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(Purchase ( Other Supplier)

1. After the conduct of bidding/canvass, the purchase will be awarded to the lowest bidder/supplier

after a demo is being conducted and a Purchase Order is being prepared to be signed b both the

agenc and supplier.

!. "pon deliver of the e#uipment, obligate the amount, P1$%,%%%, for the purchase of e#uipment to

an outside supplier supported b the PO and posted to the registr under the obligation column for

&OO'.

. o record the deliver and acceptance of the delivered e#uipment.

1%*%$%!% Office '#uipment P1$%,%%%

!%!%1%1% +ue to - *,!$%

!%1%1%1% Accounts Paable 1,0$%

. o record pament of office e#uipment

!%1%1%1% Accounts Paable 1,0$%

1%1%%% ash 2 &+S, egular 1,0$%

$. o record remittance to - supported with approved A.

1%1%%0% ash 3 A *,!$%

%%1%1% Subsid from 4ational 5overnment *,!$% o recogni6e constructive receipt of 4A for A.

!%!%1%1% +ue to - *,!$% 1%1%%0% ash 2 A *,!$%

o record remittance of ta7es withheld to -

hrough A.

( If the purchase was charged to a trust account and not come from an NCA when paid,

No obligation is necessary and payment shall be charged to the cash in bank- lcca account)

8. . he agenc received their bills of the following9

P:+ P 1!,%%%

;ater $,%%% 'lectricit 1

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1!. o record the turn3over and acceptance of the building e7tension9 ontract amount P0,$%%,%%%

:ess9 :i#uidating damages $$,%%%

4et cost P0,$,%%%

CCCCCCCC

1%*%%1% uilding 0,$,%%%

1%*1%%% onstruction in Progress 2 uilding

And Other Structures 0,$,%%%

1. onstructive eceipt of 4A for A

ash3a7 emittance Advice 1%1%%0% P *$1,

Subsid from 4ational 5overnment %%1%1% P *$1,

o recogni6e constructive receiptof 4A for A

1..o record remittance of withholding ta7es thru A.

!%!%1%1% +ue to - P*$1,

1%1%%0% ash3a7 emittance Advice P *$1,

1. o record receipt of 4A for deposited performance bond.

1%1%%% ash 2 &+S, rust 0$,%%%

1%1%%1% ash 2 reasur/Agenc deposit 0$,%%%

1. o record release of performance bond9 !%%1%% 5uarant/Securit +eposits Paable 0$,%%%

1%1%%% ash 2 &+S, rust 0$,%%%

1$. efund of retention fees to contractor9!%%1%% 5uarant/Securit +eposits Paable 0,$%%

1%1%%% ash 2 &+S, egular 0,$%%

Illustrative Accounting Entries for Remittance of Taxes ithheld through TRA

Particulars Account ode +ebit redit

A. Agenc ooDs 1. onstructive eceipt of 4A for A

ash3a7 emittance Advice 1%1%%0% P $,%%%

Subsid from 4ational 5overnment %%1%1% P $,%%% o recogni6e constructive receipt of 4A for A

!Eemittance of ta7es withheld through A

+ue to - !%!%1%1% P $,%%%

ash3a7 emittance Advice 1%1%%0% P $,%%% o recogni6e remittance of ta7es

withheld through A

. - ooDs

1. onstructive eceipt of a7 evenue through A from the 45As

ash3a7 emittance Advice 1%1%%0% P $,%%% -ncome a7 %1%1%1% P $,%%%

o recogni6e constructive receipt

of ta7 revenue based on the A receivedfrom the agenc

. r ooDs 1. onstructive "tili6ation of 4A for A b the remitting 45As

Subsid to 45As $%!1%1% P $,%%%

ash3a7 emittance Advice 1%1%%0% P $,%%% o recogni6e remittance of ta7es withheld

b the agenc based on the A received.

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!epreciation"

PP' graduall loses its abilit to provide service over the course of time. ecause of this, its cost needs to be distributed on a sstematic basis over its useful life. he allocated cost is referred to as depreciation. he

depreciation charge for each period shall be recogni6ed as e7pense unless it is included in the carring amount

of another asset. 8or e7ample, the depreciation of manufacturing plant and e#uipment is included in the costsof conversion of inventories. Similarl, depreciation of PP' used for development activities ma be included in

the cost of an intangible asset recogni6ed.

he following are policies regarding depreciation of PP'9 a. here are three factors an entit must consider in determining depreciation9

1. -nitial cost,

!. "seful life, and . '7pected residual value at the end of its useful life.

b. '7cept for land and not recogni6ed heritage assets, all PP' shall be depreciated.

c..+epreciation of an asset begins when it is available for use such as when it is in the location

and condition necessar for it to be capable of operating in the manner intended bmanagement. 8or simplicit and to avoid proportionate computation, depreciation shall be

for one month if the PP' is available for use on or before the 1$th of the month. ?owever,if the PP' is available for use after the 1$th of the month, depreciation shall be for the

succeeding month.

d.. +epreciation of an asset ceases when the asset is derecogni6ed. herefore, depreciation does not

cease when the asset becomes idle or is retired from active use and held for disposal unless the asset

is full depreciated.

e..A residual value e#uivalent to at least five percent ($@) of the cost shall be adopted unlessa more appropriate percentage is determined b the entit based on its operation sub>ect to

the approval of OA. 5enerall, infrastructure assets have no residual value. -n case, the

residual value of parts of the infrastructure assets can be determined, the polic of at leastfive percent ($@) of the cost of that part shall be applied.

f. he computation of monthl depreciation e7pense shall be as follows9

+epreciation '7pense C ost 2 esidual Falue

'stimated "seful :ife (in months)

l. +epreciation shall be recogni6ed as a debit to the G+epreciation '7penseH account and a credit to

the GAccumulated +epreciationH account. Accumulated +epreciation is a contra3asset account

presented in the 8S as deduction from the related asset account. +epreciation e7pense shall be

recogni6ed on a monthl basis.

'7ample9 On une $, !%1, an office e#uipment was purchased at P!!,%%% and has an estimated

useful life of $ ears and $@ residual value. Said e#uipment was available for use on

une !%, !%1.

&onthl +epreciation C P !!,%%% 2 P 1,1%% C P

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BANK RECONCILIATION STATEMENT - the preparation of the banD reconciliation statements for

Gashin anDH and Gash3&odified +isbursement Sstem (&+S)H accounts including the

proposed ad>usting entries.!efinition of Terms#

Bank Charges 2charges imposed b the banD for various services rendered e7cluding interest charges. his also includes cost of checDbooDs, penalties and surcharges on overdrafts.

Bank Reconciliaion 2 settlement of differences contained in the banD statement and the cash account

in the agencIs/entitIs booDs of accounts. Bank !ae"en 2 reflects the transactions in the agencIs/entitIs (depositorIs) banD account for a

period such as deposits made to the account as well as checDs/A+As drawn on the

account, banD charges, returned items, etc.

Cancele# Check$& 2 checDs/A+As issued and chargeable to the agenc banD account but was latervoided due to e7piration of validit, and other valid reasons.

Cre#i 'e"oran#u" 2 document issued b the banD informing an increase in the depositorIs

(AgencIs/'ntitIs) account, such as previous banD debit errors and collection directldeposited to the agencIs/entitIs banD account.

&e(i 'e"oran#u" 2 document issued b the banD informing a decrease in the account, such as previous banD credit errors or service charges and fees.

&eosis*in*+ransi 2 are amounts of agenc/entit deposits in the banD but which are et to be recorded b the banD until the ne7t period. hese usuall pertain to late deposits in the last da of business for a period.

ase# -Cs . 4As which are no longer valid or its validit has e7pired but remain unad>usted b the banD

or the agenc/entit.

-oice o/ Cash llocaion . authorit issued b the +& to central, regional and provincial offices and

operating units to cover the cash re#uirements of the agenc/entit. usan#ing Checks 2 checDs the agenc/entit has issued and recogni6ed but which have not been presented to

the banD for pament.

Reurne# Check 2 a checD returned b the banD due to errors or deficiencies in the maDerIs or agencIs/entitIs

account.

nrecor#e# &eosis 2 are collections of the agenc/entit which are directl deposited b the debtor/client to

the banD account of the agenc/entit but remain unrecorded b the agenc/entit as at the period

under reconciliation.

$b%ectives" he anD econciliation Statement (S) shall be prepared in order to9

a. checD correctness of both the banDIs and agencIs/entitIs records,

b. serve as a deterrent to fraud, and

c. enable the agenc/entit or banD to taDe up charges or credits recogni6ed b the banD oragenc/entit but not et Dnown to the agenc/entit or banD.

his shall be used in the reconciliation of banD and treasur accounts maintained with5overnment Servicing anD (5S).

&ethod of 'an Reconciliation. he monthl S shall be prepared b the hief Accountant/designated staff for each of the banD accounts maintained b the agenc/entit using the

Ad>usted alance &ethod. "nder this method, the booD balance and the banD balance are

brought to an ad>usted cash balance that must appear on the Statement of 8inancial Position.

Illustrative Accounting Entries for Ad%ustments in the 'an Reconciliation tatement for *+ash

&odified !isbursement ystem (&!)- accounts"

he illustrative accounting entries for the ad>ustments are as follows9

a nrecognie#$n#ersae"en o/ -C /or regular an# secial accoun ih allo"en release or#er

Account itle Account ode +ebit redit ash3 &+S, egular 1%1%%% 777

or ash3 &+S, Special Account 1%1%%$% 777

or ash3 &+S, rust 1%1%%*% 777 Subsid from 4ational 5overnment %%1%1% 777

(nrecognie#$n#ersae"en o/ -C /or secial accoun ihou allo"en release or#er an#

rus accoun

ash3 &+S, Special Account 1%1%%% 777

or ash3 &+S, rust 1%1%%$% 777

ash3reasur/Agenc +eposit,or Special Account 1%1%%!% 777

ash3reasur/Agenc +eposit, rust 1%1%%% 777

c Cancelle# '&! checks$&s ihou inenion o relace)

ash3 &+S, egular 1%1%%% 777

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or ash3 &+S, rust 1%1%%*% 777 '7penses or other appropriate account 77777777 777

# n#ersae"en o/ 6Cash in Bank accoun #ue o erroneous recor#ing o/ a"oun o/ checks issue#

ash3 &+S, egular 1%1%%% 777


or ash3 &+S, rust 1%1%%*% 777 Accounts Paable or Other :iabilities 77777777 777

e. ase# -C or unuse# -C a 8earen# 9or regular an# secial accoun ih allo"en release

r#er)

Subsid from 4ational 5overnment %%1%1% 777

ash3 &+S, egular 1%1%%% 777 or ash3 &+S, Special Account 1%1%%$% 777

9or secial accoun ihou allo"en release or#er an# rus accoun

ash3reasur/Agenc +eposit, Special Account 1%1%%!% 777

or ash3reasur/Agenc +eposit, rust 1%1%%% 777

ash3 &+S, egular 1%1%%% 777 or ash3 &+S, Special Account 1%1%%$% 777

/ :ersae"en o/ 6Cash in Bank accoun #ue o erroneous recor#ing o/ he a"oun o/ checks issue#

'7penses or Accounts Paable or Other :iabilities 77777777 777

ash3 &+S, egular 1%1%%% 777


or ash3 &+S, rust 1%1%%*% 777

g :ersae"en o/ 6Cash in Bank accoun #ue o erroneous recor#ing o/ he a"oun o/ -C recei:e# 9or regular an# secial accoun ih allo"en release or#er

Subsid from 4ational 5overnment %%1%1% 777 ash3 &+S, egular 1%1%%% 777

or ash3 &+S, Special Account 10104050 xxx

For special account without allotment release order and trust account ash3reasur/Agenc +eposit, Special Account 1%1%%!% 777

Or ash3reasur/Agenc +eposit, rust 1%1%%% 777 ash3 MDS, Regular 10104040 xxxOr ash3 &+S, Special Account 1%1%%$% 777

h Bank Charges

anD harges or an appropriate Account 77777777 777 ash3 &+S, egular 1%1%%% 777


or ash3 &+S, rust 1%1%%*% 777

.reparation and ubmission of $ther Reports. -n addition to the set of financial statements, the following reports/schedules/statements shall be

submitted to 5AS, OA9 a. Pre3losing rial alances

b. Post3losing

c. Other schedules 1. egional reaDdown of -ncome

!. egional reaDdown of '7penses

Trial 'alance" -s a list of all the 5: accounts and their balances at a given time. he accounts are listed

in the order in which the appear in the A, with the debit balances in the left column and the

credit balances in the right column.

a. he shows the e#ualit of debit and credit balances of all 5: accounts as at a given period.

-t is prepared and submitted monthl, #uarterl and annuall. At the end of the fiscal ear, the

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pre3closing and the post3closing trial balances shall be prepared.

b. he is prepared to9 1. Prove the mathematical e#ualit of the debits and credits after postingB

!. hecD the accurac of the postingsB

. "ncover errors in >ournali6ing and postingB and . Serve as basis for the preparation of the financial statements.

.re+losing Trial 'alance" he Pre3losing rial alance shall be prepared after posting the A' in the 5 and the same

to the 5:. -t shows the ad>usted balances of all accounts as at a given period. his is also described or termed as theAd>usted rial alance. he shall be supported with the schedule of S: balances of the controlling accounts.

Ad%usting /ournal Entries. Ad>usting >ournal entries are made at the end of an accounting period to allocate revenue and

e7penses to the period in which the actuall occurred. A's are re#uired ever time a financial statement is prepared to

maDe the statement trul reflective of the financial condition of the entit at a given period. Ad>ustments are of two main

tpes9

a. Accrued items

b. +eferred items

$ther Ad%ustments" he following ad>ustments shall also be made (if applicable) for fair presentation of the results of

operation of the entit in the financial statements9

a. "nused 4A (4ational) b. Pett ash 8undc. "nreleased ommercial hecDs

d. Allowance for/Accumulated -mpairment :osses of asset accounts

e. ;rite3down of -nventories

f. orrection/eclassification 'ntries

g. Ad>ustment for reversal of -mpairment :osses

h. +epreciation '7pense

i. '7change differences on foreign currenc

>. Other ad>ustments

Ad%ustment for Accrued Items. -t is an ad>usting entr for an economic activit alread undertaDen but not et

recogni6ed into asset and revenue accounts or liabilit and e7pense accounts. -t re#uires asset/revenue ad>ustments and

liabilit/e7pense ad>ustments.

a. sse$Re:enue #;us"en . -t involves earned revenues not et recogni6ed as assets and income at the end of the

accounting period. '7amples are receivables for revenues alread earned but not et collected nor billed as at the ear3

end. he ad>usting >ournal entr are as follows9

Account itle Account ode +ebit redit

-nterest eceivable 1%%1%$% 777 -nterest -ncome %!%!!1% 777

o recogni6e interest income alread earned

b. ia(ili8$

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is earned, an ad>usting >ournal entr is made at the end of each period to transfer the appropriate amount from the liabilit

account to revenue account. his ad>ustment reflects the fact that all or part of the entitJs obligation to its customers has

been fulfilled and that revenue has been reali6ed.

Original 'ntr9

ash3 &+S, egular 1%1%%% P 1,%%%

Other "nearned evenue !%$%!==% P 1,%%%

Ad>usting ournal 'ntr9

Other "nearned evenue !%$%!==% P =%% Other Service -ncome %!%1==% P =%%

.etty +ash 0und Ad%ustments. At the end of the ear, all unreplenished Pett ash 8und e7penses shall be reported and

supporting papers submitted to the Accounting +ivision/"nit, to recogni6e the e7penses incurred to the period to which

the relate. -n case no replenishment could be made for lacD of fund, a 'F shall be prepared to recogni6e all the e7penses

paid under the Pett ash with a credit to the account GPett ashH. -f replenishment is made, the credit shall be the

appropriate cash account.

Reversion of 1nused 2otice of +ash Allocation. 8or 45As receiving subsidies from the national government in theform of 4A, ad>usting >ournal entr shall be made for the reversion of the unused or unutili6ed 4A at the end of the

accounting period. he entr for lapsed regular 4A and those issued for the pament of accounts paable/retirement

gratuit/terminal leave, shall be9

Subsid from 4ational 5overnment %%1%1% P 1%,%%%

ash3 &+S, egular 1%1%%% P 1%,%%%

8or unused 4A issued for the release of performance/bidders/bail bonds, which were deposited with the 4ational

reasur, a 'F shall be drawn with debit to account Gash3reasur/Agenc +eposit, rustH and credit to account Gash3

&odified +isbursement Sstem (&+S), rust.H

Ad%ustments for 1nreleased +ommercial +hecs. A Schedule of "nreleased ommercial hecDs shall be prepared b

the ashier for submission to the Accounting +ivision/"nit. All unreleased checDs at the end of the ear shall be reverted bacD to the cash accounts. A 'F shall be prepared to recogni6e the restoration of the cash e#uivalent to the unreleased

checDs and the recognition of the appropriate liabilit/paable account. heaccounting entr for the restoration of the unreleased checD to the cash account shall be a debit to Gash in anD, :ocal

urrenc urrentH account with credit to the appropriate liabilit account. here shall be no phsical cancellation of the

checDs. he 'F supporting such restoration shall form part of the supporting document to the financial statements to be

submitted to OA at ear end At the start of the ensuing ear, another 'F shall be drawn to reverse the previous entr

made and recogni6e the availabilit of the checDs for release. his procedure shall not appl to account Gash3&odified

+isbursement Sstem (&+S)H since there is no actual cash with the

5Ss.

+losing /ournal Entries. losing >ournal entries are entries which close out the balances of all nominal or temporar

and intermediate accounts at the end of the ear. he closure will reduce the balance of those accounts to 6ero. he

nominal and intermediate accounts that shall be closed at the end of the ear are as follows9

a. alance of all revenue accounts to the Gevenue and '7pense SummarH accountB b. alance of all e7pense accounts to the Gevenue and '7pense SummarH accountB

c. alance of the Gevenue and '7pense SummarH to the GAccumulated Surplus/(+eficit)H accountB

d. alance of all Gash3reasur/Agenc +eposit, egularH to the GAccumulated Surplus/(+eficit)H

accountB and

e. Other losing 'ntries.

8or the purpose of preparing the financial statements for the first, second and third #uarters, the closing entries shall be

prepared, but shall not be recorded in the booDs of accounts.

.ost+losing Trial 'alance. he Post3losing rial alance shall be prepared at the end of the ear after preparing and

posting the closing >ournal entries in the 5 and posting to the 5:. Since revenue and e7pense accounts have been closed

out, the onl accounts with balances are balance sheet or real accounts.

Documents

518 hand-outs 6.doc