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3 - Chapter-3-Govt Accounting Process - Part 2

Entity A receives an appropriation of P1,000,000 and allotment of P960,000 to begin the government accounting cycle. It incurs P700,000 in obligations. Entity A receives a Notice of Cash Allocation of P625,000, including P600,000 for the current year and P25,000 for prior year accounts payable and obligations. It makes various disbursements, including P218,000 in net pay to employees after deducting taxes and contributions to government agencies. Adjusting and closing entries are also made.

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100 views6 pages

3 - Chapter-3-Govt Accounting Process - Part 2

Entity A receives an appropriation of P1,000,000 and allotment of P960,000 to begin the government accounting cycle. It incurs P700,000 in obligations. Entity A receives a Notice of Cash Allocation of P625,000, including P600,000 for the current year and P25,000 for prior year accounts payable and obligations. It makes various disbursements, including P218,000 in net pay to employees after deducting taxes and contributions to government agencies. Adjusting and closing entries are also made.

Uploaded by

Joebet Debuyan
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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The Government

Accounting Cycle
1. Appropriation
2. Allotment
3. Incurrence of Obligation
4. Disbursement Authority (NCA)
5. Disbursement
6. Billings, Collections & Remittances
7. Unadjusted Trial Balance
8. Adjusting entries
9. Closing Entries
10. Preparation of FS
Consider Entity’s A beginning Trial Balance
Accounts Dr Cr
Cash-Collecting Officer 5,000  
Accounts Receivable 45,000  
Buildings 500,000  
Accumulated Depreciation-Buildings   150,000
Office Equipment 150,000  
Accmulated Depreciation-Office Equipment   60,000
Accounts Payable   20,000
Accumulated Surplus   470,000
Totals 700,000 700,000

Notes:

a) The P20,000 A/P pertains to office equipment purchased in the prior year that were already delivered but not yet paid.

b) An additional purchase of office supplies worth P5,000 is not yet recorded in the acounting books because they are not yet delivered.
c) The PY "obligation" is described in the registries as "Not yet due and demandable obligation."
1. Appropriation
Entity A receives its GAA amounting to P1,000,000

The appropriation is posted (recorded) in the Registry of Appropriations and


Allotments (RAPAL)

2. Allotment

Entity A receives its allotment amounting to P960,000 (SARO)

The allotment is posted (recorded) in the Registry of Appropriation & allotments


(RAPAL) and Registries of Allotments, Obligations and Disbursement (RAOD)
3. Incurrence of Obligation
Entity A incurs obligations amounting to P700,000

The obligation are recorded in the Obligation Request and Status (ORS) documents and
Registries of Allotments, Obligations and Disbursement (RAOD)

4. Disbursement Authority -NCA


Entity A receives the following NCA, net of tax

a. For Current Year's appropriation - P600,000

b. For PYs A/P and not yet due and demandable obligations - P25,000

J/E Cash-Modified Disbursement System (MDS), Regular 625,000  


Subsidy from National Government   625,000

To recognize receipt of NCA from the DBM    


(The NCA is posted in the Registry of Allotments and NCA
(RANCA)
5. Disbursement
  5.1. Personnel Services (PS)        
   
a) Set up of payable to officers and employees upon
  approval of payroll  
   
  Salaries & Wages 200,000  
Personnel Economic Relief Assistance
  (PERA) 50,000  
  Gross Compensation 250,000  
  W/tax - 20,000  
  GSIS - 9,000  
  Pag-Ibig - 2,000
  Philhealth - 1,000  
  Total Deductions - 32,000  
  Net Pay 218,000  
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