Chapter 1
Chapter 1
Chapter 1
including GOCCs
COMMISSION ON AUDIT
keeps the general accounts of the government,
promulgates accounting rules and regulations
and submits to the President and Congress,
within the time fixed by law (not later than last
day of September of each year)
*Authority:
- define scope
- establish techniques
- promulgates rules and regulations
- NO longer journalizes appropriation &
allotment by DBM
Q.: WHAT IS THE LEGAL BASIS
OF THE COMMISSION ON AUDIT
IN PRESCRIBING THE NGAS?
a. Presidential Decree 1445
b. COA Circular No. 2002 001
c. The Constitution of the Republic
d. PD 1445 and the Constitution
DEPARTMENT OF BUDGET &
MANAGEMENT
shall be responsible for the formulation
and implementation of the national budget
with the goal of attaining the republics
national socio-economic plans and
objectives.
meet needs
OTHER GOVT AGENCIES &
GOCCs
Journalize Notice of Cash allocation (NCA)
No longer journalize share in income of
national govt
Maintain registries for allotments:
-Registry of allotments & obligations
personal services (RAOPS)
-RAO Maintenance & Operating
Expenses (RAOMO)
-RAO- Capital Outlay (RAOCO)
-RAO- Financial Expenses (RAOFE)
Q.: Which is not charged
with the government
accounting responsibility?
a. Upper and lower legislative houses
b. Department of Budget and Management
GOCCs
d. Commission on Audit
Q.: The following are the
objectives of NGAS, which is
NOT:
a. To generate periodic and relevant
financial reports for better monitoring or
performance.
b. To simplify government accounting.
c. To conform to IAS.
ACCOUNTING
ONE FUND CONCEPT
CODES
RESPONSIBILITY ACCOUNTING
BOOKS OF ACCOUNTS
FINANCIAL STATEMENTS
FEATURES OF THE NGAS
TWO- MONEY COLUMN TRIAL BALANCE
ALLOTMENT AND OBLIGATION -
NOTICE OF CASH ALLOCATION
FINANCIAL EXPENSES
PERPETUAL INVENTORY OF SUPPLIES &
MATERIALS
MAINTENANCE OF LEDGER CARDS FOR
SUPPLIES, PROPERTY, PLANT &
EQUIPMENT
FEATURES OF THE NGAS
CONSTRUCTION OF ASSETS -
REGISTRY OF PUBLIC INFRASTRUCTURES -
REGISTRY OF REFORESTATION PROJECTS -
DEPRECIATION
RECLASSIFICATION OF ASSETS
RECOGNITION OF LIABILITY
ELIMINATION OF CONTINGENT ACCOUNTS
INTEREST ACCRUAL
FEATURES OF THE NGAS
ACCOUNTING FOR BORROWINGS AND
LOANS-
PETTY CASH FUND AND
FOREIGN CURRENCY ADJUSTMENTS
ACCOUNTING METHODS
Modified accrual basis shall be used all
expenses shall be recognized when
incurred . Income shall be recognized on
accrual basis except in case of taxes, it is
difficult to determine how much and from
whom to collect, so cash basis is observed.
fund
All money collected by the agency is treated as
special fund
Under NGAS (starting Jan 1, 2002) one fund
concept
General fund is available for all functions of govt
Entry:
Cash-National Treasury, Modified Disbursement System
XX
Subsidy Income from National Government XX
FINANCIAL EXPENSES
Includes bank charges, interest expense,
committment charges, documentary
stamps and other related expenses.
This was removed from maintenance
and other operating expenses account.
OLD:
recognized under Maintenance and other
operating expenses (MOE)
PERPETUAL INVENTORY OF
SUPPLIES & 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 charged directly
to the appropriate expense accounts.
PERPETUAL INVENTORY OF
SUPPLIES & MATERIALS
Valuation of Inventory
- Cost of ending inventory of supplies
and materials shall be computed using
the moving average method.
MAINTENANCE OF SUPPLIES AND
PROPERTY, PLANT AND EQUIPMENT
LEDGER CARDS
For check and balance, property
custodians or accounting units of agency
are required to maintain hard copies of
these assets
This is classified by category of ppe.
CONSTRUCTION OF ASSETS
Construction Period Theory is applied for
costing purposes
Bonus paid to contractor is added to
cost.
Liquidated damages due from contractor
is deducted from project cost
REGISTRY OF PUBLIC INFRASTRUCTURE
AND REGISTRY OF REFORESTATION
PROJECTS
This applies to public goods roads,bridges, waterways,
railways, plaza, monuments, etc. (By the DPWH, other GOCCs)
Also for the reforestation projects (by the DENR, other GOCCs)
Examples:
Registry of Public Infrastructure-Bridges (RPIB)
Registry of Public Infrastructure-Roads(RPIR)
Registry of Public Infrastructure-Parks (RPIP)
DEPRECIATION
A variety of depreciation methods can be used:
Straight line method
Diminishing balance method
Units of productionmethod
Starts on the 2nd month after purchase
10% of purchase cost=residual value
Interest income
those earned on deposits with banks,
loans and investment bonds, treasury
notes, treasury bill and promissory notes
held
INTEREST ACCRUAL
Interest expense
to record charges imposed as a
consequence on use of money belonging
to other, such us interest in bonds,
certificates of indebtedness, treasury
bills, treasury notes
ACCOUNTING FOR LOANS AND
BORROWINGS
All loans and borrowings shall be recorded under
appropriate liability accounts
a) Loans Payable long term, Domestic
- used to record long term indebtedness (in cash or in
kind) from domestic creditors evidenced by a contract or an
agreement
JE:
Loans Payable Long term, Domestic XX
Cash XX
To record the payment for a liability account.
ACCOUNTING FOR LOANS AND
BORROWINGS
b) Loans Payable long term, Foreign
- used to record long term indebtedness (in cash or
in kind) from foreign governments or international
financial institutions evidenced by a contract or an
agreement
JE:
Loans Payable Long term, Foreign XX
Cash XX
To record the payment for a liability account.
PETTY CASH FUND
For paying small or miscellaneous but
authorized expenditures not conveniently
paid by check voucher.
Under Imprest system
All replenishments shall be directly charged
to the expense account
PCF shall be equal to total Cash on Hand and
the unreplenished expenses
Shall not be used to purchase regular
inventory/items for stock
PETTY CASH FUND
To Set up Petty Cash:
Petty Cash fund XX
Cash National treasury XX
To record replenishments:
Office supplies expense XX
Traveling Expenses XX
Cash National Treasury MDS XX
To record the Liquidation of expenses:
Office Supplies Expenses XX
Traveling Expense Local XX
Petty Cash Fund XX
To record unused PCF:
Cash Collecting Officer XX
Petty Cash Fund XX
FOREIGN CURRENCY
ADJUSTMENT
Cash deposits by the government in
foreign currency will be computed at the
exchange rate set by the Bangko Sentral
as of balance sheet date
FOREIGN CURRENCY
ADJUSTMENT
Each month, any gain or loss from
foreign exchange transactions is
computed and recognized in the books
For foreign currency liability, it is to be
expressed both in foreign and local
currency.