The Government

Accounting Process
Government
Government Accounting
Accounting
Process
Process
analyzing
recording
classifying
summarizing
communicati ng
 JOURNAL
BOOKS
BOOKS OF
OF ACCOUNTS
ACCOUNTS AND
AND
S LEDGER
REGISTRIES
REGISTRIES

S
REGISTRIES
 Books
Books of
of Accounts
Accounts and
and
Registries
Registries
General Journal Cash Disbursements Journal
JOURNALS
Cash Receipts Check Disbursements Journal

LEDGERS General Ledgers Subsidiary Ledgers

Registries of Revenue and Other Receipts

Registry of Appropriations and Allotments

REGISTRI Disbursemen
Registries of Allotments, Obligations and Disbursement
ES Registries of Budget, Utilization and Disbursements
egistries of Budget, Utilization and Disbursements
OBJECT OF EXPENDITURES

Personnel Services (PS)

- pertains to all types of employee benefits (e.g., salaries, bonuses, allowances, cash gifts, etc.)

Maintenance and Other Operating Expenses (MOOE)

- pertain to various operating expenses other than employee benefits and financial expenses
(e.g., travel, utilities, supplies, etc.)

Financial Expenses (FE)

- pertain to finance cost and also include losses on foreign exchange transactions (e.g., interest
expense, bank charges, etc.)

C a p i t a l O u t l ay s ( C O )
- pertain to capitalizable expenditures (e.g., expenditures on the construction of public
infrastructures, acquisition cost of equipment,etc.)
JOURNA LEDGER REGISTR
LS S IES
Accounting Accounting
Budget Records
Records Records

Accounting Unit Accounting Unit Budget Division

BASIC RECORDINGS
APPROPRIATION
Entity A (a government agency) receives its GAA
consisting of the (PS)
Personnel Services following: 100,000
Maintenance and Other Operating Expense (MOOE) 60,000
Financial Expenses (FE) -
Capital Outlays (CO) 200,000
Total appropriation for the current year 20x1 360,000

RECOR
DED

Registry of Appropriations and Allotments (RAPAL)

ALLOTMENT
Entity A receives its allotment from the DBM
consisting of the (PS)
Personnel Services following: 90,000
Maintenance and Other Operating Expense (MOOE) 40,000
Financial Expenses (FE) -
Capital Outlays (CO) 170,000
Total appropriation for the current year 20x1 300,000

RECOR
DED

Registry of Appropriations and Allotments (RAPAL)

ALLOTMENT RECOR
DED

Registry of Allotments, Obligations and Disbursements (RAOD)

ALLOTMENT RECOR
DED

Registry of Allotments, Obligations and Disbursements (RAOD)

ALLOTMENT RECOR
DED

Registry of Allotments, Obligations and Disbursements (RAOD)

Incurrence of Obligation
Obligation Request and
Status (ORS)

REQUESTING
OFFICE
OBLIGATION REQUEST AND STATUS

Entity A enters into the

following contracts:
Personnel Services – Employment
contracts (Job Order) 70,000
Maintenance and Other Operating
Services – Purchase contract for 25,000
office supplies
Capital Outlays – Purchase contract 160,00
for office equipment 0

ORS is
prepared
as follows:
 The“obligations”
The “obligations”are
are
recorderininthe
recorder theRegistries
Registriesofof
Allotments,Obligations
Allotments, Obligationsand
and
Disbursements (RAOD)
Disbursements (RAOD) as as
follows:
follows:
Notice of Obligation Request and
Status Adjustment (NORSA)
sbursement Authority – Notice of Cash Allocation (N
Entity A receives Notice of Cash Allocation (NCA) from the DBM
amounting to P200,000, net of tax. The entry is as follows:

Date Cash-Modified Disbursement System (MDS), Regular 200,000

Subsidy from National Government 200,000
To recognize receipt of NCA from DBM
 The registries used to monitor the NCA are the
following:
REGISTRY OF ALLOTMENTS REGISTRY OF ALLOTMENT
AND NOTICE OF CASH AND NOTICE OF TRANSFER
ALLOCATION (RANCA) OF ALLOCATION (RANTA)

used to determine the used to determine the

amount of allotments amount of allotments
not covered by NCA not covered by Notice
and to monitor the of Transfer of
available balance of Allocation and to
NCA monitor the available
balance of NTA.
The NCA is posted (recorded) in the
RANCA as follow:

*refer to page 61
JOURNAL
S
General Journal Special Journals
Cash Receipts
used
used to
to record
record Journal
Report of Collection and Deposit (RCD)
Report of Collection and Deposit (RCD)
transactions
transactions
not
notrecorded
recordedinin
Cash Receipts Register
(CRReg)
the
the Special
Special
Cash Disbursement
Journal
Journals
Journals
Check Disbursement
Journal
LEDGER
S
General Ledger Subsidiary Ledgers

summarizes
summarizesall
all show
showdetails
detailsof
ofeach
each
transactions
transactionsrecorded
recorded control
controlaccount
accountininthe
the
ininthe
thejournals.
journals. general
generalledger
ledger
 Sincethe
Since thereceipt
receiptofofthe
theNCA
NCAdoes
doesnot
notconstitute
constituteaacollection
collection
thatisisrecordable
that recordableininthe
theCash
CashReceipts
ReceiptsJournal,
Journal,ititisisrecorded
recorded
ininthe
theGeneral
GeneralJournal
Journalas asfollows:
follows:
 Thejournal
The journalentry
entryfor
forthe
theNCA
NCAisisposted
postedto
tothe
thegeneral
general
ledgeras
ledger asfollows:
follows:
 DISBURSEMENT
DISBURSEMENT Employees have
Employees have rendered
rendered services
services
andare
and arenow
nowentitled
entitledtotocompensation
compensation
a. Set up of payable to DA Salaries and Wages , Regular 35,000
officers and employees TE
Personal Economic Relief Allowance 5,000
upon approval of payroll.
Salaries and Wages 35,000
Due to BIR 10,000
Personal Economic Relief 5,000
Allowance (PERA) Due to GSIS 2,000
Gross Compensation 40,000 Due to pag-IBIG 2,000
Withholding tax (10,000) Due to PhilHealth 1,000
GSIS (2,000) Due to Officers and Employees 25,000
Pag-IBIG (2,000) To recognize payable to officers
and employees upon approval of
PhilHealth (1,000) payroll
Total Deductions (15,000)
NET 25,000
DISBURSEMENT
DISBURSEMENT b. Posting of payable to the
Section C of Obligation
Request and Status (ORS)
DISBURSEMENT
DISBURSEMENT c. Grant of Cash Advance for
payroll

DA Advances for payroll 25,000

TE
Cash-Modified Disbursement
System (MDS), Regular 25,000
To recognize grant of cash advance for
payroll
DISBURSEMENT
DISBURSEMENT
d. Posting of disbursement to
the payment column of Section
of C of the ORS and
disbursements column of the
RAOD
DISBURSEMENT
DISBURSEMENT e. Liquidation of Payroll fund

DA Due to Officers and Employees 25,000

TE
Advances for Payroll 25,000
To recognize liquidation of Payroll
Fund
 Remittanceof
Remittance ofAmounts
AmountsWithheld
Withheld

Entity A remits the P15,000 withheld to the

other government agencies. The breakdown is
re-provided below:
Withholding Tax 10,000
GSIS 2,000
Pag-IBIG 2,000
PhilHealth 1,000
Total Deductions 15,000
 Tax Remittance Advice (TRA)
Tax Remittance Advice (TRA)
In the books of government agencies, the
constructive remittance of taxes withheld to
the BIR or custom duties withheld to the
Bureau of Customs (BOC) and the constructive
receipt of NCA for those taxes and customs
In the books of BIR and BOC, the constructive
duties;
receipt of tax revenue and customs duties; and

In the books of BTr, the constructive receipt of

taxes and customs duties remitted.
 Remittanceof
Remittance ofAmounts
AmountsWithheld
Withheld

Books of Entity A
DAT Cash – Tax Remittance Advice 10,000
E
Subsidy from National Government 10,000
To recognize the constructive receipt of NCA
for TRA

DAT Due to BIR 10,000

E
Cash – Tax Remittance Advice 10,000
To recognize the constructive remittance of
taxes withheld to the BIR through TRA
 Remittanceof
Remittance ofAmounts
AmountsWithheld
Withheld

TRA recorded by the other government

agencies:
Books of BIR Books of BTr
Cash – TRA ……………10,000 Subsidy to NGAs……………10,000
Income Tax…………………10,000 Cash - TRA………………….……10,000
To recognize the constructive receipt of taxes To recognize the constructive receipt of
remitted by National Government Agencies remittance of taxes by NGAs through TRA
(NGAs) through TRA
 RemittancetotoGSIS,
Remittance GSIS,Pag-IBIG
Pag-IBIG&&PhilHealth
PhilHealth

DA Due to GSIS
TE
2,000
Due to Pag-IBIG 2,000
Due to PhilHealth 1,000
Cash – Modified Disbursement System (MDS), Regular 5,000
To recognize remittance to GSIS, Pag-IBIG and PhilHealth
 BILLINGS,COLLECTION
BILLINGS, COLLECTION&REMITTANCE
&REMITTANCE

a.a.Entity
EntityAAbills
billsrevenue
revenueofofP100,000
P100,000for
forrent
rentincome.
income.

DAT
E
Accounts Receivable 100,000
Rent/Lease Income 100,000
To recognize billing of income
BILLINGS,COLLECTION
BILLINGS, COLLECTION&REMITTANCE
&REMITTANCE
b.b. Entity
Entity AA collects
collects P100,000
P100,000 from
from the
the billed
billed revenue
revenue and
and remits
remits the
the
collection to the BTr.
collection to the BTr.
DAT
E
Cash – Collecting Officers 100,000
Accounts Receivable 100,000
To recognize collection of billed income

DAT
E Cash – Treasury/Agency Deposit, Regular 100,000
Cash – Collecting Officers 100,000
To recognize remittance of income to BTr
 Thebilling
The billingofofrevenue
revenueisisrecorded
recordedininthe
theGeneral
GeneralJournal
Journalwhile
whilethe
thecollection
collection
and remittance are recorded in the Cash Receipts as follows:
and remittance are recorded in the Cash Receipts as follows:

*INSERT CRJ PAGE 69

 Theunused
The unusedNCA
NCAisiscomputed
computedasasfollows:
follows:
Reversionof
Reversion of Cash- Modified
UnusedNotice
Unused Noticeof
of Disbursement System
(MDS), Regular
CashAllocation
Cash Allocation 200,000
25,000
5,000
170,000
DAT
E
Subsidy from National Government 170,000
Cash – Modified Disbursement System
170,000
(MDS), Regular
To recognize reversion of unused NCA
 Summaryof
Summary ofBasic
BasicRecordings:
Recordings:
Recording in:
TRANSACTION Registries & Other Records Journal & Ledger
Appropriation RAPAL None
RAPAL and appropriate
Allotment RAODs
None

Incurrence of Obligation ORS and appropriate RAODs None

Cash-MDS, Regular xx
NCA RANCA Subsidy from NG xx
Expense/Asset xx
Updating of ORS and Payable xx
Disbursements appropriate RAODs Payable xx
Cash-MDS, Regular xx
 Summaryof
Summary ofBasic
BasicRecordings:
Recordings:
Recording in:
TRANSACTION Registries & Other Records Journal & Ledger
Cash – TRA xx
Updating of ORS and Subsidy from NG xx
Tax Remittance Advice appropriate RAODs Due to BIR xx
Cash – TRA xx
Accounts Receivable xx
Cash – CO xx
Billings, Collections & RROR, RCD/CRReg
Cash – CO xx
Accounts Receivable xx
Remittances Cash – Treasury/Agency
Deposit, Regular xx
Cash – CO xx

Reversion of unused RANCA Subsidy from NG xx

Cash-MDS, Regular xx
NCA
 TheRevised
The RevisedChart
Chartof
ofAccounts
Accounts

Chartofofaccounts
Chart accounts- - aalist
listofofallallthe
theaccounts
accountsused
usedbybyananentity.
entity.

Government entities
Government entities shall
shall use
use the
the account
account titles
titles and
and account
account
codesininthe
codes RevisedChart
theRevised ChartofofAccounts
Accounts(RCA)
(RCA)issued
issuedbybythe
theCOA
COA
 Appropriation

Disbursement Authority Incurrence of

- NCA Obligation
Unadjusted
THE Disbursemen
Trial Balance
GOVERNME t
Billings, NT Preparation of
Collections & Financial
Remittances
ACCOUNTIN Statements
Closing Entries G CYCLE Adjusting
Entries
Allotmen
 Thetrial
The trialbalance
balanceofofEntity
EntityAA(a(agovernment
governmententity)
entity)
atatthe
thebeginning
beginningofofthe
theperiod
periodisisshown
shownbelow:
below:

Accounts Debit Credit

Cash – Collecting Officers 5,000
Accounts Receivable 45,000
Buildings 500,000
Accumulated Depreciation – Buildings 150,000
Office Equipment 150,000
Accumulated Depreciation – Equipment 60,000
Accounts Payable 20,000
Accumulated Surplus (Deficit) 470,000
Totals 700,000 700,000
 1. AAp
1. p pprop
ro prri
i aat
tioi onn
EntityAAreceives
Entity receivesitsitsGAA
GAAamounting
amountingtotoP1,000,000.
P1,000,000.

2. AAl
2. llolotm
tmeenntt
Entity AA receives
Entity receives itsits allotment
allotment amounting
amounting toto
P960,000from
P960,000 fromthe
theDBM.
DBM.

3. I n
3. I nccuurre
rrennccee oof f OObbl il g
i gaat ti o
i onn

EntityAAincurs
Entity incursobligations
obligationsamounting
amountingtotoP700,000.
P700,000.
 4. D i s b u r s e m e n t A u t h o r i t y - N C
4. D i s b u r s e m e n t A u t h o r i t y - N C A A

EntityAAreceives
Entity receivesthe
thefollowing
followingNotice
NoticeofofCash
CashAllocations
Allocations(NCA),
(NCA),net
netofoftax:
tax:

DAT
For current E Cash-Modified Disbursement System(MDS), Regular 600,000
year’s 600,000
appropriation Subsidy from National Government 600,000
For prior year’s To recognize receipt of NCA from the DBM
accounts
DAT
payable and not
25,000 E Cash-Modified Disbursement System(MDS), Regular 25,000
yet due and
demandable Subsidy from National Government 25,000
obligations
To recognize receipt of NCA from the DBM
 5. Di
5. D si sbbuurrse
sem
meennt t Pe r s o n n e l S e r v i c e s
a.a.Set
Setupupofofpayable (P
payabletotoofficers
officers Semployees
and
and )
employees uponapproval
upon approvalofofpayroll.
payroll.

Salaries &Wages 200,000 DAT

E Salaries and Wages, Regular 200,000
Personal Economic
50,000
Relief Allowance Personal Economic Relief Allowance (PERA) 50,000
Gross
Compensation
250,000 Due to BIR 20,000
Withholding Tax (20,000) Due to GSIS 9,000
GSIS (9,000) Due to Pag-IBIG 2,000
Pag-IBIG (2,000) Due to PhilHealth 1,000
PhilHealth (1,000) Due to Officers and Employees 218,000
Total Deductions (32,000) To recognize payable to officers and
employees upon approval of payroll
Net 218,000
 5. Di
5. D si sbbuurrse
sem
meennt t Pe r s o n n e l S e r v i c e s
b.b.The
Thepayable recordedin(
payableisisrecorded P
inthe S )
theORS.
ORS.

c.c.Grant
GrantofofCash
CashAdvance
Advancefor
forpayroll.
payroll.
DAT
E Advances for payroll 218,000
Cash-Modified Disbursement System (MDS), Regular 218,000
To recognize grant of cash advance for payroll

d.d.The
Thedisbursement
disbursementisisrecorded
recordedininthe
theORS
ORSand
andRAOD.
RAOD.

e.e.Liquidation
LiquidationofofPayroll
PayrollFund.
Fund.
DAT
E Due to Officers and Employees 218,000
Advances for Payroll 218,000
To recognize liquidation of Payroll Fund
 5. Di
5. D si sbbuurrse
sem
meennt t Maintenance and Other
Operating Expenses
Purchaseofofoffice
Purchase (MOOE)
officesupplies
supplies
DA
TE Office Supplies Inventory 5,000
a. Receipt of delivery of Accounts Payable 5,000
purchased office supplies To recognize delivery of
from prior year’s obligation office supplies

DA
b. Receipt of delivery of TE Office Supplies Inventory 70,000
purchased office supplies Accounts Payable 70,000
worth P70, 000 from To recognize delivery of
current year’s obigation office supplies
 5. Di
5. D si sbbuurrse
sem Maintenance and Other
meennt t
Operating Expenses
( M
Payment of accounts payable:
O O E )
Payment of accounts payable:

DAT
c. From prior year’s E Account Payable 20,000
accounts payable: Due to BIR 2,000
Accounts payable 20,000 Cash-Modified Disbursement System
18,000
Less: Withholding
(2,000)
(MDS), Regular
taxes To recognize payment of accounts
Net 18,000 payable
 5. Di
5. D si sbbuurrse
sem Maintenance and Other
meennt t
Operating Expenses
( M
Payment of accounts payable:
O O E )
Payment of accounts payable:

DAT
d. From prior year’s E Account Payable 5,000
obligation: Due to BIR 1,000
Accounts payable 5,000 Cash-Modified Disbursement System
4,000
Less: Withholding
(1,000)
(MDS), Regular
taxes To recognize payment of accounts
Net 4,000 payable
 5. Di
5. D si sbbuurrse
sem Maintenance and Other
meennt t
Operating Expenses
( M
Payment of accounts payable:
O O E )
Payment of accounts payable:

DAT
e. From current year’s E Account Payable 60,000
accounts payable: Due to BIR 3,000
Accounts payable 60,000 Cash-Modified Disbursement System
57,000
Less: Withholding
(3,000)
(MDS), Regular
taxes To recognize payment of accounts
Net 57,000 payable
 5. Di
5. D si sbbuurrse
sem
meennt t Maintenance and Other
Operating Expenses
Operatingexpenses
Operating expenses
(MOOE)
DAT
E Water Expenses 1,000
f. Entity A pays for the
following expenses: Electricity Expenses 5,000
Water 1,000
Telephone Expenses 2,000
Electricity 5,000 Janitorial Expenses 10,000
Telephone 2,000 Security Expenses 12,000
Janitorial 10,000
Due to BIR 2,000
Security 12,000
Cash-Modified Disbursement System
Total 30,000 28,000
(MDS), Regular
Less: Withholding
(2,000) To recognize issuance of MDS checks as
taxes
payment for expenses
Net 28,000
 5. Di
5. D si sbbuurrse
sem
meennt t Maintenance and Other
Operating Expenses
Cashadvances
Cash advancesfor travel: ( M O O E )
fortravel:
DAT
E Advances to Officers and Employees 2,000
g. Entity A grants a cash Cash-Modified Disbursement System
advance of P2,000 for the 2,000
(MDS), Regular
traveling expenses of an To recognize grant of cash advance for
officer: travel

DAT
Traveling Expenses - Foreign 1,800
h. Liquidation of cash E

advance: Advance to Officers and Employees 1,800

To recognize liquidation of cash advance
for travel
 5. Di
5. D si sbbuurrse
sem
meennt t Maintenance and Other
Operating Expenses
Cashadvances
Cash advancesfor travel: ( M O O E )
fortravel:

DAT
E Cash – Collecting Officers 200
Advances to Officers and Employees 200
i. Receipt and deposit of To recognize refund of excess cash
refund of excess cash advance for travel
advance: DAT
E Cash – Treasury/ Agency Deposit, Regular 200
Cash – Collecting Officers 200
To recognize remittance of the refund of
excess cash advance for travel
 5. Di
5. D si sbbuurrse
sem
meennt t Maintenance and Other
Operating Expenses
(MOOE)
Issuanceofofoffice
Issuance officesupplies
suppliestotoend
endusers
users

DAT
E Office Supplies Expense 63,000
j. Entity A issues office
Office Supplies Inventory 63,000
supplies worth P63,000 to
To record the issuance of office supplies
end users. to end users
 5. Di
5. D si sbbuurrse
sem
meennt t Capital Outlays
Purchaseofofoffice
Purchase (CO)
officeequipment
equipment
a. Receipt of delivery of DAT
Office Equipment
E 300,000
purchased office
equipment worth P300,000 Accounts Payable 300,000
from current year’s To recognize delivery of office
equipment
obligation.

DAT
b. Payment of accounts payable. E Accounts Payable 300,000
Accounts Payable 300,000 Due to BIR 20,000
Less: Withholding Cash – Modified Disbursement
(20,000)
taxes 280,000
System (MDS), Regular
Net 280,000
To recognize payment of accounts
payable
 5. Di
5. D si sbbuurrse
sem
meennt t Re m i t t a n c e s o f
a. Entity A remits the taxes
withheld through TRA.
amounts
DAT
E Cash – Tax Remittance Advice 48,000 w i tDue
hh e
to BIR
l d
Subsidy from National Government 48,000
20,000
To recognize the constructive
receipt of NCA for TRA 2,000
1,000
DAT
E Due to BIR 48,000 3,000
Cash – Tax Remittance Advice 48,000 2,000
To recognize the constructive 20,000
remittance of taxes withheld to the
BIR through TRA 48,000
 5. Di
5. D si sbbuurrse
sem
meennt t Re m i t t a n c e s o f
amounts
b. Entity A remits the following
to the GSIS, Pag-IBIG and
DAT
E Due to GSIS
Due to Pag-IBIG
w i t h h
9,000
2,000
e l d
PhilHealth
Due to PhilHealth 1,000
GSIS 9,000
Pag-IBIG 2,000 Cash –Modified Disbursement
12,000
PhilHealth 1,000
System (MDS), Regular
Total 12,000 To recognize remittance to GSIS,
Pag-IBIG and PhilHealth

c. The disbursements above are recorded in the ORS and RAOD.

 6. BBi li ll il n
6. i nggss, , CCool ll e
l ecct ti o
i onn && Re
Rem
mi ti tt taanncceess

a. Entity A bills the following DAT

E Accounts Payable 180,000
revenue/income: Power Supply System Fees 100,000
Power supply system fees 100,000
Landing and Parking Fees 80,000
Landing and parking fees 80,000
To recognize billing of income
Total 180,000

DAT
E Cash – Collecting Officers 100,000
b. Entity A collects P100,000 Accounts Receivable 100,000
accounts receivable from the To recognize collection of current
billing above and remits year’s billed income
P90,000 of the collection. DAT
E Cash – Treasury/Agency Deposit, Regular 100,000
Cash – Collecting Officer 100,000
To recognize remittance of income to
the BTr
 6. B i l l i n g s , C o l l e c t i o n & Re m i t t a n c e
6. B i l l i n g s , C o l l e c t i o n & Re m i t t a n c e s s

DAT
c. Entity A collects P45,000 E Cash – Collecting Officers 45,000
accounts receivable from prior Accounts Receivable 45,000
year’s billing and remits total To recognize collection of prior
year’s billed income
collection.
DAT
E Cash – Treasury/Agency Deposit, Regular 45,000
Cash – Collecting Officers 45,000
To recognize remittance of income to
the BTr
 6. B i l l i n g s , C o l l e c t i o n & Re m i t t a n c e
6. B i l l i n g s , C o l l e c t i o n & Re m i t t a n c e s s

d. Entity A collects unbilled DAT

Cash – Collecting Officers 370,000
E
service income of P370,000
Permit fees 200,000
and remits P340,000 of the
total collection: Registration fees 160,000
Other service income 10,000
Permit fees 200,000
To recognize collection of unbilled
Registration fees 160,000 service income
Other service income 10,000
Total collection 370,000 DAT
E Cash – Treasury/Agency Deposit, Regular 340,000
Cash – Collecting Officers 340,000
To recognize remittance of income to
the BTr
 6. B i l l i n g s , C o l l e c t i o n & Re m i t t a n c e
6. B i l l i n g s , C o l l e c t i o n & Re m i t t a n c e s s

e. Entity A collects unbilled tax DAT

Cash – Treasury/Agency Deposit, Regular 100,000
E
revenue through direct
Immigration Tax 100,000
deposit in Authorized Agent To recognize collection and
Banks: remittance of income to BTr through
Authorized Government Depository
Immigration Tax 100,000 Banks (AGDB)/ Govenrment Servicing
Total 100,000 Banks (GSB)

7. UUnnaaddj u
7. j ust
s te
e dd Tri
Tr al
i a l BBa
alal annccee

ItItisisaalist
listofofthe
theaccounts
accountsininthe
theGeneral
GeneralLedger
Ledgertogether
togetherwith
withtheir
theirbalances.
balances.
 1.
1. Reversion of
Reversion of unused
unused NoticeNotice of
of Cash
Cash Allocation
Allocation (NCA).
(NCA).
2.
2. Depreciation expenses:
Depreciation expenses: i.i. Buildings
Buildings –– P50,000
P50,000
8. Ad
8. Adj u
j ust
sti n
i ngg EEnnttrri e
i ess ii.ii. Equipment
Equipment –– P30,000
P30,000
3.
3. Allowance for
Allowance for impairment
impairment on on accounts
accounts receivable
receivable of
of P2,000.
P2,000.
DATE
Subsidy from National Government 6,000
Cash – Modified Disbursement System (MDS), Regular 6,000
To recognize reversion of unused NCA
DATE
Depreciation-Buildings & Other Structures 50,000
Accumulated Depreciation – Bldgs. 50,000
To recognize depreciation of buildings
DATE
Depreciation-Machinery and Equipment 30,000
Accumulated Depreciation – O.E. 30,000
To recognize depreciation of office equipment
DATE
Impairment Loss – Loans and Receivables 2,000
Allowance for Impairment – A/R 2,000
To recognize loss allowance on accounts receivable
 9. Closing
9. Closing Entries
Entries

DATE
Accumulated Surplus/ (Deficit) 575,200
Cash – Treasury/Agency Deposit, Regular 575,200
To recognize closing of cash deposit account

DATE
Subsidy from National Government 667,000
Revenue and Expense Summary 667,0000
To recognize closing of subsidy account
 DATE Immigration Tax 100,000
Permit Fees 200,000
Registration Fees 160,000
Other Service Income 10,000
Power Supply System Fees 100,000
Landing and Parking Fees 80,000
Salaries and Wages, Regular 200,000
Entries

PERA 50,000
Closing Entries

Traveling Expenses – Foreign 1,800

Office Supplies Expense 63,000
Water Expenses 1,000
Electricity Expenses 5,000
Telephone Expenses 2,000
9. Closing

Janitorial Expenses 10,000

Security Expenses 12,000
Depreciation – Bldgs. 50,000
Depreciation – Machine & Equipment 30,000
Impairment Loss – L/R 2,000
Revenue and Expense Summary 223,200
To recognize closing of income and expense summary
9.
 9. Closing
9. Closing Entries
Entries

DATE
Revenue and Expense Summary 890,200
Accumulated Surplus/ (Deficit) 890,200
To recognize closing of revenue and expense summary
 10. Preparation
10. Preparation of
of
Financial Statements
Financial Statements