sanggunian approves the annual budget thru the issuance of appropriation ordinance. On the first business day of the fiscal year, the entire annual budget of the local government
unit shall be recorded in the Registry of Appropriations, Allotments and Obligations (RAAO). The appropriations, in the amounts approved by the legislative body and confirmed 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 of calamities, as well as supplemental budget are similarly recorded in the RAAO. In case the LGU is operating
on a re-enacted budget, said re-enacted budget shall likewise be recorded in the registry. Once current budget is approved, the necessary adjustments shall be made in the registry.
Separate registries shall be maintained for the four classes of expenditures per responsibility center, to wit:
1.
2.
3.
4.
Registry
Registry
Registry
Registry
of
of
of
of
Appropriations,
Appropriations,
Appropriations,
Appropriations,
Allotments
Allotments
Allotments
Allotments
and
and
and
and
Obligations
Obligations
Obligations
Obligations
Capital Outlays (RAAOCO)

Maintenance and Other Operating Expenses (RAAOMO)
Personal Services (RAAOPS)
Financial Expenses (RAAOFE)
Sec. 08. Accounting for Allotments. Allotment is the authorization issued by the Local Chief 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 quarterly based 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 to be paid by the LGU for any lawful act made by an accountable officer for and in behalf of the local
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 with the supporting documents, to the Budget Officer.
The Budget Officer shall certify to the existence of appropriation that has been legally made for the purpose by signing the appropriate box in the ALOBS and assign the ALOBS number
thereto. The Accountant shall review the ALOBS and certify as to obligation of the allotment by signing the appropriate box in the ALOBS. He shall also fill up the Status of Obligation. The
Accountant shall record the amount of obligation in the RAAOs.
Sec. 10. Adjustment of Obligations. The Chief Accountant shall record paid disbursement vouchers in the Status of Obligation portion (Payments) of the ALOBS. Any balance appearing
in the ALOBS after full payment of obligations shall form part of unobligated allotment. The Chief Accountant shall adjust accordingly the amount of recorded obligations in the 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 for obligation.
Sec. 11. Accounting Procedures for Budgetary Accounts. Summarized hereunder is the process in accounting for budgetary accounts:
PROCESS
PERSON / UNIT
RESPONSIBLE
a)
Records in the appropriate RAAOs the

approved appropriation per Appropriation
Ordinance.
Office of the
Accountant
b) Forwards the advice of allotments to

the Office of the Accountant and returns
the work plan to the concerned
departments/ offices.
Office of the Budget

Officer
c)
Office of the
Accountant
Enters the allotments in the RAAOs.
d) Prepares ALOBS based on

disbursement vouchers/purchase
requests and/or supporting documents.
Signs the appropriate box for requesting
Heads of
departments/offices
PROCESS
PERSON / UNIT
RESPONSIBLE
office. Forwards the same to the Office of

the Budget Officer.
e) Certifies the ALOBS as to the
existence of appropriations based on the
appropriation ordinance. Assigns ALOBS
number and forwards the same to the
Office of the Accountant.
Budget Officer
f)
Certifies the ALOBS as to the
obligations of allotments. Records the
obligation in the appropriate column of
the RAAOs and in the Status of Obligation
portion (Obligation) of the ALOBS.
Chief Accountant
g) Records paid disbursement vouchers

in the Status of Obligation portion
(Payments) of the ALOBS. Any balance
appearing in the ALOBS after full payment
of obligations shall form part of
unobligated allotment. Adjust accordingly
the amount of recorded obligations in the
RAAOs.
Office of the
Accountant
h) At the end of each month, reconcile

records on allotments available for
obligation.
Budget Officer and

Chief Accountant
Sec. 12. Terminology and Classification. A common terminology and classification shall be used consistently throughout the budget, the accounts and the financial reports.
For this purpose, the following specific expenditures shall be recorded in the appropriate RAAOs:
a. RAAOCO
Investments outlay (e.g. stocks, bonds)

Land, Land Improvements and Leasehold Improvements outlay
Buildings and Other Structures outlay (e.g. school buildings, markets and slaughterhouses, hospital and health centers, etc.)
Public Infrastructures outlay (e.g. parks, plaza, monuments, bridges etc.)
Furniture and Fixtures outlay
Work Animals outlay
Breeding stocks
Machineries and Equipment outlay (e.g. dump trucks, construction equipment, industrial machineries, technical and scientific equipment, etc.)
Aircrafts, Trains and Motor Vehicles outlay (e.g. motorcycles, cars, vans, etc.)
Artesian Wells, Reservoirs, Pumping Stations and Conduits outlay
Books outlay
Ordnance outlay
IT Equipment and Software outlay
Other Property, Plant and Equipment outlay
Reforestation Projects
Arts, Archeological Specimen and Other Exhibits
b. RAAOPS
c. RAAOMO
Salaries and Wages (e.g. regular pay, part-time pay, overtime and night pay, holiday pay, etc.)
Allowances (e.g. PERA, hazard pay, RATA, etc.)
Benefits (e.g. bonus, cash gifts, productivity, pension, etc.)
Government Shares on Employees Contributions
Subsidies (e.g. Subsidy to LGUs, Subsidy to Other Funds, etc.)
Livestock (e.g. swine, hogs, chicken, goats, etc.)
Crops
Supplies (e.g. office, medical, dental and laboratories, spare parts, gasoline and oil, etc.)
Repairs and Maintenance
Printing and Binding
Travel
Consultancy
Light, Water and Gas
Communication (e.g. telephone, telegraph, internet, postage, etc.)
Auditing Services
Other Services (e.g. janitorial, security, hauling, etc.)
Extraordinary and Miscellaneous Expenses
All other expenditures in the Chart of Accounts for MOOE, except depreciation, obsolescence, bad debts, loss on sale of assets, loss of assets, discount on Real Property Tax
and Special Education Tax.
d. RAAOFE
C.
Bank Charges
Interest Expenses
Commitment Charges
Other Financial Charges (e.g. underwriting fees, guarantee fees)
Loan Amortization
INCOME/COLLECTIONS AND DEPOSITS
Sec. 13. Separation of Books and Depository Accounts. Local accountants and treasurers shall maintain separate books and depository accounts, respectively, for each fund in 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 depository accounts shall accrue exclusively thereto.
Sec. 15. Remittance of Government Monies to the Local Treasury. Officers of the local government authorized to receive and collect monies arising from taxes, revenue, or receipts
of any kind shall remit the full amount received and collected to the treasury of such local government unit which shall be credited to the particular account or accounts to which the monies
in question properly belong.
Sec. 16. Sources of Income of LGUs. The main sources of income of LGUs are as follows:
a.
b.
c.
Tax revenues, fees and charges

Share from Internal Revenue Collections
Share from National Wealth
The sources of income are further classified into general income accounts and specific income accounts.
Sec. 17. General Income Accounts. The following shall comprise the General Income Accounts applicable to LGUs:
a.
Subsidy from Other LGUs
b.
c.
d.
e.
f.
g.
h.
i.
j.
k.
l.
m.
Subsidy from Other Funds

Subsidy from Special Accounts
Sales Revenue
Dividend Income
Interest Income
Gain on Sale of Securities
Gain on Sale of Assets
Sale of Confiscated Goods and Properties
Foreign Exchange (FOREX) Gains
Miscellaneous Operating and Service Income
Fines and Penalties Government Services and Business Operations
Income from Grants and Donations
Sec. 18. Specific Income Accounts. The following major classification comprise the specific income accounts for LGUs:
1.
2.
3.
4.
Property Taxes
Taxes on Goods and Services
Other Taxes
Other Specific Income
Sec. 19. Methods of Accounting for Income. The following accounting methods shall be adopted in recording income:
a.
Accrual Method Accrual method of accounting shall be used to record Share from Internal Revenue Collections in the books of accounts. Upon receipt of the Notice of
Funding Check Issued from Department of Budget and Management (DBM), Share from Internal Revenue Collections shall be taken up as Due from NGAs and credited to
Share from Internal Revenue Collections. However, Cash in Bank shall be debited upon receipt of Bank Credit Advice as to receipt of the Share from Internal Revenue
Collections regardless of whether or not the Notice of Funding Check Issued has been received from DBM.
b.
Modified Accrual Modified accrual method of accounting shall be used for real property taxes. At the beginning of the year, Real Property Tax Receivable and Special
Education Tax Receivable shall be established. This is in view of the need to record in the books not mere income estimates from real property taxes but actual receivables
from said taxes. However, to avoid appropriating uncollected revenues which might result to huge cash overdraft, the same shall be credited to Deferred Real Property
Taxes Income/Deferred Special Education Tax Income. Real Property Tax Income/Special Education Tax 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. Real Property Tax Receivables/Special Education Tax Receivables shall be established at the beginning of the
year based on Real Property Tax Account Register/Taxpayers index card. At the beginning of the year, the Treasurer shall furnish the Chief Accountant of a duly certified list showing the name
of taxpayers and the amount due and collectible for the year. Based on the list, the Chief Accountant shall draw a Journal Entry Voucher (JEV) to record the debit to Real Property Tax
Receivable/Special Education Tax Receivable and crediting to Deferred Real Property Tax Income/Deferred Special Education Tax Income.
Upon collection of Real Property Taxes from taxpayers, the account Deferred Real Property Tax Income/Deferred Special Education Tax Income shall be debited while the Real Property Tax
Income due to the municipality is recognized/credited. The share of the Province and Barangay shall also be credited to Due to LGUs.
Every end of the week, thereafter the Municipal Accountant shall furnish the Provincial Accountant 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 the Provincial Accountant to draw the JEV taking up the RPT Income. The account Due from LGU shall be
debited and Real Property Tax Income credited.
At the end of the month, the Municipal Accountant shall likewise prepare the Abstract of Real Property Tax to facilitate the distribution of real property tax collection. A copy of the abstract
shall be furnished the Provincial Accountant, for purposes of reconciliation with the weekly summary of JEVs.
Sec. 21. Delinquencies for Real Property Tax/Special Education Tax Prior to CY 2002. Payment of delinquencies for real property taxes/special education taxes prior to CY 2002
shall be recognized as a direct credit to Real Property Tax Income/Special Education Tax Income account.
Sec. 22. Discount on Real Property Tax/Special Education Tax. Discounts for advance and prompt payment of Real Property Tax and the additional one percent (1%) tax accruing to
the Special Education Fun shall be recognized in the year the taxes are due. Said discounts shall be apportioned to the concerned LGUs in accordance with the sharing prescribed for real
property tax and additional one percent (1%) tax under the Local Government 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 it was collected.
Fines and Penalties arising from real property taxes shall be distributed to concerned LGUs in accordance with the sharing prescribed under the Local Government Code for Real Property 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 be comprised of, but not limited to, the following:
a.
b.
c.
d.
Borrowings
Sale of Property, Plant and Equipment
Refund of Cash Advances
Receipt of Performance/Bidders Bonds
Sec. 25. Borrowings. Borrowings are proceeds of repayable obligations, generally with interest from the bank, national agency, another local government unit, and private sector. All
borrowings incurred shall be recorded direct to the appropriate liability accounts. Upon receipt of 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 and equipment refers to the proceeds from the sale of land, buildings, equipment, furniture and other similar
property which are recorded in the books as Property, Plant and Equipment. The appropriate Property, Plant and Equipment account shall be credited upon transfer of ownership.
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 to the
receivable account previously set up. Cash advances for salaries and wages shall be recorded as debits to the account Cash Disbursing Officer. Any refund made shall be credited to this
account.
Sec. 28. Receipt of Performance Bonds. Performance bond posted by contractor or supplier 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 acknowledged by the issuance of official receipt and recorded in the books by the Accountant drawing a JEV for
the purpose. In case of surety bond, an acknowledgment receipt shall be issued by the authorized official.
Sec. 29. Reporting for Collections and Deposits. Collectors/tellers shall issue a receipt to acknowledge collections made. The receipt maybe in the form of pre-numbered Official
Receipts, or cash tickets and the like. At the close of each business day, these collectors/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 be submitted to the treasurer/cashier to whom the cash collected shall be turned over. The fourth copy of the RCD
shall be retained by the collector/teller concerned. Barangay Treasurers deputized to collect taxes imposed by provinces, cities and municipalities shall follow the same procedures 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 of assignment to the Treasurers Office is more than one day, turnover of collections shall be made
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/Cashier shall verify the Report of Collections and Deposits; check the statement of accountable forms as to
initial balances on hand, receipts, issues and the ending balances on hand; make a physical count of the accountable forms remaining in the custody of the collector/teller and check the same
against the new balances on hand column. He shall indicate his verification by affixing his signature at the back of the triplicate copy of the last official receipt issued. He shall count the
money turned over to him and sign the certification and receipt portion of all copies of RCD.
Sec. 31. Designation of Liquidating Officers. The Treasurer may designate liquidating officers from among the collectors/tellers whenever necessary.
a.
Collectors/tellers shall turn over their collections to their designated liquidating officer. The RCD shall however be
prepared in five copies, four copies to be submitted to the liquidating officer, the fifth copy to be retained by the collector/teller.
b.
The liquidating officer shall perform the procedures for the receipt and verification of collections turned over to
him. He shall also accomplish the RCD 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 of collectors/tellers and the duplicates of the official receipts issued. The Treasurer/Cashier shall acknowledge receipt of the cash and all
accompanying documents by signing all copies of the RCD of liquidating officer on the certification and receipt portion of the form. The fourth copy of the RCD of the liquidating
officer and RCDs of collectors/tellers shall be retained by the liquidating officer.
10
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 the authorized
depository bank daily or not later than the next banking day. He shall record all deposits 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) days from
receipt thereof.
Sec. 33. Deposit of Field Collections. Collections by field collectors shall be remitted to the Cashier or designated liquidating officer of the field office of the LGU. When travel distance
of the field office to the local treasury may expose government funds to the risk of loss while in transit, the Cashier or designated liquidating officer, upon authorization by the Treasurer, may
deposit the collections in the authorized depository bank near the field office of the LGU. The procedures in reporting collections and deposits prescribed in this Chapter shall be observed.
Sec. 34. Accounting for Collections and Deposits. The Accountant shall determine the account classification of the collections covered by the RCD and the supporting papers
submitted by the Treasurer/Cashier and shall accomplish the Journal Entry Voucher. The accountant shall also maintain the Abstract of Real Property Tax Collections to facilitate the
distribution and remittance of the shares of the different government units concerned in the real property tax collections.
Sec. 35. Receipts and Collection Process. The following is a summary of the receipt and collection process in the LGU:
PROCESS
PERSON / UNIT
RESPONSIBLE
Receive payment from taxpayers/ creditors

and issue Official Receipt (OR). Prepare
Report of Collections and Deposits. Remit to
the Liquidating Officer (if one is designated)
or Treasurer.
Collector/Teller
Check remittances and verifies accountable

forms of collectors/tellers. Consolidates
collections and remits to the
Treasurer/Cashier. Prepares RCD.
Liquidating Officer
Receive remitted collections, consolidates the

same and prepares RCD. Records in the
Cashbook Cash in Treasury.
Treasurer
Deposit collections in the appropriate bank

account per authorized depository bank.
Records deposit in the Cashbook Cash in
Bank.
Treasurer
Forward RCD to Accounting Unit with copies of

ORs and validated deposit slips.
Treasurer
Prepare Journal of Entry Voucher and record 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 Title
Acct
.
Cod
e
Debit
Credi
t
INCOME
11
Particulars
Account Title
Acct
.
Cod
e
Debit
Credi
t
1. Real Property Tax Basic

A. Books of the
Municipality
a. Setting-up of RPT
Receivable
RPT = P1,000
RPT Sharing: Municipal
- 40%
Province - 35%
Barangay - 25%
Real Property Tax

Receivable
Deferred Real
Property Tax Income
b. Receipt of
Payment
Cash in Treasury
Real Property Tax
Receivable
c. Distribution of
Collection
RPT Sharing:
Municipal - 40%
Province - 35%
Barangay - 25%
Deferred Real
Property Tax Income
Real Property Tax
Due to LGUs
448
711
431
100
d. Deposit of
Collections
Cash in Bank LCCA

Cash in Treasury
110
101
100
e. Remittance of Share
(Province)
Due to LGUs
Cash in Bank LCCA
431
110
35
f. Remittance of Share
(Barangay)
Due to LGUs
Cash in Bank LCCA
431
110
25
a. Upon receipt of the

Summary of the JEV
from the Municipal
Accountant
Due from LGUs

Real Property Tax
131
711
35
b. Upon receipt of
share
Cash in Bank LCCA

Due from LGUs
110
131
35
101
100
B.
124
1,000
448
101
1,000
100
124
100
40
60
100
35
25
Books of the
Province
35
35
2. Operating and Service Income

a. Receipt of Income
Cash in Treasury
12
Particulars
Account Title
Receipts from
Markets
Garbage Fees
b. Deposit of
Collections
Cash in Bank LCCA

Cash in Treasury
Acct
.
Cod
e
783
772
Debit
Credi
t
90
10
110
101
100
1,000
100
3. Share from Internal Revenue Collections

a. Receipt of Notice of
Funding Check Issued
from the DBM and
credit memo from
the bank for Share
from Internal Revenue
Collections
Cash in Bank LCCA

Share from Internal
Revenue Collections
110
b. Receipt of Notice of
Funding Check Issued
from the DBM for
Share from Internal
Revenue Collections
Due from NGAs

Share from Internal
Revenue Collections
130
746
1,000
1,000
746
1,000
4. Grants and Donations

a. Receipt of grants
and donations in cash
(Donations in kind shall
be booked-up using the
appropriate asset
account)
Cash in Treasury
Income from Grants
and Donations
101
100
b. Receipt of grants
and donations in kind Motor Vehicle:
Original Cost
P1,000
Less: Acc. Depn.
200
Book Value
P
800
Motor Vehicles
Invested Equity
218
537
800
(At the end of Year)

Invested Equity
537
800
Government Equity
501
Cash in Bank LCCA

Loans Payable
Current, Domestic
110
651
100
800
800
5. BORROWINGS
a. Receipt of borrowed
funds from bank -
403
1,000
1,000
13
Acct
.
Cod
e
951
952
110
Particulars
Account Title
Debit
Principal P1,000
Bank Charges 10
Interest Expense12
Bank Charges
Interest Expenses
Cash in Bank LCCA
b. Receipt of borrowed
funds from other
agency Principal P1,000
Interest Expense 6
Cash in Treasury
Loans Payable
Current, domestic
Interest Expenses
101
1,000
403
952
Cash in Bank LCCA
110
c. Payment of loan
amortization
Loans Payable
Current, Domestic
Cash in Bank - LCCA
403
110
Credi
t
10
12
22
1,000
6
200
200
6. SUBSIDIES
a. Subsidy from Other Funds (General Fund to Special Education
Fund)
GENERAL FUND BOOKS
Transfer of subsidy
to Special Education
Fund (Aid to SEF to
finance its projects)
Subsidy to Other
Funds
Cash in Bank LCCA
897
110
500
101
500
500
SPECIAL EDUCATION FUND BOOKS

Receipt of subsidy
funds from Other funds
Cash in Treasury
Subsidy from Other
Funds
605
500
b. Special Accounts (subsidy from General Fund proper to

Operation of Public Market)
BOOKS OF GENERAL FUND PROPER
Transfer of subsidy to
Special Account
Subsidy to Special
Accounts
898
500
14
Particulars
Account Title
Cash in Bank LCCA
Acct
.
Cod
e
110
Debit
Credi
t
500
BOOKS OF SPECIAL ACCOUNT (OPERATION OF PUBLIC MARKET)

Receipt of subsidy
from
General Fund Proper
Cash in Bank LCCA

Subsidy from Special
110
Accounts
606
500
500
7. REFUND OF CASH ADVANCES

a. Cash Advance by an Officer for Local Travel
a. To take up the cash
advance
Due from Officers &

Employees
Cash in Bank LCCA
b. To take up refund of
cash advance
Cash in Treasury
Due from Officers &
Employees
128
110
10
101
10
128
10
10
b. Cash Advance by a Disbursing Officer for Salaries and Wages

a. To take up the cash
advance
b. To take up refund of
cash advance
Cash Disbursing
Officers
Cash in Bank LCCA
Cash in Treasury
Cash Disbursing
Officers
107
110
10
101
10
10
107
10
8. RECEIPT OF CASH BONDS

a. To take up receipt of
performance bond in
cash
Cash in Treasury
Performance/
Bidders/ Bail Bonds
Payable
101
50
b. To take up deposit of
performance bond
Cash in Bank LCCA

Cash in Treasury
110
101
50
c. To take up refund of
performance bond
Performance/
Bidders/ Bail Bonds
Payable
Cash in Bank LCCA
414
50
414
110
50
50
50
15
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.
2.
3.
4.
Personal Services
Maintenance and Other Operating Expenses
Capital Outlay
Financial Expenses
Disbursements shall be covered by Disbursement Vouchers (DV) or payrolls and paid either by check or in cash. The Allotment and Obligation Slip (ALOBS) shall be an integral part of
the DV.
Sec. 38. Certification on Disbursements. Disbursements from the general fund shall require the following certifications on the DV:
1.
Certification and approval of vouchers and payrolls as to validity, propriety and legality of the claim (Box A of DV) by the head of the department or office who has administrative
control of the fund concerned. In case of temporary absence or incapacity of the department head or chief of office, the officer next-in-rank shall automatically perform his function
and shall be fully responsible therefor.
2.
Necessary documents supporting the disbursement vouchers and payrolls as 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 Chief Executive (LCE) himself shall be required whenever local funds are disbursed, except for regularly
recurring administrative expenses such as: payrolls for regular or permanent employees, expenses for light, water, telephone and telegraph services, remittances to government creditor
agencies such as GSIS, BIR, PHILHEALTH, LBP, DBP, NPO, PS of the DBM and others, where the authority to approve may be delegated. Disbursement vouchers for expenditures appropriated
for the operation of the Sanggunian shall be approved by the provincial Vice Governor, the city Vice Mayor or the municipal Vice Mayor, as the case may be.
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, these duties 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. In case, however, of expenditures appropriated for the operation of the Sanggunian, checks drawn shall be countersigned
by the provincial Vice Governor, the city Vice Mayor, or the municipal Vice Mayor, as the case may be.
Sec. 41. Recording Check Disbursements in the Cashbooks. All checks issued including 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 payee or his duly authorized representative. For purposes of releasing checks, the Treasurer shall maintain
a Check Register where all checks issued shall be recorded chronologically and where the claimants shall be required to acknowledge receipt thereof.
Sec. 43. Reporting of Checks Issued. The checks released to claimants shall be reported in the Report of Checks Issued (RCI) which shall be prepared daily by the Treasurer for 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 Disbursements Journal.
Sec. 44. Check Disbursement Process. The steps in disbursements through issuance of check is shown below:
PROCESS
PERSON / UNIT
RESPONSIBLE
a. Gather supporting documents, and

approved ALOBS, prepare DV and
forward to Head of Department.
b.
Sign Box A of DV and submit

to the Accounting Unit.
Concerned Office
Supervisor/Head of
Department
16
PROCESS
PERSON / UNIT
RESPONSIBLE
c.
Check completeness of
documents, assign number to
DV, sign Box B and forward to
Treasurer.
Accounting Unit
d.
Verify claim, certify cash

availability (Box C) and
forward to approving officer.
Treasurer
Note: If funds are not available,

return to Accountant for
recording in the books as
Accounts Payable (AP). For AP,
JEV shall be prepared by
Accounting Unit and JEV
number reflected in the DV.
JEV for AP is recorded in
General Journal. Accountant
retains copy of DV and
forwards to Treasurer.
e.
Approve transaction (Box D)

and forward DV to Cashier.
Local Chief Executive

or authorized
approving officer
f.
Prepare, sign check and

forward check with DV to
countersigning officer.
Treasurer
g.
Countersign check and

forward to Accountant for
preparation of the
Accountants Advice of Local
Check Disbursements.
Administrator/ ViceMayor
for the Local
Sanggunian
Disbursements
h.
Prepare Accountants Advice of

Local Check Disbursements
and submit to bank. Return
DV, check and supporting
documents to
Cashier/Treasurer.
Accountant
i.
Record check in the Check

Register and release check to
claimant. Record
disbursement in Cashbook
Cash in Bank. Prepare Report
of Checks Issued. Forward RCI
with DV and supporting
documents to Accounting Unit.
Treasurer
j.
Prepare the JEV based on
Accounting Unit
17
PROCESS
PERSON / UNIT
RESPONSIBLE
individual checks/voucher;
sign Prepared By portion
(approved by Chief
Accountant), and record JEV in
the Check Disbursements
Journal. Post monthly to the
General Ledger/Subsidiary
Ledgers.
k.
Forward RCI, DV, supporting

documents and JEV to the
Office of the Auditor.
Accountant
Sec. 45. Payments in Cash. Disbursements by cash shall be made from a cash advance drawn and maintained in accordance with COA rules and regulations. Cash payments shall be
made only on duly approved payrolls/disbursement vouchers. Cash advances, by regular and special disbursing officers shall be recorded through a debit to Cash Disbursing Officers and a
credit to Cash in Bank Local Currency, Current Account (LCCA).
Sec. 46. Reporting of Cash Disbursements. To account for cash disbursements, from regular and special cash advances, the Accountable/Disbursing Officer shall prepare the Report of
Disbursements and submit the original and duplicate copy with vouchers/payrolls/petty cash vouchers to the Accountant. He shall ensure that receipt of the report 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 Cash Disbursements Journal.
Sec. 47. Cash Advances for Travel. Cash advances for travel shall be recorded as debit to the account Due from Officers and Employees and a credit to Cash in Bank Local Currency,
Current Account.
For liquidation of travel where the amount of cash advance is equal to or more than the travel expenses incurred, the Liquidation Report form shall be prepared by the officers/employees
concerned and submitted to the accounting unit as basis for preparation of the JEV to record liquidation. In case the amount of cash advance is less than the travel expenses incurred, a
Disbursement Voucher shall be prepared to liquidate the previous cash advance 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 maintained under the imprest system. The fund shall be sufficient for the non-recurring, emergency and petty
expenses of the LGU for one month. Disbursements from the fund shall be through the Petty Cash Voucher (PCV) which shall be signed by the payee to acknowledge the amount received.
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 prepared for 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 by official 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 fund during the year duly supported by a list/summary of PCVs, the PCVs and its supporting documents.
ALOBS shall be prepared for each replenishment and recorded in the RAAO based on actual expenses incurred.
At the end of the year, the petty cash fund shall be fully liquidated by preparing a Report of Disbursement supported by the list/summary of PCVs, the PCVs and its supporting documents.
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 shall issue an Official Receipt to acknowledge the amount returned. A new Cash Advance for Petty Cash Fund shall be
set up in the ensuing year.
Sec. 49. Cash Disbursement Process. Disbursement process for payment of salaries and wages out of cash advances is as follows:
PROCESS
a)
Processing of Payrolls to be paid by

cash is the same as that of steps
(a) to (e) for check disbursements.
PERSON / UNIT
RESPONSIBLE
Concerned offices
18
PROCESS
PERSON / UNIT
RESPONSIBLE
b)
Gather duly certified and approved

payrolls to be paid out of cash
advance. Prepare DV for cash
advance corresponding to the net
amount of payroll/s. Sign Box A of
DV and submit to the Accounting
Unit.
Office of the
Treasurer
c)
Check completeness of
documents/ previous cash advance
liquidated, assign number to DV,
sign Box B and forward to
Approving Officer.
Accounting Unit
d)
Approves DV and forward to

Treasurer for preparation of
checks.
e)
Prepare and sign check, and

forward check with DV to
countersigning officer.
Treasurer
f)
Countersign check and forward to

Accountant for preparation of
Advice.
Administrator
g)

Local Check Disbursements and
return DV, check and supporting
documents to Cashier/Treasurer.
Accountant
h)
Encash check and pay claimants.

Record disbursement in Cashbook
Cash Advances.
Treasurer/ Disbursing
Officer
i)
Return unused cash to the

Treasurer/ Cashier. An official
receipt (OR) shall be issued by the
Treasurer/Cashier to acknowledge
the return of unused cash and
indicate check no. of cash advance
granted on the face of OR. Record
the refund as credit to cash
advance and attach OR to the
Cashbook Cash Advances.
Disbursing Officer
j)
Prepare Report of Disbursement,

attach paid payrolls/ supporting
documents and copy of OR for
unused cash advance returned to
Disbursing Officer
19
PROCESS
PERSON / UNIT
RESPONSIBLE
Treasurer/Cashier. Sign "Certified

Correct portion of Report of
Disbursement and submit to
Accounting Unit.
k)
Prepare JEV to record the

liquidation of cash advance.
Record JEV in the Cash
Disbursements Journal (CDJ). Post
monthly to the General Ledger/
Subsidiary Ledger.
Accountant
l)
Forward Report of Disbursement

and supporting documents
including JEV to the 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, motor vehicles,
books, machineries, ordnance, etc. and public infrastructure. These are charged against appropriations/allotments for capital outlay when obligated.
Property, plant and equipment acquired through purchase shall include all costs incurred to bring it to the location necessary for its intended use, like transportation, freight, installation costs,
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 and public infrastructures. Agency assets are those to be used by the LGU concerned, like buildings,
while public infrastructures are those to be used by the general public. The construction period theory shall be used in recording both types of assets. This means that expenses such as
license fees and bonus paid to contractor for completing the work ahead of schedule, 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 be deducted from the total cost.
During the construction period, agency assets and public infrastructures shall be taken up in the books as "Construction in Progress with the appropriate asset classification. As soon as the
project is completed, the Construction in Progress for agency asset is closed to the appropriate asset account.
For public infrastructures funded out of regular income, the Construction in Progress account is transferred to the Public Infrastructures account upon completion. At the end of the year, the
latter account is closed to the Government Equity and the asset is recorded in the Registry of Public Infrastructures (RPI). However, completed public infrastructures funded out of 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 Notes to Financial
Statements.
Sec. 51. Purchase of Supplies. Purchase of supplies and materials for stock regardless of whether or not they are consumed within the accounting period shall be recorded as assets
using the Inventory account following the Perpetual Inventory Method (refer to Chapter 7 Supplies or Property). However, supplies and materials purchased out of the Petty Cash Fund for
immediate use or for emergency shall be taken up as expenses.
Sec. 52. Pro-forma Accounting Entries. Pro-forma accounting entries for disbursement transactions are shown below:
Particulars
1.
Account Title
Acct
.
Cod
e
Debit
Credit
Payment through Cash Advances
a. Cash advance for personal services
20
Particulars
Account Title
Acct
.
Cod
e
Debit
Credit
Enter obligation in RAAOPS for P18,000 Salaries and Wages, P5,000

Additional Compensation, and P3,000 Personnel Economic Relief Allowance
(PERA).
1. Grant of cash
advance for payroll
Cash Disbursing
Officers
Cash in Bank LCCA
2. Liquidation of cash
advance for payroll
Salaries and Wages

Regular Pay
PERA
Additional
Compensation
Withholding Taxes
Payable
GSIS Payable
PAG-IBIG Payable
Cash Disbursing
Officers
107
110
21,000
801
804
18,000
3,000
805
5,000
21,000
410
411
412
2,000
1,500
1,500
107
21,000
Enter obligation in RAAOPS for P1,500 Life and Retirement Insurance

Contributions and P1,500 PAG-IBIG Contributions.
3. Government share
for life and retirement
insurance and PAGIBIG Contributions
Life and Retirement

Insurance
Contributions
PAG-IBIG
Contributions
GSIS Payable
PAG-IBIG Payable
817
1,500
818
411
412
1,500
1,500
1,500
b. Petty Cash Fund

For establishment of fund, Enter obligation in RAAOMO as Other Expenses
for P6,000
1. Release of cash
advance for petty cash
fund miscellaneous
expenses
Petty Cash Fund

Cash in Bank LCCA
105
110
6,000
6,000
Enter obligation in RAAOMO for Office Supplies P2,500, Travelling Expenses

P500, Office Equipment Maintenance P1,000 and Other Expenses of P800.
2. Replenishment of
petty cash fund during
Traveling Expenses
Local
831
500
21
Particulars
the year
Account Title
Office Supplies
Expenses
Office Equipment
Maintenance
Other Expenses
Cash in Bank LCCA
Acct
.
Cod
e
Debit
849
2,500
882
950
110
1,000
800
Credit
4,800
Enter obligation in RAAOMO for Office Supplies P4,000 and Traveling

Expenses of P1,000.
3. Liquidation at year
end
Traveling Expenses
Local
Office Supplies
Expenses
Petty Cash Fund
831
1,000
849
105
4,000
5,000
Cancel RAAOMO for setting up of petty cash fund at the start of the year
and refund for a total of P6,000.
4. Return of unused
Petty Cash Fund.
Cash in Treasury
Petty Cash Fund
101
105
1,000
128
110
1,000
831
900
1,000
c. Cash advance for travel

Enter obligation in RAAOMO for Travel of P1,000
1. Grant of cash
advance
advance during the
current year
(assuming only P900
was utilized and P100
was refunded)
Due from Officers

and Employees
Cash in Bank LCCA
Traveling Expenses
Local
Due from Officers
and Employees
1,000
128
900
Adjust RAAOMO for refund of cash advance of P100

3. For amount
refunded where official
receipt was issued
Cash in Bank LCCA

Due from Officers
and Employees
110
128
100
100
2. Payment by Check
22
Particulars
Account Title
Acct
.
Cod
e
Debit
Credit
a. Maintenance and Other Operating Expenses

Enter obligation in RAAOMO for rent P3,000
1. Payment of rent
Rent Expense
Cash in Bank LCCA
841
110
3,000
3,000
Enter obligation in RAAOMO for electricity of P1,500 and telephone/internet

of P2,000
2. Payment of utilities
(MERALCO and PLDT)
Electricity
Telephone/Telegraph
and Internet
Cash in Bank LCCA
835
1,500
837
110
2,000
3,500
Enter obligation in RAAOMO for training and seminar expenses of P1,000

3. Payment of
seminar fee
Training and
Seminar Expenses
Cash in Bank LCCA
833
110
1,000
1,000
b. Financial Expenses
Enter obligation in RAAOFE for bank charges of P300
1. Bank charges upon
receipt of bank
statement
Bank Charges
Cash in Bank LCCA
951
110
300
300
Enter obligation in RAAOFE for interest expense of P400

2. Interest Expense
Interest Expenses
Cash in Bank LCCA
952
110
400
400
c. Office Equipment Enter obligation in RAAOCO for P6,000 for purchase

of equipment
1. Issuance of PO to
dealer
2. Receipt of office
equipment
No entry
Office Equipment
Cash in Bank LCCA
222
110
6,000
6,000
23
Particulars
Account Title
Acct
.
Cod
e
Debit
Credit
d. Construction of Roads by Contract Enter obligation in RAAOCO for

P800,000 for construction of road.
1. Payment of first
Construction in
billing for 50%
Progress Roads,
accomplishment
Highways and
Bridges
232
400,00
0
Withholding Taxes
Payable
410
40,000
Cash in Bank LCCA
110
360,000
2. Payment of second
billing 100%
accomplishment
3. Remittance of
taxes withheld
Construction in
Progress Roads,
Highways and
Bridges
232
Withholding Taxes
Payable
Cash in Bank LCCA
410
110
Withholding Taxes
Payable
Cash in Bank LCCA
410
110
80,000
Public Infrastructure
Construction in
Progress Roads,
Highways and
Bridges
243
800,00
0
Government Equity
Public
Infrastructures
501
243
400,00
0
40,000
360,000
80,000
If funded from regular agency income

4. To take up roads
completed
5. To transfer
completed roads to
Registry of Public
Infra- structures at the
end of the year
232
800,000
800,00
0
800,000
Note: Using the JEV for the above transactions, the public infrastructures
shall
be recorded in the Registry of Public Infrastructures.
If funded from a
loan
6 To record completed
Public
Infrastructures
243
800,00
0
24
Particulars
roads
At year end,upon
full payment of laon
Account Title
Construction in
Progress Roads,
Highways and
Bridges
Government Equity
Public
Infrastructures
Acct
.
Cod
e
Debit
232
501
243
Credit
800,000
800,00
0
800,000
e. General Repair/Construction of Building by Administration

1. Approval of the
project P1M
No entry
Enter obligation in RAAOCO for P600,000 for construction materials

2. Issue PO for
building materials:
Lumber, nails, cement,
sand and gravel,
paints, etc. =
P600,000
No Entry
3. Payment for
construction materials
received
Construction
Materials Inventory
Withholding Taxes
Payable
Cash in Bank LCCA
4. Issuance of
materials P590,000
Construction in
Progress Agency
Assets
230
Construction
Materials Inventory
156
156
410
110
600,00
0
60,000
540,000
590,00
0
590,000
Enter obligation in RAAOCO for P380,000 for labor

5. Cash advance
granted to Disbursing
Officer for payroll
Cash Disbursing
Officers
Cash in Bank LCCA
107
110
350,00
0
6. Liquidation by
Disbursing Officer of
paid payroll
Construction in
Progress Agency
Assets
230
380,00
0
350,000
Withholding Taxes
25
Particulars
7. Remittance of
withholding tax
8. Accomplishment
Report approved by
the LCE
Account Title
Payable
Cash Disbursing
Officers
Acct
.
Cod
e
410
Debit
107
Withholding Taxes
Payable
Cash in Bank LCCA
410
Buildings
Construction in
Progress Agency
Assets
204
Credit
30,000
350,000
30,000
110
30,000
970,00
0
230
970,000
f. Acquisition of Land
Enter obligation in RAAOCO for P2million for purchase of land
1. Payment made for
land purchased
2. Remittance of
withholding tax
Land
Withholding Taxes
Payable
Cash in Bank LCCA
201
2M
410
110
Withholding taxes
Payable
410
Cash in Bank LCCA
110
200,000
1.8M
200,00
0
200,000
g. Land and Building

Enter obligation in RAAOCO for P600,000 for land and P400,000 for
building
1. Payment of the
land and building
(assessed value of
land is P600,000) for
P1,000,000
Land
Building
Withholding Taxes
Payable
Cash in Bank LCCA
2. Remittance of
withholding tax
Withholding Taxes
Payable
Cash in Bank LCCA
201
204
410
600,00
0
400,00
0
110
410
110
100,000
900,000
100,00
0
100,000
h. Purchase of Inventories
26
Particulars
Account Title
Acct
.
Cod
e
Debit
Credit
Enter obligation in RAAOMO for purchase of P2,500 worth of spare arts

1. Payment of
delivered spare parts
Spare Parts
Inventory
Withholding Taxes
Payable
Cash in Bank LCCA
155
2,500
410
250
110
2,250
i. Enter obligation in RAAOMO for purchase of office supplies

1. Payment of office
supplies delivered
Office Supplies
Inventory
Withholding Taxes
Payable
Cash in Bank LCCA
149
3,000
410
110
300
2,700
j. Fund Transfers
Enter obligation in RAAOMO for subsidy to LGU XYZ
1. Cash assistance to
LGU XYZ
Subsidy to Local
Government Units
Cash in Bank LCCA
895
110
30,000
897
110
10,000
30,000
k. Enter obligation in RAAOMO for subsidy to SEF

1. Cash transfer to
SEF as subsidy
Subsidy to Other
Funds
Cash in Bank LCCA
10,000
l. Enter obligation in RAAOMO for grants and donation to Trust Fund

1. Cash transfer to
Trust Fund as
counterpart LGU
funds.
Grants and
Donations
Cash in Bank LCCA
889
110
500,00
0
500,000
E. MISCELLANEOUS TRANSACTIONS
Sec. 53. Miscellaneous Transactions. Miscellaneous transactions refer to transactions that are unique and not recurring in the ordinary course of operations of the government. 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 Accountability
27
2.
3.
4.
5.
6.
Cash Overage
Dishonored Check
Lost/Destroyed/Stale/Obsolete and Fraudulently Encashed Check
Settlement of Suspensions/Disallowances/Charges
Refund of Overpayments
Sec. 54. Loss of Cash and Property. Loss of cash and property may be due to malversation, theft, robbery or other causes.
Cash shortage discovered during cash examination conducted by auditors is reported through the Report of Cash Examination within ten (10) working days from the completion of
examination pursuant to COA Memorandum No. 84-373A. The auditor issues an audit report in case 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 of Entry Voucher to take up the shortage as a receivable from the accountable officer concerned.
In case of loss of property due to other causes (theft, force majeure, fire, etc.), a report thereon shall be prepared by the accountable officer concerned for purposes of requesting relief 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 shortages or loss of funds is granted, a copy of the decision shall be forwarded to the Chief Accountant who
shall draw a JEV to record the transaction. The loss shall be debited to the Loss of Assets account and credited to the appropriate receivable account. In case the request for relief is denied,
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 from accountability
is denied, the loss shall be taken up as a receivable from the accountable officer/persons liable and shall be credited to the appropriate asset account.
Sec. 56. Cash Overage. In case the cash examination disclosed cash overage, as determined by the auditor, the amount shall be forfeited in favor of the government and an official
receipt shall be issued by the collector/teller. The cash overage shall be taken up as Other Specific Income.
Sec. 57. Dishonored Checks. A check is said to be dishonored when upon its being duly 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, constructive cancellation of the official receipt covering the dishonored check shall be immediately effected by the
Treasurer on the copy in his possession. The Treasurer shall immediately photocopy the dishonored checks and record as credit in the CashbookCash in Bank and cancel payment in the
taxpayers index card. He shall also notify the collector/teller of the dishonor and the cancellation of the official receipt. The collector/teller shall note the cancellation in the triplicate copies of
the receipt. The Treasurer shall then inform the Auditor who shall effect the cancellation 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 checks to the Accountant. The Accountant shall cancel the official receipt if still in his possession. He shall
prepare the Journal of Entry Voucher (JEV) taking up the dishonored check by crediting the Cash in Bank account and debiting the appropriate income account. In case of dishonor of check
payments for Real Property Tax (RPT) or Special Education Tax (SET), the RPT/SET Receivables and corresponding Deferred RPT/SET Income shall be restored. The accounts Due to LGUs, RPT
Income, Cash in Bank and RPT Discount shall be adjusted accordingly. He shall furnish the Treasurer with a copy of the duly approved JEV. The Treasurer shall record the JEV number in the
Cashbook-Cash in Bank as reference in the entry effecting the cancellation 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 course or by
the custodian/carrier thereof and after diligent search cannot be found or located; or when 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 is lost, 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 cancel the payment made. Copy of the JEV shall be furnished the treasurer as basis for him to debit the
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 with erasures/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 as prescribed by the depository bank. At least one month before a check becomes stale, the Treasurer 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:
28
1.
For spoiled checks which are immediately cancelled and for which the Report of Checks Issued (RCI) has not yet been prepared, the cancelled check
shall be 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
be presented in the RCI after the last check issued for the period indicated in the report. The original DV and supporting documents shall be returned to the Accountant who shall
prepare a JEV to record the transaction as Accounts Payable.
3.
For checks which became spoiled or stale in the hands of the payee and which require replacement, a new check may be issued upon submission of
the spoiled or stale check to the Treasurer. A certified copy of the DV shall be requested from the Auditor for presentation to the Administrator/Local Chief Executive who shall
countersign the check. The cancelled check shall be reported and attached to the RCI prepared at the period of cancellation. The replacement check shall also be reported
chronologically in the RCI.
Sec. 60. Suspensions, Disallowances and Charges. Disallowances and charges shall 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 prior years
adjustment if pertaining to expenses of previous years.
Cash settlement of disallowances shall be recorded thru the JEV by debiting Cash in Treasury 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 accounting entries for miscellaneous transactions:
Particulars
Account Title
Acct
.
Cod
e
Debit
Credi
t
1. Cash Shortage
a. Cash shortage of the of the Disbursing Officer
To take up cash
shortage
Due from Officers

and Employees
Cash Disbursing
Officers
128
50
107
50
b. Cash Shortage of the Treasurer

To take up cash
shortage
Due from Officers

and Employees
Cash in Treasury
128
101
50
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
Cash Disbursing
Officers
To take up relief from

accountability
Loss of Assets
(current year) or
Prior Years
128
107
50
50
29
Particulars
Account Title
adjustments (prior
years)
Due from Officers
and Employees
Acct
.
Cod
e
948
Debit
50
128
Credi
t
50
3. Cash Settlement in case of denial of Request for Relief from

Accountability
To take up
payment/settlement
Cash in Treasury
Due from Officers
and Employees
101
Cash in Treasury
Other Specific
Income of LGU
101
50
128
50
4. Cash Overage
To take up cash
overage discovered
during cash
examination
50
792
50
5. Dishonored Checks
From payment of real property tax in the current year or prior year
Upon receipt of advice
of dishonored check
and cancellation of
Official Receipt
Receipt of
refund/settlement
Real Property Tax

Receivable
Deferred Real
Property Tax
Income
124
50
448
50
Due to LGUs
Real Property Tax
Income
Cash in Bank LCCA
431
30
711
110
20
Cash in Treasury
Real Property Tax
Receivable
101
50
50
124
50
6. Lost/Destroyed/Stale/Obsolete Checks
Check issued in the current/prior year for replacement
Check cancellation
Replacement
Cash in Bank LCCA

Accounts Payable
110
401
50
Accounts Payable
401
50
50
30
Particulars
Account Title
Cash in Bank LCCA
Acct
.
Cod
e
110
Debit
Credi
t
50
7. Disallowances and Charges

a.
Recording of disallowance for current years transaction
When the
disallowance becomes
final and executory
Overpayment of Office
Supplies
Amount paid - P100
Should be
90
Difference
10
Settlement of
Disallowance
Receivables
Disallowances/
Charges
Office Supplies
Expense
Cash in Treasury
Receivables
Disallowances/
Charges
138
10
849
101
10
10
138
10
b. Recording of disallowance for prior years transaction

When the
disallowance becomes
final and executor
Settlement of
disallowance
Receivables
Disallowances/
Charges
Prior Years
Adjustments
Cash in Treasury
Receivables
Disallowances/
Charges
138
10
533
101
10
10
138
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 of
Franchise Tax
Amount Paid - P 100
Should be
110
Receivables
Disallowances/
Charges
Franchise Tax
138
724
10
10
31
Particulars
Charge
Account Title
-
Acct
.
Cod
e
Debit
101
10
Credi
t
10
Settlement
Cash in Treasury
Receivables
Disallowances/
Charges
138
10
c.2 Recording of charges which collection were made in the prior year
When the charge
becomes final and
executory
Settlement
Receivables
Disallowances/
Charges
Prior Years
Adjustments
Cash in Treasury
Receivables
Disallowances/
Charges
138
10
533
101
10
10
138
10
8. Refund of Overpayment
a. Overpayment taken up as receivable
To record overpayment
of salaries and wages
(When overpayment is
ascertained)
Due from Officers

and Employees
Salaries and Wages
Regular Pay
To record refund of
overpayment
Cash in Treasury
Due from Officers
and Employees
b.
128
10
801
101
10
10
128
10
Refund of overpayment not taken up as receivable
Refund of
overpayment of
Salaries and Wages
Regular Pay during the
current year
Cash in Treasury
Salaries and Wages
Regular Pay
101
To take up refund of
Cash in Treasury
101
10
801
10
10
32
Particulars
over payment in the
ensuing year
F.
Account Title
Prior Years
Adjustments
Acct
.
Cod
e
Debit
533
Credi
t
10
ADJUSTING AND CLOSING ENTRIES
Sec. 62. Adjusting Entries. Adjusting entries are accounting journal entries made in order to ensure that revenues and expenses are recorded in the period when they are earned or
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 and Expenses the net income/(loss) for the period.
Sec. 63. Types of Adjusting Entries. There are two types of adjusting entries:
a.
b.
Prepayments; and
Accruals
Sec. 64. Prepayments. Prepayments are expenses paid or revenues received before they 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 the revenue earned in the current accounting period. Sub-categories of prepayments are prepaid expenses and
unearned revenues.
Prepaid expenses are expenses paid in cash and recorded as assets before they are used or consumed. Prepaid expenses expire either with the passage of time (e.g. rent) or through use and
consumption (e.g. supplies). The adjusting entry for prepaid expenses is a debit 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, the entry is a debit to
depreciation expense and a credit to accumulated depreciation. The depreciable or estimated life for different types of agency assets are presented in Table 2 (Annex 7).
Unearned revenues are recorded as a liability when received and considered earned upon rendition of service (e.g. tuition fees) or the passage of time (e.g. advance payment of real property
taxes). The adjusting entry for unearned revenues is a debit to a liability account and a credit to revenue account.
Illustrative accounting entries:
Particulars
Account Title
1. Report of supplies
utilized for P2,000.
Office Supplies
Expense
Office Supplies
Inventory
2.
Application
of advance
RPT for
P2,500.
Deferred Credits to
Income
Real Property Tax
Acct
.
Cod
e
Debit
849
2,000
149
440
711
Credi
t
2,000
2,500
2,500
Sec. 65. Accruals. Accruals are revenues earned and expenses incurred in the current accounting period that have not yet been recorded. Adjusting entries for accruals are required to
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 an income account. Examples are interest, share from internal revenue collections covered by notice of
funding checks issued, etc.
33
Adjusting entry for accrued expenses is a debit to the appropriate expense account and a credit to a payable account. Examples are accrued salaries, bad debts, etc. For bad debts,
the entry is a debit to Bad Debts Expense and a credit to Allowance for Doubtful Accounts.
Particulars
Account Title
1. Receipt of the
Notice of Funding
Check Issued for the
December Share from
Internal Revenue
Collections for
P20,000.
Due from NGAs

Share from Internal
Revenue
Collections
2. Unpaid salaries
and wages of
employees, at end of
accounting period,
P50,000.
Salaries and Wages

Regular Pay
Due to Officers &
Employees
Acct
.
Cod
e
Debit
130
20,000
746
801
Credi
t
20,00
0
50,000
428
50,00
0
Sec. 66. Closing Journal Entries. Closing journal entries are the accounting entries prepared to reduce all balances of the nominal accounts to zero at the end of the accounting period in
order to prepare the accounts for the next accounting period. The procedure followed in the reduction of the balances is called the closing process. The closing process is as follows:
1.
2.
3.
4.
5.
6.
Debit all revenue accounts balances and credit the total to the Income and Expense Summary account.
Credit all expense accounts balances and cost of goods sold and debit the total to the Income and Expense Summary account.
Debit the credit balance of the Income and Expense Summary account and credit the amount in the Retained Operating Surplus account, in case of a net income.
Credit the debit balance of the Income and Expense Summary account and debit the amount in the Retained Operating Surplus account, in case of a net loss.
Debit all credit balances of the intermediate accounts and debit the total to the Government Equity account.
Credit all debit balances of the intermediate accounts and credit the total to the Government Equity account.
Particulars
Account Title
1. To close the
Revenue accounts to
the Income and
Expense Summary
account.
Real Property Tax

Share from Internal
Revenue Collections
Business Taxes &

Licenses
Registration Fees
Income and Expense
Summary
Acct
.
Cod
e
Debit
711
100
746
10,000
723
761
50
20
532
Credit
10,170
34
Particulars
Account Title
2.
To close the
Income and Expense
Summary to Retained
Operating Surplus
account.
Income and Expense

Summary
Retained Operating
Surplus
3.
Retained Operating
Surplus
Government Equity
To close the
Retained
Operating
Surplus to
Government
Equity
account.
Acct
.
Cod
e
Debit
532
5,670
534
534
501
Credit
5,670
5,670
5,670
Chapter 4. TRIAL BALANCE, FINANCIAL REPORTS

AND STATEMENTS
Sec. 67. Trial Balance. Trial balance is a list of all the general ledger accounts and their balances at a given time. The accounts are listed in the order in which they appear in the ledger,
with the debit balances in the left column and credit balances on the right column.
Sec. 68. Purpose of the Trial Balance. The trial balance is prepared:
a.
b.
c.
To prove the mathematical equality of the debits and credits after posting;
To uncover errors in journalizing and posting; and
As basis for the preparation of the financial statements.
Sec. 69. Procedures in the Preparation of the Trial Balance. The procedures in trial balance preparation shall be:
a.
b.
c.
List the account titles and their debit/credit balances based on the accounts and amount reflected in the general ledger;
Total the debit and credit columns; and
Prove the equality of the two columns.
Sec. 70. Pre-Closing Trial Balance. The pre-closing trial balance is the trial balance prepared from the general ledger accounts after the adjusting journal entries have been journalized
and posted. This is also termed as adjusted trial balance.
Monthly pre-closing trial balance for each fund shall be submitted not later than the twentieth day after the end of the month. It shall be supported by the Status of Appropriations,
Allotments and Obligations, for both the current and continuing appropriations.
These reports shall be submitted to the following:
COA Unit Auditor Original copy
Local Sanggunian
1 copy
Local Treasurer 1 copy
Local Accountant 1 copy
35
The trial balance at the end of the quarter shall also be supported by a schedule of subsidiary ledger balances of the controlling accounts in the General Ledger and an additional copy shall be
submitted to the COA Regional Office thru the Unit Auditor.
Sec. 71. Status of Appropriations, Allotments and Obligations. The status of appropriations, allotments and obligations is a schedule prepared showing the appropriation, allotments
and obligations of each function, program project and activity (See Annex 1). Separate schedules shall be prepared for current appropriation and for continuing appropriations using the
following column headings:
Function/Program/
Project/ Activity
Appropriation
s
Allotmen
t
Obligatio
n
Unobligat
ed
Balance
Sec. 72. Post-closing Trial Balance. Post-closing trial balance is the trial balance prepared at the end of the year after the closing entries are journalized and posted in the general
ledgers. In the Post-closing Trial Balance, all the nominal accounts (revenue, expense and intermediate) are closed and the real accounts (assets, liability and equity) are shown with balances.
It shall be submitted not later than the fourteenth day of February after the end of the calendar year with the following supporting schedules:
a.
b.
c.
Status of Appropriations, Allotments and Obligations;

Subsidiary Schedule of General Ledger account balances; and
Summary of Public Infrastructures (Annex 8).
The post-closing trial balance with supporting schedules shall be distributed as follows:
COA Central Office thru the Unit Auditor
COA Regional Office
COA Unit Auditor
Local Sanggunian
Local Treasurer
Local Accountant
1 copy
1 copy
1 copy
1 copy
1 copy
1 copy
1 copy
Sec. 73. Interim Reports. Interim reports are financial statements required to be prepared at any given period or at a financial reporting period shorter than a full financial year, without
closing the books of accounts. The following interim financial statements and the Notes to Financial Statements shall be prepared and submitted quarterly:
a.
b.
c.
Balance Sheet;
Statement of Income and Expenses; and
The interim reports shall be prepared employing the same accounting principles used for annual reports. Adjusting entries shall be prepared for the interim period.
To facilitate the preparation of the interim financial statements, the use of the worksheet is recommended.
Sec. 74. Worksheet. A worksheet is the accountants informal device for accumulating and sorting information needed for the financial statements. It is a columnar sheet of paper used to
adjust the account balances and prepare the financial statements.
The use of the worksheet facilitates the end-of-period accounting and reporting process. Also, it helps accountants prepare the financial statements on a more timely basis. The following
worksheet format shall be used:
Name of LGU
Worksheet
As of ____________, 20_____
Accounts
Trial
Balance
Adjustment
s
Adjusted
T/B
Statement
of Income
&
Expenses
Balance
Sheet
36
Title
1.
2.
3.
4.
5.
6.
Cod
e
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
Account title and code columns show the account titles/codes of the general ledger accounts.
Trial balance column reflects amounts obtained from the general ledger balances.
Adjustment columns are the adjustments effected for the prepayments and accruals.
Adjusted trial balance shows the balances of all the accounts after the adjustment at the end of the accounting period.
Statement of Income and Expenses shows all the debit and credit items in the adjusted trial balance for all the income and expense accounts. The difference between the income
and expenses shall be reflected as Net Income/Loss to be extended to the credit column of the Balance Sheet.
Balance Sheet show all the debit and credit items in the adjusted trial balance of all the asset, liability, equity and intermediate accounts affecting directly the Government Equity
account.
Sec. 75. Statement of Management Responsibility for Financial Statements. Statement of Management Responsibility for Financial Statements (Annex 2) shows the agencies
responsibility for the preparation and presentation of its financial statements. The statement shall be signed by the Chief Accountant and the Head of the Agency or his authorized
representative. It shall form an integral part of the financial statements, all of which shall be transmitted to the concerned agencies.
Sec. 76. Year-end Financial Statements. Local accountants shall prepare at the end of the year the following financial statements for each fund:
a.
b.
c.
Balance Sheet;
Statement of Income and Expenses; and
The Chief Accountant shall likewise prepare the consolidated financial statements for all funds and the Notes to the Financial Statements.
Sec. 77. Balance Sheet. The Balance Sheet (Annex 3) shows the financial condition of the agency at a specific date. It presents information on the assets, liability and the government
equity of the agency.
Sec. 78. Statement of Income and Expenses. The Statement of Income and Expenses (Annex 4) shows the income and expenses of the agency at the end of a particular period. It
presents the detailed information of the income and expenses recognized during the period covered.
Sec. 79. Statement of Cash Flows. The Statement of Cash Flows (Annex 5) shows the agencys cash activities. It reports cash receipts and cash payments and net change in cash
resulting from operating, investing and financing activities of an agency during a period, in a format that reconciles the beginning and ending cash balances.
Sec. 80. Notes to the Financial Statements. The Notes to the Financial Statements (Annex 6) are the accountants means of amplifying or explaining the items presented in the main
body of the statements. These are explanatory notes on the accounts and/or accounting policies which will give additional information value to the financial statements. In the Notes, the
accountant is expected to report the economic substance rather than the legal form of the transactions and to make adequate disclosure.
The Notes to Financial Statements include the following:
1.
Summary of significant accounting policies adopted and followed by the reporting entity;
2.
Narrative descriptions or detailed analyses of amounts shown on the face of the balance sheet, statement of income and expenses and statement of cash flows;
3.
Customary or routine disclosure which are information about measurement bases of important assets, restrictions on assets, contingent assets/liabilities, important long term
commitments not recognized in the body of the statements, etc.;
4.
Disclosures of changes in accounting principles- changes in accounting principles, practices or methods of applying them; and
5.
Disclosures of subsequent events disclosure of events that affect the agency directly and that occur between the date of, or end of the period covered by, the financial statements
and date of completion of the statements are necessary; if knowledge of the events might affect the interpretation of the statements, even though the events do not affect the
propriety of the financial statements themselves.
Chapter 5. SPECIAL FUNDS
37
A. ACCOUNTING FOR SPECIAL EDUCATION FUND

Sec. 81. Special Education Fund. The Special Education Fund (SEF) consist of the proceeds of one percent (1%) tax on the assessed value of real property in addition to the basic real
property tax, which a province or city, or a municipality within the Metropolitan Manila Area, may levy and collect.
Sec. 82. Application of Proceeds of the Additional One Percent (1%) Special Education Fund Tax. (a) The proceeds of the additional one percent (1%) real property tax accruing
to special education fund shall be automatically released to the local school boards.
(b) In case of provinces, the proceeds of the special education fund shall be divided equally between the provincial and municipal school boards.
(c) Said proceeds shall be allocated as determined and approved by the local school boards concerned only for the following purposes:
1. Operation and maintenance of public schools;
2. Construction and repair of school buildings, facilities and equipment;
3. Educational research;
4. Purchase of books and periodicals; and
5. Sports development.
(Article 363 of the IRR of the Local Government Code)
Sec. 83. Special Education Fund Budget. The Local School Board shall determine in accordance with the criteria set by DECS, the annual supplementary budgetary needs for the
operation and maintenance of public schools within the province, city, or municipality as the case maybe, and the supplementary local cost of meeting such needs, which shall be reflected in
the form of an annual school board budget corresponding to its share of the proceeds of the special levy on real property constituting the special education fund and such other sources of
revenue as the Local Government Code and other laws or ordinances may provide. (Article 184(b)(1) of the IRR of the Local Government Code)
The division superintendent, city superintendent, or district supervisor, as the case maybe, shall prepare the budget of the school board concerned. Such budget shall be supported
by programs, projects and activities of the school board for the ensuing fiscal year. A majority of all the members shall be necessary to approve the budget. (Article 184(f) of the IRR of the
Local Government Code)
The annual school board shall give priority to the following:
1.
2.
3.
Construction, repair and maintenance of school buildings and other facilities of public elementary and secondary schools;
Establishment and maintenance of extension classes when necessary; and
Holding of sports activities at the division, district, municipal, and barangay levels.
Sec. 84. Basis of Recording Special Education Tax Special Education Tax Receivables shall be established at the beginning of the year based on Real Property Tax Account
Register/Taxpayers index card. At the beginning of the year, the Treasurer shall furnish the Chief Accountant with a duly certified list of the name of taxpayers and the amount due and
collectible for the year. Based on the list, the Chief Accountant shall draw a Journal Entry Voucher (JEV) to record the Special Education Tax Receivables.
Sec. 85. Delinquencies for Special Education Tax prior to CY 2002. Payment of delinquencies for special education taxes prior to CY 2002 shall be recognized as a direct credit to
Special Education Tax Income account.
Sec. 86. Collection Procedures for the Special Education Tax. The additional one percent (1%) tax on real property shall be collected simultaneously with the basic real property tax.
A single official receipt shall be issued for both taxes, indicating therein the amount paid for the basic tax and the additional one percent tax. However, the collecting officer shall prepare
separate reports of collections for the two taxes. Further, the proceeds of the additional one per cent tax shall be deposited in a separate depository account.
Procedures for the turn over of collections, frequency of deposit of collection with the bank, preparation of report of collections, verification of collections and accountable forms,
preparation of report of accountability for accountable forms as well as consolidation of reports of accountable forms shall be the same as that prescribed for collections in the General Fund.
Sec. 87. Separate Cashbooks for Special Education Fund. The Treasurer and/or the concerned accountable officers shall maintain separate cashbooks for the SEF which shall be in
accordance with the prescribed format.
38
Sec. 88. Separate Registries, Books of Accounts, and Financial Reports for Special Education Fund. The Chief Accountant shall maintain separate registries for appropriation,
allotment and obligations and books of accounts for SEF. He shall likewise prepare separate financial reports such as the Trial Balance, Balance Sheet, Statement of Income and Expenses,
Statement of Cash Flows and supporting schedules, to be submitted within the prescribed timeframe.
For disbursements, separate set of JEVs shall also be prepared which shall be numbered in accordance with the prescribed codes.
Sec. 89. Preparation and Control of ALOBS for Special Education Fund. The Allotment and Obligation Slips (ALOBS) pertaining to the fund shall be prepared and signed by authorized
official of the requesting department or office. This shall be forwarded to the Budget Officer who, based on the approved school board budget, shall verify the existence of appropriation for
the proposed expenditure. He shall certify the ALOBS to that effect and number the same in accordance with the prescribed codes. This shall then be forwarded to the Chief Accountant who
shall certify as to obligations of allotments and shall record the same in the appropriate Registry of Appropriations, Allotments and Obligations (RAAO). The ALOBS shall form an integral part of
the disbursement voucher/payroll and the certifications of the local budget officer and the accountant thereon shall serve as their certification of the disbursement as required by law.
Sec. 90. Certification as to Cash Availability. The Treasurer shall certify as to cash availability for the fund in the Disbursement Voucher and Purchase Request. For infrastructure
projects undertaken by contract, the Treasurer shall also certify as to cash availability in the contract. This certification shall serve as the required certification under the law.
Sec. 91. Disbursement Procedures. Disbursement procedures including the reports to be submitted by the accountable officer concerned are the same as those for the General Fund.
However, disbursements shall be approved by the Local Chief Executive concerned as co-chairman of the local school board. The division/city superintendent of schools or the district
supervisor concerned, as the case maybe, shall certify vouchers or payrolls as to validity, propriety, and legality of the claim involved.
Sec. 92. Inventory Process. The perpetual inventory method and the moving average method shall likewise be adopted in the accounting and costing of inventory. The general
procedures, the forms and reports for the holding of inventory shall also be followed. However, separate perpetual inventory records and stock cards shall be maintained by the Accounting
Unit and the General Services Officer or the Treasurer, as the case maybe. Likewise, separate weekly Summary for Supplies and Materials Issued pertaining to the fund shall be prepared.
Sec. 93. Pro-forma Accounting Entries. Pro-forma accounting entries for the fund, follows:
SPECIAL EDUCATION FUND (SEF)
I.
Particulars
1. Set-up Special
education Tax
Receivable
Total Receivables
Account Title
Acct
.
Cod
e
Special Education
Tax Receivable
125
Deferred Special
Education Tax
Income
449
Debit
Credit
500,00
0
500,00
0
P500,000
Provincial Share
P250,000
2. Collection of
Special
Education Tax
P200,000.
Cash in Treasury
Special Education
Tax Receivable
101
Computation of
Shares of LGUs in RPT
50% of
Deferred Special
Education Tax
Income
449
P200,000 for Provincial
Special Education
Tax
713
200,00
0
125
200,00
0
200,00
0
100,00
0
39
I. Particulars
Share
Account Title
Due to LGUs
Acct
.
Cod
e
431
3. Deposit of
collections with
authorized depository
bank
Cash in Bank LCCA

Cash in Treasury
110
101
200,00
0
4. Remittance of share
to Province ( Special
Due to LGUs
(Province)
431
100,00
0
Cash in Bank LCCA
110
Education Tax)
P100,000
5. Receipt of allotment
for Allotment Class:
Personal Services P50,000
MOOE
20,000
Capital Outlay
30,000
Total P100,000
Debit
Credit
100,00
0
200,00
0
100,00
0
Memo entry in
Registry of
Appropriations ,
Allotments and
Obligations
(Personal
Services (RAAOPS,
MOOE RAAOMO,
Capital Outlay
RAAOCO)
6. Obligation for PS
Salaries of teachers for
extension class
P30,000
Memo entry in
RAAOPS
7. Grant of cash
advance for payroll
Cash Disbursing
Officers
Cash in Bank LCCA
8. Payment of Salaries
Salaries per Payroll
P 30,000
Less: Deductions
(Personal Share)
Life & Ret. P 2,850
Pag-ibig
600
Salaries and Wages

Regular Pay
Cash Disbursing
Officers
Withholding Taxes
Payable
107
110
25,000
801
30,000
25,000
107
25,000
410
1,050
40
Particulars
PhilHealth
500
W/holding Tax 1,050
5,000
Net Pay per Payroll
P25,000
Account Title
GSIS Payable
PAG-IBIG Payable
Acct
.
Cod
e
411
412
PHILHEALTH
Payable
413
9. Remittance of salary
deductions
Withholding Taxes
Payable
GSIS Payable
PAG-IBIG Payable
PHILHEALTH Payable
I.
Cash in Bank LCCA

10. Obligation for
Government Share:
Life & Ret. Ins.
Contributions
P2,850
Pag-ibig
Contributions
600
PhilHealth
Contributions
500
Total
P3,950
Memo entry in
RAAOPS
11. Payment of
Government Share
Life & Retirement

Insurance
Contributions
PAG-IBIG
Contributions
PHILHEALTH
Contributions
Cash in Bank LCCA
12. Obligation of
Traveling Expenses
P500
Memo entry in
RAAOMO
13. Grant of cash

advance
Due from Officers &

Employees
Cash in Bank LCCA
Debit
Credit
2,850
600
500
410
411
412
1,050
2,850
600
413
110
500
817
2,850
818
500
819
110
600
128
110
500
5,000
3,950
500
41
I.
Particulars

advance
Account Title
Traveling Expenses
Local
Due from Officers &
Employees
Acct
.
Cod
e
Debit
831
480
128
15. Adjustment of
obligation of travel.
Memo entry in
RAAOMO
16. Refund of cash

advance
Cash in Treasury
Due from Officers &
Employees
101
17. Deposit of cash

refund
Cash in Bank LCCA
110
Cash in Treasury
101
18. Obligation of bill

received from MERALCO
Memo entry in
RAAOMO
19. Payment of
MERALCO bill P800
Electricity
Cash in Bank LCCA
20. Obligation for the

purchase of Office
Supplies P500
Memo entry in
RAAOMO
21. Payment of office

supplies
Office Supplies
Inventory
Withholding Taxes
Payable
Cash in Bank LCCA
22. Obligation of
Equipment per
Purchase Order
P30,000
Memo entry in
RAAOCO
23. Payment of
Office Equipment
480
20
128
20
20
20
835
110
800
149
500
800
410
110
222
Credit
20
480
30,000
42
Acct
.
Cod
e
I. Particulars
equipment with
Invoice/Delivery
Receipt
Account Title
Withholding Taxes
Payable
Cash in Bank LCCA
410
110
24. Receipt of fund

transfer from General
Fund thru bank
Cash in Bank LCCA

Subsidy from Other
Funds
110
Debit
Credit
3,000
27,000
5,000
605
5,000
Adjusting Entries:
1. Depreciation of
Equipment using the
Straight Line Method:
Equipment :
Life Amount
5 yrs. P6,000
DepreciationOffice
Equipment
Accumulated
Depreciation
Office
Equipment
922
6,000
322
6,000
Closing Entries :
1. Closing of Income
Accounts
2. Closing of Expense
Accounts
Special Education
Tax
Subsidy from Other
Funds
Income and Expense
Summary
Income and Expense
Summary
Salaries & Wages
Regular Pay
Life & Retirement
Insurance
Contributions
PAG-IBIG
Contributions
PHILHEALTH
Contributions
Traveling Expenses
Local
Electricity
DepreciationOffice
Equipment
713
100,0
00
605
5,000
532
532
105,000
41,23
0
801
30,000
817
2,850
818
600
819
500
831
835
480
800
922
6,000
43
I.
Particulars
Account Title
3. Closing of Income
and Expense Summary
4. Closing of Retained
Operating Surplus
Income and Expense

Summary
Retained Operating
Surplus
Acct
.
Cod
e
532
Debit
63,77
0
534
Retained Operating
Surplus
534
Government Equity
501
Credit
63,770
63,77
0
63,770
B. TRUST FUND
Sec. 94. Definition of Trust Fund. Trust Fund shall consist of private and public monies which have officially come into the possession of the local government or of a local government
official as trustee, agent or administrator, or which have been received as a guaranty for the fulfillment of some obligation. A trust fund shall only be used for the specific purpose for which it
was created or for which it came into the possession of the local government unit.
Sec. 95. Receipts Accruing to the Trust Fund. Grants and donations coming from foreign funding institutions, other levels of government and private institutions/individuals
for specific projects/purpose shall accrue to the Trust Fund. Equity of the LGU on projects under a trust agreement shall also accrue to the Trust Fund. These receipts shall be credited to the
Project Equity account.
Loans of LGUs for income generating projects from the Municipal Development Fund Office (MDFO) requiring counterpart funding from LGUs shall not be recorded in the Trust Fund but as a
Special Account in the General Fund.
Sec. 96. Collection Procedures for the Trust Fund. Cash collections for the Trust Fund shall be acknowledged through the issuance of an official receipt. Procedures for the turn over of
collections, frequency of deposit of collection with the bank, preparation of report of collections, verification of collections and accountable forms, preparation of report of accountability for
accountable forms as well as consolidation of reports of accountable forms shall be the same as that prescribed for collections in the General Fund.
In case of receipt of funds through the bank, the Accountant shall draw a JEV based on the bank credit memo.
Sec. 97. Project Expenditures. The construction period theory shall apply for expenditures on infrastructure projects of the Trust Fund. For other projects, expenditures shall be debited
to the appropriate expenditure account. Expenditures shall be closed to Project Equity account at year-end or upon project completion, whichever comes first.
Sec. 98. Separate Cashbooks for Trust Fund. The Treasurer and/or the concerned accountable officers shall maintain separate cashbooks for the Trust Fund which shall be in
accordance with the prescribed format.
Sec. 99. Separate Books of Accounts and Financial Reports for Trust Fund. The Chief Accountant shall maintain separate books of accounts for Trust Fund. He shall likewise prepare
separate financial reports such as the Trial Balance, Balance Sheet, Statement of Cash Flows and supporting schedules, to be submitted within the prescribed timeframe.
Sec. 100. Disbursements within Trust Agreement/Approved Budget. Disbursements from trust funds shall be in accordance with the specific purpose stated in the trust
agreement/approved budget between the trustor and trustee (LGU) as certified by the Chief Accountant. The certification on the DV as to existence of funds held in trust shall serve this
purpose.
Sec. 101. Certification and Approval of Disbursements from Trust Funds. Disbursements from the Trust Fund shall require:
a.
b.
c.
Certification and approval of vouchers and payrolls as to validity, propriety and legality of the claim involved by the department/ office head concerned;
Certification as to existence of funds held in trust and completeness and propriety of supporting documents by the Accountant;
Certification as to cash availability by the Treasurer; and
44
d.
Approval by the Administrator of the fund.
Sec. 102. Disbursement Process. Disbursements from the Trust Fund shall be as follows:
a.
Disbursement by check
PROCESS
PERSON / UNIT
RESPONSIBLE
1.
Gather supporting documents,

prepare DV/payroll and forward to
Head of Department.
Concerned Office
2.
Sign Box A of DV and submit to the

Accounting Unit.
Supervisor/Head of
Department
3.
Check completeness of documents

and verify existence of funds held in
trust, assign number to DV/Payroll,
sign Box B and forward to Treasurer.
Accounting Unit
4.
Verify claim, certify cash availability

(Box C) and forward to approving
officer.
Treasurer
5.
Approve transaction (Box D) and

forward DV to Cashier.
Local Chief Executive/

Administrator of the
Fund
6.
Prepare and sign check and forward

check with DV to countersigning
officer.
Treasurer
7.
Countersign check and forward to

Accountant for preparation of the
Accountants Advice.
Administrator
8.

Local Check Disbursements and
return DV, check and supporting
documents to Cashier/Treasurer.
Accountant
9.
Issue check to claimant. Record

disbursement in Cashbook Cash in
Bank. Prepare Report of Checks
Issued (RCI), forward RCI with DV
and supporting documents to
Accounting Unit.
Treasurer
10. Prepare the JEV based on individual

checks/voucher; sign Prepared By
portion (approved by Chief
Accountant), and record JEV in the
Accounting Unit
45
PROCESS
PERSON / UNIT
RESPONSIBLE
Check Disbursements Journal. Post

monthly to the General
Ledger/Subsidiary Ledgers
11. Forward RCI, DV, supporting
documents and JEV to the Office of
the Auditor for final custody and
post audit.
b.
Accountant
Payments through cash advances
For payments through cash advances, procedures 1 to 5 for check disbursement shall be followed. The rest of the procedures shall be the same as that of the General Fund.
Sec. 103. Inventory Process. The perpetual inventory method and the moving average method shall likewise be adopted in the accounting and costing of inventory. The general
procedures, the forms and reports for the holding of inventory shall also be followed. However, separate perpetual inventory records and stock cards shall be maintained by the Accounting
Unit and the General Services Officer or the Treasurer as the case maybe. Likewise, separate weekly Summary for Supplies and Materials Issued pertaining to the fund shall be prepared.
Sec. 104. Pro-forma Accounting Entries for Trust Funds. Accounting entries for typical transactions under the trust funds are as follows:
Particulars
1.
Account Title
Acct
.
Cod
e
II.
III. Debi
t
Credit
Receipt of grant from NGA
a. Receipt of grant
direct to bank from
NGA for:
a. Construction
of road P2M
b. Purcha
se of
constr
uction
Equipment
P500,000
b. Issuance of
check with approved
DV for payment to
contractor upon
receipt of first billing
50% accomplished
c. Submission of
statement of
disbursements to
grantor
Cash in Bank LCCA

Project Equity
502-01
P2,500,000
Construction in
Progress
Roads, Highways
& Bridges
Withholding Taxes
Payable
Cash in Bank LCCA
110
2,500,00
0
502
232
410
110
2,500,00
0
1,000,00
0
100,000
900,000
No entry
46
Particulars
Account Title
d. Issuance of
check with approved
DV for payment to
contractor upon
receipt of second
billing 100%
accomplished
Construction in
Progress Roads,
Highways &
Bridges
Withholding Taxes
Payable
Cash in Bank LCCA
e. Transfer of
completed
construction to
Public Infrastructure
Public
Infrastructures
Construction in
Progress
Roads, Highways
& Bridges
f. Remittance of
taxes w/held
g. Purchase of
equipment
h. Payment of
withholding tax
i. Submission of full
liquidation to
grantor and transfer
of completed road
and equipment to
GF for LGU use
Withholding Taxes
Payable
Cash in Bank LCCA
Construction and
Heavy Equipment
Withholding Taxes
Payable
Cash in Bank LCCA
Withholding Taxes
Payable
Cash in Bank LCCA
Project Equity
Public
Infrastructures
Construction and
Heavy Equipment
Acct
.
Cod
e
232
410
110
243
II.
III. Debi
t
1,000,00
0
100,000
900,000
1,000,00
0
232
1,000,00
0
410
110
200,000
212
500,000
200,000
410
110
50,000
450,000
410
110
50,000
502
243
2,500,00
0
212
Credit
50,000
2,000,00
0
500,000
47
Particulars
Account Title
Acct
.
Cod
e
II.
III. Debi
t
Credit
Note: Under the GF books, completed infrastructure project shall be

recorded in the Registry of Public Infrastructures with the TF JEV No. as
basis. The transferred equipment shall be recorded as follows:
General Fund
Public
243
2,000,00
Books:
Infrastructures
0
Construction and
Heavy Equipment
212
500,000
Invested Equity
537
2,500,00
0
At the end of the
year:
a. Closing of
Invested Equity to
Government Equity
Invested Equity
Government Equity
537
502
2,500,00
0
b. Transfer of Public
Infra- structure to
RPI
Government Equity
Public
Infrastructures
502
243
2,000,00
0
2.
2,500,00
0
2,000,00
0
Receipt of grant with counterpart fund from LGU
a. Project budget as
agreed upon
between grantor
and LGU for project:
Grantor
Building 1.2M
Equipment .
3M
LGU Funded
Office supplies
-1M
Salaries of project
Personnel - .
4M
Total
2M
b.
Receipt of funds
from foreign
funding
institution thru
national
government
Cash in Bank LCCA

Project Equity
502-01 1,500,000
502-02 500,000
110
502
2,000,00
0
2,000,00
0
48
Particulars
agency
Account Title
Acct
.
Cod
e
II.
III. Debi
t
Credit
Note: Entry in LGU General Fund books shall be

Grants and
Donations
Cash in Bank LCCA
889
500,000
110
500,000
c. Issuance of check
with approved DV
for payment to
contractor for
Construction of
Building, 50%
accomplished.
Construction in
Progress
Agency Assets
Withholding Taxes
Payable
Cash in Bank LCCA
d. Remittance of
withholding tax
Withholding Taxes
Payable
Cash in Bank LCCA
410
110
50,000
e.
Cash Disbursing
Officers
Cash in Bank LCCA
107
110
170,000
803
200,000
Issuance of
check with
approved DV for
cash advance
on salaries and
wages of
project
administrative
personnel
f. Liquidation of
Cash Advances
g.
Remittance of
tax withheld
Salaries and Wages

Casual/
Contractual
Withholding Taxes
Payable
Cash Disbursing
Officers
Withholding Taxes
Payable
230
500,000
410
110
50,000
450,000
50,000
170,000
410
30,000
107
170,000
410
30,000
49
Particulars
Account Title
Cash in Bank LCCA
Acct
.
Cod
e
110
h. Issuance of
check with approved
DV for purchase of
supplies and
materials
Office Supplies
Inventory
Cash in Bank LCCA
149
110
100,000
i. Issuance of office
supplies
Office Supplies
Expenses
Office Supplies
Inventory
849
60,000
j. Purchase of IT
equipment
k.
Remittance of
withholding tax
l. Issuance of check
for installation of
equipment
End of Year
m.Closing. of
expenses to Project
Equity
Succeeding year
n.
Issuance of
check with approved
DV for payment to
IT Equipment and
Software
Withholding Taxes
Payable
Cash in Bank LCCA
II.
III. Debi
t
149
215
250,000
410
110
25,000
225,000
410
110
25,000
IT Equipment and
Software
Cash in Bank LCCA
215
110
50,000
502
260,000
Construction in
Progress
Agency Assets
100,000
60,000
Withholding Taxes
Payable
Cash in Bank LCCA
Project Equity
502-02 P260,000
Salaries and Wages
Casual/
Contractual
Office Supplies
Expenses
Credit
30,000
25,000
50,000
803
200,000
849
60,000
230
700,000
50
Particulars
contractor for
Construction of
Building 100%
accomplished.
Account Title
Withholding Taxes
Payable
Cash in Bank LCCA
o.
Remittance
of withholding tax
Withholding Taxes
Payable
Cash in Bank LCCA
p.
Transfer of
construction in
progress to
property, plant and
equipment account
Property Plant and

Equipment
Building
Construction in
Progress Agency
Assets
Acct
.
Cod
e
II.
III. Debi
t
410
110
70,000
630,000
410
110
70,000
204
1,200,00
0
70,000
230
1,200,00
0
q.
Issuance of
check for cash
advance on salaries
and wages
Cash Disbursing
Officers
Cash in Bank LCCA
107
110
170,000
r.
Liquidation
of salaries and
wages
Salaries and Wages

Casual/Contractual
803
200,000
Withholding Taxes
Payable
Cash Disbursing
Officers
s. Remittance of
withholding tax
t. Issuance of office
supplies
End of Year
u. Closing of
expenses to
Project Equity
Withholding Taxes
Payable
Cash in Bank LCCA
Office Supplies
Expenses
Office Supplies
Inventory
Project Equity
Salaries and Wages
Casual/
Contractual
Office Supplies
Credit
170,000
410
30,000
107
170,000
410
110
30,000
849
40,000
30,000
149
502
803
40,000
240,000
200,000
51
Particulars
Acct
.
Cod
e
849
II.
III. Debi
t
Project Equity
Building
IT Equipment and
Software
502
204
1,500,00
0
Building
204
IT Equipment and
Software
Invested Equity
1,200,00
0
215
537
300,000
Invested Equity
537
1,500,00
0
Government Equity
501
Account Title
Expenses
Project
Completion
v. Transfer of
building and
equipment to the
General Fund as
follows:
General Fund
Books:
At end of year:
215
Credit
40,000
1,200,00
0
300,000
1,500,00
0
1,500,00
0
Chapter 6.
SPECIAL ACCOUNTS
Sec. 105. Special Accounts in the General Fund. Local government units shall maintain special accounts in the General Fund for public utilities and other economic enterprises, loans,
interests, bond issues, and other contributions for specific purposes; and development projects funded from the share of the local government concerned from the internal revenue
collections and development of national wealth and such other special accounts which may be created by law or ordinance.
Sec. 106. Objectives for the Maintenance of Special Accounts. Accounting procedures for the operation of the special accounts are adopted in order to:
a.
Determine whether the income generated by the public utilities or economic enterprises are sufficient to meet their respective operating costs.
b.
Provide adequate information as to the assets, liabilities and equity of each special account.
Sec. 107. Special Accounts Subsidiary Ledger. Special accounts shall be maintained through the use of complete subsidiary ledger. In case the local government unit maintains a
number of the same economic enterprise, each shall have its own set of subsidiary ledger (e.g. 8 markets - 8 subsidiary ledgers for the market).
Sec. 108. Sub-codes for the Special Accounts. The following shall be the sub-codes for the special accounts:
52
SPECIAL ACCOUNT
SUB-CODE
General Fund Proper

Market Operation
Slaughterhouse Operation
Waterworks System
Electric, Light and Power System
Telephone System
Toll Roads, Bridges and Ferries
Transportation System
Hospital
School
Sports Center
Recreational Center
Housing Projects
Convention/Conference Center
Parking Space
Ice Plant
Cemetery
20% Development Fund
80% Share from Energy Sources
Share from Development of National Wealth
Loans
Interests
Bond Issues
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
19
20
21
22
23
Sec. 109. Profit from Operation. Profits or income derived from the operation of public utilities and other economic enterprises, after deduction of the cost of improvement, repair and
other related expenses of the public utility or economic enterprises concerned, shall first be applied for the return of the advances or loans made therefor, any excess shall form part of the
general fund of the local government unit concerned.
Sec. 110. Reporting. At the end of the year, post-closing trial balance shall be prepared for each special account. Also, the following financial statements shall be prepared:
a.
b.
c.
Balance Sheet
Statement of Income and Expenses
These reports shall form part of the schedules of the General Fund trial balance.
Sec. 111. Pro-forma Accounting Entries.
Transaction
Acct.
Code
a. Receipt of Share from IRC for P100,000.

Cash in Bank LCCA
110
Cash in Bank LCCA

P80,000
(01)
(18)
Debit
Credit
100,00
0
20,000
53
Transaction
Share from Internal Revenue Collections
(IRC)
Share from IRC
(01)
80,000
(18)
20,000
Acct.
Code
746
Debit
Credit
100,000
b. Receipt of collections for P148,500.

Distribution:
RPT- Basic 58,500 (net of 10% discount)
Market fees 40,000
Bus. Tax
50,000
Cash in Treasury
101
Cash in Treasury
108,500
Cash in Treasury
40,000
Discount on RPT
(01)
Discount on RPT
(01)
6,500
RPT Receivable
RPT Receivable
65,000
Business Taxes & Licenses
Business Taxes & Licenses
50,000
Receipts from Markets
Receipts from Markets
40,000
148,50
0
(02)
937
6,500
124
65,000
723
50,000
783
40,000
(01)
(01)
(02)
c. Requisition of Office Supplies for the

following:
Operation of Market
P10,000
Programs under the 20% Dev. Fund
2,000
Office of the Treasurer
8,000
d. Obligation of the requested supplies.
No accounting entry
Entry in the RAAOMO
e. Payment of Office Supplies for the

following:
Operation of Market
P10,000
Programs under the 20% Dev. Fund
2,000
54
Acct.
Code
Transaction
8,000
Total
20,000
Less: Withholding tax
1,000
Net
19,000
Office Supplies Inventory
(01)
10,000
2,000
Cash in Bank LCCA
Cash in Bank - LCCA
7,600
IV.
Cash in Bank - LCCA
9,500
Cash in Bank - LCCA
1,900
Withholding Taxes Payable
400
500
100
149
Debit
Credit
20,00
0
8,000
(02)
(18)
110
19,000
410
1,000
(01)
(02)
(18)
(01)
(02)
(18)
f. Report of Utilization of Office Supplies

Operation of Market
3,000
2,000

20% Dev. Fund
1,000
Office Supplies Expenses
849
Office Supplies Expense
(01)
(02)

1,000
(18)
3,000
2,000
149
6,000
6,000
55
Acct.
Code
Transaction
3,000
2,000
1,000
Debit
Credit
(01)
(02)
(18)
g.
Request for procurement of office

equipment
of the following offices.
Office of the Accountant
Office of the Market Master
No accounting entry
5,000
4,000
h. Obligation of the requested equipment
i.
Entry in the RAAOCO
Payment of the procured equipment:
Office of the Accountant

4,800
Office of the Market Master
4,000
Gross
8,800
Withholding Tax
440
Net
8,360
Office Equipment
Office Equipment
4,800
Office Equipment
4,000
222
8,800
(01)
(02)
Withholding Taxes Payable (01)
240
Withholding Taxes Payable (02)
200
Cash in Bank LCCA

Cash in Bank LCCA
(01)
4,560
Cash in Bank LCCA
(02)
3,800
410
440
110
8,360
56
Transaction
j.
Obligation of Subsidy to the Operation of
the
Market from the GF Proper for P12,000
Acct.
Code
Debit
Credit
Entry in the RAAOMO
k. Transfer of the funds for P12,000.

Subsidy to Special Accounts
898
Subsidy to Special Accounts (01)

12,000
Cash in Bank LCCA
Cash in Bank LCCA
12,000
l.
12,00
0
110
12,000
(01)
Receipt of the transferred funds.

Cash in Bank LCCA
110
12,00
0
Cash in Bank LCCA

(02)
12,000
Subsidy from Special Accounts
606
12,000
Subsidy from Special Accounts (02)

12,000
Chapter 7.
SUPPLIES OR PROPERTY
ACCOUNTING FOR SUPPLIES OR PROPERTY

Sec. 112. Definition of Supplies or Property. Supplies or property include everything, except real property, which may be needed in the transaction of public business or in the pursuit
of any undertaking, project or activity, whether in the nature of equipment, furniture, stationery, materials for construction or personal property of any sort, including non-personal or
contractual services such as the repair and maintenance of equipment and furniture, as well as trucking, hauling, janitorial, security, and related services. ( Sec. 356c of the LGC)
Sec. 113. Classification of Supplies or Property. Supplies or property shall have the following classification:
a.
Expendable supplies or property referring to articles which are normally consumed in use within one year or converted in the process of manufacture or construction, or those
having a life expectancy of more than one year but which shall have decreased substantially in value after being put to use for only one year. Examples are stationery, fuel,
spare parts. Expendable supplies forms part of the maintenance and operating expenses of the LGU.
b.
Non-expendable supplies or property referring to articles which are not consumed in use and ordinarily retain their original identity during the period of use, whose serviceable
life is more than one year and which add to the assets of the government. Examples are furniture, fixtures, transport equipment and other equipment. Non-expendable supplies
or property are proper charges to capital outlay of the LGU.
57
c.
Non-personal services includes, but is not limited to repairing, cleaning, redecorating, and furnishing of necessary repair parts or other supplies as part of the services
performed. Examples are contractual services like trucking, hauling, janitorial, security and related services. Non-personal services are proper charges to maintenance and
operating expenses of the LGU.
Sec. 114. Perpetual Inventory Method. Purchase of supplies and materials for stock, regardless of whether or not they are consumed within the accounting period, shall be recorded as
inventory following the perpetual inventory method. Under the perpetual inventory method, an inventory control account is maintained in the General Ledger on a current basis. In addition,
detailed inventory records are maintained for each inventory item.
Regular purchases shall be coursed thru the inventory account and issuances thereof shall be recorded as they take place, except those purchased out of the petty cash fund which
shall be for immediate use and for stock in which case shall be charged immediately to the appropriate expense accounts.
The Chief Accountant shall maintain the perpetual inventory records comprising of Supplies Ledger Cards (SLC) for each commodity/stock, Property, Plant and Equipment Ledger Card
(PPELC) for each category of plant, property and equipment and Work, Other Animals and Breeding Stocks Ledger Card (WOABSLC) for each type of livestock. Such ledger cards shall contain
the details of the property, plant and equipment and livestock account in the inventory control account in the general ledger.
The General Services Officer or the Municipal Treasurer, as the case maybe shall likewise maintain stock cards and property cards for supplies; property, plant and equipment; and
work animals in their custody to account for the receipt and disposition of the same. The balance per stock card/property cards should always reconcile with the ledger cards of the accounting
unit. They should also reconcile with other property records like Acknowledgement Receipt for Equipment (ARE).
Sec. 115. Moving Average Method. The moving average method of costing shall be used for costing inventories. This is a method of calculating cost of inventory on the basis of
weighted average on the date of issue. The Chief Accountant shall compute the inventory cost monthly using the method. Illustrative calculation of inventory using this method is as follows:
Ball pen
Reference
Beg.
Balance
per actual
inventory
Delivery
Receipt/
Invoice
No.
RIS No.
Delivery
Receipt/
Invoice
No.
RIS No.
Delivery
Receipt/
Invoice
No.
Date
Received
Issued
Jan.
1
Jan
12
Balance
200 @
P10
400
@ 12
4,80
0
P2,00
0
600 @
11.33
6,800
Jan.
16
Jan.
26
500
@
11.3
3
300
@ 11
400 @
11.09
3,30
0
Jan.
29
Jan.
30
200
@
11.0
9
100
@ 12
5,66
5
1,20
0
100 @
11.35
2,21
8
200
@11.0
9
300 @
11.39
1,135
4,435
2,217
3,417
(On Jan. 12, the new unit cost of P11.33 was found by dividing P6,800, the total cost, by 600, the number of units at hand. Then on Jan. 16, the peso balance, P1,135 represented the
previous balance P6,800 less P5,665, the cost assigned to the 500 units issued on this date. New unit costs were calculated on Jan. 26 and 30 when additional units were acquired. )
Sec. 116. Requisition Procedures. (a) Requirement of Requisition - Any order for supplies shall be filled by the provincial general services officer, the city general services officer, or the
municipal treasurer, as the case maybe, for any office or department of the LGU concerned only upon written requisition.
58
(b) Forms to be used - Requisitions shall be accomplished using the following forms:
(1)
(2)
Requisition Issue Slip (RIS) - for supplies carried in stock; and

Purchase Request (PR) - for supplies not carried in stock.
(c) Preparation of Requisition - At the beginning of the year, the Office of the General Services Officer (GSO) or the Municipal Treasurer, as the case maybe, shall prepare a PR for
supplies and materials needed for the quarter based on the approved Annual Procurement Program. Subsequent requisition from stock shall be made by the head of office or department
needing the supplies. A Supplies Availability Inquiry (SAI) shall be used to inquire as to availability of supplies needed from the Office of the Chief Accountant. If supplies are available, the RIS
shall be prepared and submitted to the GSO/Local Treasurer for the issuance of supplies. If the supplies needed are not available from stock, a PR shall be prepared.
The head of office or department needing the supplies shall certify as to their necessity for official use and shall specify the project or activity where the supplies or property are to be
used.
(d) Certification on Allotment and Obligation Slip (ALOBS) - Every PR must be accompanied by an ALOBS showing the certification of the local budget officer and the local accountant,
that an appropriation therefore exists; and that the estimated amount of such expenditure has been obligated. The Local Treasurer shall certify as to cash availability in the purchase request.
(e) Approval of Requisitions - Approval of requisitions by the head of office or department concerned who has administrative control of the appropriation against which the proposed
expenditure is chargeable is deemed sufficient, except in case of requisition for supplies to be carried in stock which shall be approved by the local chief concerned.
Sec. 117.
Issuance of Purchase Orders or Contract. Immediately after the LGU has performed all the required procedures adopting a particular mode of procurement, a
purchase/letter order or contract shall be issued.
The date when the purchase/letter order was received by the supplier or contractor shall be indicated clearly.
The purchase order or contract shall be released only to, and signed for by, the awardee or his duly authorized representative.
Sec. 118. Acceptance and Inspection of Purchases. Deliveries of items purchased by the local government units shall be accepted first by the general services officer or municipal
treasurer as the case maybe before inspection. Inspection of purchases shall be made by the authorized inspector/s for conformity with specification in the order. Acceptance and inspection
shall be made using the Acceptance and Inspection Report (AIR).
Sec. 119. Property Records to be Maintained. The General Services Officer or the Local Treasurer, as the case maybe, shall number each type of supplies and maintain Stock Cards per
stock number. He shall likewise maintain Property Cards per category of property, plant and equipment.
Deliveries of supplies or property shall be immediately recorded in the property records on the basis of the AIR and other supporting documents. The AIR and other supporting
documents shall be forwarded to the Chief Accountant for the preparation of the DV and recording of deliveries in the appropriate ledger cards.
Sec. 120. Recording of Deliveries of Supplies or Property in the Books of Accounts. The Chief Accountant shall maintain Supplies Ledger Cards per stock number; Property, Plant
and Equipment Ledger Cards for each category of assets; and Real Property Ledger Cards for land.
Upon receipt of the AIR and other supporting documents, the Chief Accountant shall record the deliveries in the appropriate ledger cards. Upon completion of the disbursement
process pertaining thereto the Chief Accountant shall prepare the JEV taking up the in the books the procurement made. Thereafter, the Chief Accountant shall reconcile the JEV with the
appropriate ledger cards.
Sec. 121. Reporting on Issuance of Supplies/materials. The General Services Officer or the Local Treasurer, as the case maybe, shall consolidate weekly the RIS for which supplies
and materials were issued using the Summary of Supplies and Materials Issued (SSMI). The SSMI together with the original copy of the RIS shall be submitted to the Chief Accountant, who
shall compute cost of supplies issued and ending inventory using the moving average method. Based on the SSMI, a JEV shall be prepared to record the expenditures using appropriate
expenditure accounts.
Sec. 122. Inventory Process. The following is the general process to be followed in the control of inventory:
PROCESS
a.
Prepare Purchase Request
PERSON / UNIT RESPONSIBLE

Office of the General Services Officer
59
PROCESS
(PR) for supplies and
materials needed for the
quarter based on the
approved
annual
procurement program, at
the beginning of the year
and of each subsequent
quarters.

(GSO) or the Municipal Treasurer as the
case maybe.
b. Prepare ALOBS covering the

requisition under the PR.
Office of the GSO or the Municipal

Treasurer or the office authorized to
prepare the same.
c. Approve ALOBS and the PR.
The Budget Officer and the Chief

Accountant, for the ALOBS; and the Local
Chief Executive and the Local Treasurer,
for the PR.
d. Prepare Purchase Order.
GSO/Local Treasurer
e. Approve Purchase Order.
f.
Receive delivered items,

prepare Acceptance and
Inspection Report (AIR)
and
signs
acceptance
portion.
GSO/Local Treasurer
g.
Inspect items, and signs

inspection portion of the
AIR.
Property Unit/LGU Inspector
h.
Record delivered items in

the stock/property cards.
Prepare
Disbursement
Voucher (DV), sign box A
and forward the same
with
the
delivery
receipt/invoice/
appropriate documents to
Accounting Unit.
GSO/Local Treasurer
60
PROCESS
Record delivered items in
Supply
Ledger
Card/Property, Plant and
Equipment
Ledger
Card/Work, Other Animals
and
Breeding
Stocks
Ledger Card, on the basis
of the AIR. Process DV and
follow
disbursement
process.
Prepare JEV.
Reconcile JEV with the
entries in the ledger cards
recorded on the basis of
the AIR.

Accounting Unit
j.
Prepare Stock Availability

Inquiry (SAI) and forward
to Accounting Unit.
Requisitioning Unit
k.
Verify
records,
advise
requisitioning unit.
Accounting Unit
l.
Prepare Requisition and

Issue
Slip
(RIS)
and
forward
to
Property
/Supply Unit.
Requisitioning Unit
i.
m. Release
supplies/equipment
and
record issuance in the
stock
cards/property
cards.
GSO/Local Treasurer
n.
Consolidate RIS for which

supplies and materials
were issued and prepare
the Summary of Supplies
and
Materials
Issued
(SSMI) and forward to
Accounting Unit.
GSO/Local Treasurer
o.
Prepare JEV on the basis

of
SSMI,
and
record
withdrawals
in
Supply
Ledger Cards (SLC).
Accounting Unit
61
Sec. 123. Receipts of Issuance. All issuances of supplies or property shall be properly receipted using the forms prescribed under applicable rules and regulations on supply and property
management in local government units. For transfer of equipment, the Acknowledgement Receipt for Equipment (ARE) shall however be used.
Sec. 124. Inventory of Supplies or Property. The local chief executive shall require periodic physical inventory of supplies or property. Physical count of inventory items by type shall
be conducted semestrally and reported in the Report of the Physical Count of Inventories (RPCI). This shall be submitted to the Auditor concerned not later than July 31 and January 31 of each
year for the first and second semesters, respectively.
Physical count of property, plant, and equipment by type shall be made annually and reported on the Report on the Physical Count of Property, Plant and Equipment (RPCPPE). This
shall be submitted to the Auditor concerned not later than January 31 of each year.
Sec. 125. Disposal of Supplies or Property. - Disposal procedures shall be in accordance with applicable rules and regulations on supply and property management in local government
units. The Waste Materials Report (WMR) and the Inventory and Inspection Report of Unserviceable Property (IIRUP) shall be used .
Sec. 126. ProForma Accounting Entries. The following are the pro-forma accounting entries for supplies or property:
Particulars
Account Title
1. Supplies and Materials

1.1 Spare parts
(enter Obligation in
Issuance of
the RAAOMO- P100)
PR for spare
parts
Spare
Parts
Inventory
Record delivery of
Accounts Payable
items and charge
invoice, if
procurement is on
credit
Accounts Payable
Payment of
Withholding
Taxes
Invoice
Payable
Cash in Bank LCCA
If
Procurement
is on Cash
Spare
parts worth P50
used for repairs of
motor vehicles.
1.2
Spare
Parts
Inventory
Withholding Taxes
Payable
Cash in Bank LCCA
Motor Vehicles
Maintenance
Spare Parts
Inventory
Acct
.
Cod
e
Debit
155
401
100
401
100
100
410
110
155
20
80
100
410
110
878
155
Credit
80
50
20
50
Office
Supplies -
62
Particulars
Issuance
of PR for office
supplies P100.
Record
delivery of items
and charge
invoice, if
procurement is on
credit.
Payment of
Charge
Invoice
If
procurement
is on cash
basis
Account Title
(Enter obligation in
the RAAOMO-P100)
Acct
.
Cod
e
Office Supplies
Inventory
Accounts Payable
149
Accounts Payable
Withholding Taxes
Payable
Cash in Bank LCCA
401
Office Supplies
Inventory
Withholding Taxes
Payable
Cash in Bank LCCA
Office Supplies
Expenses
Office Supplies
Inventory
Debit
Credit
100
401
100
100
410
110
149
20
80
100
410
110
849
80
20
100
149
100
Withdrawal of
Office
Supplies for
office use.
1.3
Accountable
Forms Issuance
of PR for
accountable forms
Procurement
on a cash
basis
al
of
supplies
Withdraw
office
the RAAOMO
P100.00)
Accountable Forms
Inventory
Withholding Taxes
Payable
Cash in Bank LCCA
Accountable Forms
Expenses
Accountable Forms
Inventory
148
100
410
110
848
148
20
80
100
100
63
Particulars
Account Title
Acct
.
Cod
e
Debit
Credit
2. Equipment
2.1
Office
Equipment Issuance of
PR for Office
Equipment
-P20,000
Record
charge
invoice and
Delivery of
item.
RAAOCO-P20,000)
Office Equipment
Accounts Payable
Accounts Payable
Withholding Taxes
Payable
Cash in Bank LCCA
222
401
401
20,000
20,000
20,0
00
410
110
2,000
18,000
Payment of
delivered
Equipment
2.2
Issuance of
PR
for
Furniture and
Fixture
P20,000
Record
Charge
Invoice and
delivery of
item
Payment of
delivered
furniture and
fixture
(Enter Obligation in
RAAOCO-P20,000)
Furniture
and
Fixtures
Accounts Payable
Accounts Payable
Withholding Taxes
Payable
Cash in Bank LCCA
224
401
20,000
401
20,000
410
110
20,000
2,000
18,000
3. Non-Personal Services
3.1 Security
Services (Enter obligation in
64
Particulars
Issuance of
contract for
security
services P120,000
Receipt
of
monthly
Billing- P10,000
Payment of
monthly
billing
Account Title
the RAAOMOP120,000)
Acct
.
Cod
e
Debit
Security and
Janitorial
Services
Accounts Payable
858
401
10,000
401
10,000
Accounts Payable
Withholding Taxes
Payable
Cash in Bank LCCA
410
110
Credit
10,000
1,000
9,000
3.2 Plumbing
Services Signing of
contract for
Plumbing
Services
P120,000
Receipt of
monthly
billing
P10,000
the RAAOMOP120,000)
General Services
Accounts Payable
857
401
10,000
Accounts Payable
Withholding Taxes
Payable
Cash in Bank LCCA
401
10,000
410
110
10,000
1,000
9,000
Payment of
Monthly
Billing
65

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THE NEW GOVERNMENT ACCOUNTING SYSTEM MANUAL

For Local Government Units

BASIC FEATURES AND POLICIES

Public utilities and other economic enterprises;

Books of Accounts. The Books of Accounts are as follows:

Cash Receipts Journal (CRJ)

General Ledger (GL)

Cashbook Cash in Treasury

10. Financial Statements. The following statements shall be prepared:

11. Notes to Financial Statements shall accompany the above statements.

Capital Outlay (RAAOCO)

Registry of Public Infrastructure Bridges (RPIB)

Chapter 3. ACCOUNTING SYSTEM

Appropriations, Allotments and Obligations

GENERAL ACCOUNTING PLAN (MS Excel file)

Capital Outlays (RAAOCO)

Records in the appropriate RAAOs the

b) Forwards the advice of allotments to

Office of the Budget

Enters the allotments in the RAAOs.

d) Prepares ALOBS based on

office. Forwards the same to the Office of

g) Records paid disbursement vouchers

h) At the end of each month, reconcile

Budget Officer and

Investments outlay (e.g. stocks, bonds)

INCOME/COLLECTIONS AND DEPOSITS

Tax revenues, fees and charges

Subsidy from Other LGUs

Subsidy from Other Funds

Receive payment from taxpayers/ creditors

Check remittances and verifies accountable

Receive remitted collections, consolidates the

Deposit collections in the appropriate bank

Forward RCD to Accounting Unit with copies of

Prepare Journal of Entry Voucher and record in

1. Real Property Tax Basic

Real Property Tax

Cash in Bank LCCA

a. Upon receipt of the

Due from LGUs

Cash in Bank LCCA

2. Operating and Service Income

Cash in Bank LCCA

3. Share from Internal Revenue Collections

Cash in Bank LCCA

Due from NGAs

4. Grants and Donations

(At the end of Year)

Cash in Bank LCCA

Cash in Bank LCCA

SPECIAL EDUCATION FUND BOOKS

b. Special Accounts (subsidy from General Fund proper to

BOOKS OF SPECIAL ACCOUNT (OPERATION OF PUBLIC MARKET)

Cash in Bank LCCA

7. REFUND OF CASH ADVANCES

Due from Officers &

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

8. RECEIPT OF CASH BONDS