Chapter 3

The Revised Chart of Accounts

INTRODUCTION
The Commission on Audit as member of the International Organization of Supreme Audit
Institutions (INTOSAI) is encouraged to adopt relevant International Accounting Standards. Thus, to
provide new accounts for the adoption of the Philippine Public Accounting Standards (PPSAS) which were
harmonized with the IPSAS to enhance the accountability and transparency of the financial reports, and
ensure compatibility of financial information, the COA recognizes the need to revise the existing NGAS
Chart of Accounts prescribed in COA Cir. No, 2004-008 dated September 20, 2004.

1. Define and discuss the underlying reason why chart of accounts is prescribed in new
accounting system.
To enhance the accountability and transparency of the financial reports, and ensure
compatibility of financial information.
2. Where is the Revised Chart of Accounts As per Government Accounting Manual Volume Ill,
and the Chart of Accounts as Object Code in the Unified Accounts Code Structure (UACS)
based:
a. COA Circular No. 2013-002 dated January 30, 2013 prescribing the adoption of the
Revised Chart of Accounts (RCA) for National Government Agencies (NGAs) effective
January l, 2014;
b. COA Resolution No. 2014-003 dated January 24, 2014 prescribing the adoption of the
Philippine Public Sector Accounting Standards (PPSAS);
c. COA Circular No. 2014-003 dated April 15, 2014 providing the implementing rules and
guidelines on the Conversion from the Philippine Government Chart of Accounts under the
New Government Accounting System per COA Circular No. 2004-098 dated September 20,
2004, as amended, to the Revised Chart of Accounts for NGAs;
d. COA-DBM-DOF Joint Circular No. 2013-1 dated August 6, 2013 prescribing the UACS,
and
e. COA-DBM-DOF Joint Circular No. 2014-1 dated November 7, 2014 providing the
enhancement of UACS prescribed under COA-DBM-DOF Joint Circular No. 2013-
3. What are the elements of financial statements?
 Assets — economic resources of an agency that are recognized and measured in conformity
with generally accepted accounting principles. Any owned physical object (tangible) or right
(intangible) with economic value that is expressed, for accounting purposes, in terms of its
cost or some other value. These other values include revalued amounts, current cost, net
realizable value, fair value and recoverable amounts.
 Liabilities --- economic obligations of an agency that are recognized and measured in
conformity with accounting principles. Also include certain deferred credits that are not
obligations, but which are nonetheless recognized and measured according to accounting
principles as outlined in Philippine Public Sector Accounting Standards.
 Equity ---- residual interest of the government in an agency which is the excess of the
agency's assets over its liabilities.
 Income---- the gross inflow of economic benefits or service potential during the reporting
period, when those inflows result in an increase in net assets/equity, other than increases
relating to contributions from owners. The term "income" is broader that revenue and
includes gains in addition to revenue.
 Expenses —refer to decrease in economic benefits or service potential during the reporting
period in the form of outflows or consumption of assets or incurrence of liabilities that result
in decrease in net assets/equity, other than those relating to distributions to owners.
4. (PPSAS 1 — Presentation of Financial Statements) COA Cir. No. 2013-002
It provides that the account code structure consists of eight (8) mandatory digits as follows: Account
Group, Major Account Group, Sub-Major Account Group, General Ledger Accounts, General
Ledger Contra-Accounts
 The Account Group represents the accounts classification as to Assets, Liabilities Equity
Income and Expenses.
  The Major Account group represents classification within the account group; example: for
Asset major accounts- Cash and Cash Equivalents, Investments, Receivables, etc.
 Sub-Major Account group represents classification within the major e.g. for Cash and Cash
Equivalent: Cash on Hand, Cash in Bank-Local Currency, Cash in Bank-Foreign Currency,
etc.
 The General Ledger accounts represent the accounts to be presented in the detailed
financial statements, e.g. Cash-Collecting Officer, Petty Cash, etc. This is Composed of
segments. The first two digits from the left is the general ledger code, and the last digit is
reserved for contra accounts like, Allowance for Impairment, Accumulated Depreciation,
etc.
5. Classifications of expenses + sub major groups
1. Personnel services
i. Salaries and wages
ii. Other compensation
iii. Personnel benefit contributions
iv. Other personal benefits
2. Maintenance and other expenses
i. Traveling expenses
ii. Training and scholarship expenses
iii. Supplies and material expenses
iv. Utility expenses
v. Communication expenses
vi. Awards/rewards, prizes and indemnities
vii. Survey, research, exploration, and development expenses
viii. Generation, transmission, and distribution expenses
ix. Confidential, intelligence, and extraordinary expenses
x. Professional services
xi. General services
xii. Repairs and maintenance
xiii. Financial assistance/subsidy
xiv. Taxes, insurance premiums, and other fees
xv. Labor and wages
xvi. Other maintenance and operating expenses
3. Financial expenses
i. Financial expenses
4. Direct costs
i. COGM
ii. Cost of sales
5. Non-cash expenses
i. Depreciation
ii. Amortization
iii. Impairment loss
iv. Losses
Questions:
Present your answers in a hand-written form. Take a picture of your answers through the CamScanner (CS)
application and convert it in PDF file. Once converted, upload this to our google classroom and mark as
done. Limit your answers to 2-5 sentences per question.

1. Discuss Why the Revised Chart of Accounts in COA Circular No. 2013.002 dated January 30, 2013
was created.

2. What are the five (5) classifications of expenses in the Revised Chart Of Accounts in COA Circular
No 2013-002 dated January 30, 2013? Give the Sub-major account group classifications.
 a. Personnel services ix. Confidential,
i. Salaries and wages intelligence, and
ii. Other compensation extraordinary
iii. Personnel benefit expenses
contributions x. Professional services
iv. Other personal xi. General services
benefits xii. Repairs and
b. Maintenance and other maintenance
expenses xiii. Financial
i. Traveling expenses assistance/subsidy
ii. Training and xiv. Taxes, insurance
scholarship expenses premiums, and other
iii. Supplies and material fees
expenses xv. Labor and wages
iv. Utility expenses xvi. Other maintenance
v. Communication and operating
expenses expenses
vi. Awards/rewards, c. Financial expenses
prizes and indemnities i. Financial expenses
vii. Survey, research, d. Direct costs
exploration, and i. COGM
development ii. Cost of sales
expenses e. Non-cash expenses
viii. Generation, i. Depreciation
transmission, and ii. Amortization
distribution expenses iii. Impairment loss
iv. Losses

3. Enumerate the five (5) account code structure of the Revised Chart of Accounts
consisting of eight (8) mandatory digits. Explain briefly.
It provides that the account code structure consists of eight (8) mandatory digits as
follows: Account Group, Major Account Group, Sub-Major Account Group, General
Ledger Accounts, General Ledger Contra-Accounts

 The Account Group represents the accounts classification as to Assets, Liabilities

Equity Income and Expenses.
 The Major Account group represents classification within the account group;
example: for Asset major accounts- Cash and Cash Equivalents, Investments,
Receivables, etc.
 Sub-Major Account group represents classification within the major e.g. for Cash
and Cash Equivalent: Cash on Hand, Cash in Bank-Local Currency, Cash in
Bank-Foreign Currency, etc.
 The General Ledger accounts represent the accounts to be presented in the
detailed financial statements, e.g. Cash-Collecting Officer, Petty Cash, etc. This is
Composed of segments. The first two digits from the left is the general ledger
 code, and the last digit is reserved for contra accounts like, Allowance for
Impairment, Accumulated Depreciation, etc.

4. Enumerate and explain briefly the elements of Financial Statements. per COA Circular
No.2013-002.
Assets — economic resources of an agency that are recognized and measured in
conformity with generally accepted accounting principles. Any owned physical object
(tangible) or right (intangible) with economic value that is expressed, for accounting
purposes, in terms of its cost or some other value. These other values include revalued
amounts, current cost, net realizable value, fair value and recoverable amounts.

Liabilities --- economic obligations of an agency that are recognized and measured in
conformity with accounting principles. Also include certain deferred credits that are not
obligations, but which are nonetheless recognized and measured according to accounting
principles as outlined in Philippine Public Sector Accounting Standards.

Equity ---- residual interest of the government in an agency which is the excess of the
agency's assets over its liabilities.

Income---- the gross inflow of economic benefits or service potential during the reporting
period, when those inflows result in an increase in net assets/equity, other than increases
relating to contributions from owners. The term "income" is broader that revenue and
includes gains in addition to revenue.

Expenses —refer to decrease in economic benefits or service potential during the

reporting period in the form of outflows or consumption of assets or incurrence of
liabilities that result in decrease in net assets/equity, other than those relating to
distributions to owners.