To record obligations occurred

REGISTRY OF APPROPRIATIONS, ALLOTMENTS AND OBLIGATIONS

PERSONAL SERVICES (RAAOPS)
MUNICIPAL ABC
Account Allotment Obligation
Date Ref P.P.A. Balance
Code Received Incurred
50 000 50 000
30 000 20 000

REGISTRY OF APPROPRIATIONS, ALLOTMENTS AND OBLIGATIONS

MAINTENANCE AND OTHER OPERATING EXPENSES (RAAOMO)
MUNICIPAL ABC
Account Allotment Obligation
Date Ref P.P.A. Balance
Code Received Incurred
20 000 20 000
500 19 500
800 18 700
500 18 200
 REGISTRY OF APPROPRIATIONS, ALLOTMENTS AND OBLIGATIONS
CAPITAL OUTLAY (RAAOCO)
MUNICIPAL ABC
Account Allotment Obligation
Date Ref P.P.A. Balance
Code Received Incurred
30 000 30 000
30 000 -

To record grant of cash advance for payroll

Account Title Account Code Debit Credit

Payroll Fund 25 000

Cash in Bank - Local Currency Current Act 25 000
To record payment of salaries and wages
Account Title Account Code Debit Credit

Salaries and Wages – Regular Pay 30 000

Due to BIR 1 050
Due to GSIS 2 850
Due to PAG-IBIG 600
Due to Philhealth 500
Payroll Fund 25 000

To record remittance of salary deductions

Account Title Account Code Debit Credit

Due to BIR 1 050

Due to GSIS 2 850
Due to PAG-IBIG 600
Due to Philhealth 500
Cash in Bank - Local Currency Current Act 5 000
To record obligation for government share for applicable salary deductions
REGISTRY OF APPROPRIATIONS, ALLOTMENTS AND OBLIGATIONS
PERSONAL SERVICES (RAAOPS)
MUNICIPAL ABC
Account Allotment Obligation
Date Ref P.P.A. Balance
Code Received Incurred
50 000 50 000
30 000 20 000
2 850 17 150
500 16 650
600 16 050
To record payment of government share for applicable salary deductions
Account Title Account Code Debit Credit

Life & Retirement Insurance Contributions 2 850

PAG-IBIG Contributions 500
Philhealth Contributions 600
Cash in Bank - Local Currency Current Act 3 950
To record grant of cash advance for travel
Account Title Account Code Debit Credit

Advances to Officers and Employees 500

Cash in Bank - Local Currency Current Act 500

To record liquidation of cash advance

Account Title Account Code Debit Credit

Traveling Expenses - Local 480

Advances to Officers and Employees 480
To adjust amount obligated for travel
REGISTRY OF APPROPRIATIONS, ALLOTMENTS AND OBLIGATIONS
MAINTENANCE AND OTHER OPERATING EXPENSES (RAAOMO)
MUNICIPAL ABC
Account Allotment Obligation
Date Ref P.P.A. Balance
Code Received Incurred
20 000 20 000
500 19 500
800 18 700
500 18 200
(20) 18 220

To record refund of cash advance for travel

Account Title Account Code Debit Credit

Cash in Vault 20
Advances to Officers and Employees 20
To record deposit of cash refund
Account Title Account Code Debit Credit

Cash in Bank - Local Currency Current Act 20

Cash in Vault 20

To record payment of electric bill

Account Title Account Code Debit Credit

Electricity 800
Cash in Bank - Local Currency Current Act 800

To record payment of office supplies, net of tax

Account Title Account Code Debit Credit

Office Supplies Inventory 500

Due to BIR 20
Cash in Bank - Local Currency Current Act 480
To record payment of office equipment, net of tax
Account Title Account Code Debit Credit

Office Equipment 30 000

Due to BIR 3 000
Cash in Bank - Local Currency Current Act 27 000

(adjusting entry)
To record payment of electric bill
Account Title Account Code Debit Credit

Depreciation – Office Equipment 5 400

Accumulated Depreciation – Office Equip. 5 400
(closing entries)
To close income accounts to Income and Expense Summary
Account Title Account Code Debit Credit

Special Education Tax 100 000

Subsidy from Other Funds 50 000
Income and Expense Summary 150 000
To close expense accounts to Income and Expense Summary
Account Title Account Code Debit Credit

Income and Expense Summary 40 360

Salaries and Wages – Regular 30 000
Life & Retirement Insurance Contributions 2 850
PAG-IBIG Contributions 600
Philhealth Contributions 500
Traveling Expenses – Local 480
Electricity Expenses 800
Depreciation – Office Equipment 5 400
To close Income and Expense Summary to Retained Earnings Surplus
Account Title Account Code Debit Credit

Income and Expense Summary 109 370

Retained Earnings Surplus 109 370

To close Retained Earnings Surplus to Government Equity

Account Title Account Code Debit Credit

Retained Earnings Surplus 109 370

Government Equity 109 370
TRUST FUND
Trust fund consist of private and public money received, by local
government or of a local government official as trustee, agent or
administrator, as a guaranty for the fulfillment of some obligations.
A trust fund shall only be used for the specific purpose for
which it was intended.
Grants and donations coming from foreign funding institutions, other
levels of government and private institutions/individuals for specific
projects/purpose and the equity of the local government on projects
under a trust agreement shall accrue to the trust fund.
These receipts shall be credited to the Government Equity
account.
ACCOUNTING FOR TRUST FUND
 Cash collections for the trust fund shall be acknowledged by issuance of
official receipt. Collection procedures shall be the same as that
prescribed for collections in the general fund. In case of receipt through
the bank, the accountant shall draw a JEV based on the bank credit
memo.
 The treasurer and/or concerned accountable officer shall maintain
separate cashbooks for the trust fund. The accountant shall maintain
separate books of accounts for trust fund and prepare separate
financial reports.
 For expenditures on infrastructure projects of the trust fund, the
construction period theory shall be applied. For other projects,
expenditures shall be debited to the appropriated expenditure
account. Expenditures shall be closed to Government Equity account at
the end of the year or upon completion, whichever comes first.
 For the inventory process, the perpetual inventory method and the
moving average of the accounting and costing the inventory shall be
followed.
 Separate perpetual inventory records shall be maintained and
separate weekly Summary for Supplies and Materials for the fund
shall be prepared.
1 To record receipt of grant from NCA
Account Title Account Code Debit Credit

Cash in Bank – Local Currency Current Act 2 500 000

Government Equity 2 500 000
To record purchase of equipment
Account Title Account Code Debit Credit

Construction and Heavy Equipment 500 000

Due to BIR 50 000
Cash in Bank – Local Currency Current Act 450 000
To record payment of the first billing
Account Title Account Code Debit Credit

Construction in Progress - Roads 1 000 000

Due to BIR 100 000
Cash in Bank – Local Currency Current Act 900 000
1

To record payment of the final billing

Account Title Account Code Debit Credit

Construction in Progress - Roads 1 000 000

Due to BIR 100 000
Cash in Bank – Local Currency Current Act 900 000

To transfer construction in progress to public infrastructure account

Account Title Account Code Debit Credit

Roads, Highways and Bridges 2 000 000

Construction in Progress - Roads 2 000 000
1

To record remittance of withholding taxes

Account Title Account Code Debit Credit

Due to BIR 250 000

Cash in Bank – Local Currency Current Act 250 000

To close expenditures to Government Equity account

Account Title Account Code Debit Credit

Government Equity 2 500 000

Roads, Highways and Bridges 2 000 000
Construction and Heavy Equipment 500 000
2 To record amount funded by LGU in the General Fund books
Account Title Account Code Debit Credit

Donations 500 000

Cash in Bank – Local Currency Current Act 500 000
To record receipts of funds from foreign funding institution
Account Title Account Code Debit Credit

Cash in Bank – Local Currency Current Act 2 000 000

Government Equity 2 000 000
To record payment of the first billings for the construction of the building
Account Title Account Code Debit Credit

Construction in Progress – Agency Assets 500 000

Due to BIR 50 000
Cash in Bank – Local Currency Current Act 450 000
2 To record grant of cash advance on salaries of project personnel
Account Title Account Code Debit Credit

Payroll Fund 170 000

Cash in Bank – Local Currency Current Act 170 000

To record liquidation of cash advances

Account Title Account Code Debit Credit

Salaries and Wages - Casual 200 000

Due to BIR 30 000
Payroll Fund 170 000

To record payment of supplies and materials purchased

Account Title Account Code Debit Credit

Office Supplies Inventory 100 000

Cash in Bank – Local Currency Current Act 100 000
2
To record payment of equipment purchased
Account Title Account Code Debit Credit

IT Equipment and Software 250 000

Due to BIR 25 000
Cash in Bank – Local Currency Current Act 225 000
To record check issued for installation of IT Equipment
Account Title Account Code Debit Credit

IT Equipment and Software 50 000

Cash in Bank – Local Currency Current Act 50 000
To record office supplies issued
Account Title Account Code Debit Credit

Office Supplies Expenses 60 000

Office Supplies Inventory 60 000
2

To record remittance of withholding taxes payable

Account Title Account Code Debit Credit

Due to BIR 105 000

Cash in Bank – Local Currency Current Act 105 000

(closing entries)
To close expenses to Government Equity
Account Title Account Code Debit Credit

Government Equity 260 000

Salaries and Wages - Casual 200 000
Office Supplies Expenses 60 000
2 To record payment of final billing for the construction of building
Account Title Account Code Debit Credit

Construction in Progress – Agency Assets 700 000

Due to BIR 70 000
Cash in Bank – Local Currency Current Act 630 000

To record transfer of construction in progress to Building account

Account Title Account Code Debit Credit

Property, Plant and Equipment - Building 1 200 000

Construction in Progress – Agency Asset 1 200 000

To record grant of cash advance for salaries of project personnel

Account Title Account Code Debit Credit

Payroll Fund 170 000

Cash in Bank – Local Currency Current Act 170 000
2 To record liquidation of cash advances
Account Title Account Code Debit Credit

Salaries and Wages - Casual 200 000

Due to BIR 30 000
Payroll Fund 170 000

To record issuance of office supplies

Account Title Account Code Debit Credit

Office Supplies Expense 40 000

Office Supplies Inventory 40 000

To record remittance of withholding taxes payable

Account Title Account Code Debit Credit

Due to BIR 100 000

Cash in Bank – Local Currency Current Act 100 000
 (closing entries)
2
To close expenses to Government Equity
Account Title Account Code Debit Credit

Government Equity 240 000

Salaries and Wages - Casual 200 000
Office Supplies Expenses 40 000
To transfer building and IT equipment to the General Fund
Account Title Account Code Debit Credit

Government Equity 1 500 000

Office Building 1 200 000
IT Equipment and Software 300 000
To recognize building and IT equipment in General Books
Account Title Account Code Debit Credit

Office Building 1 200 000

IT Equipment and Software 300 000
Government Equity 1 500 000
THE NEW CODING STRUCTURE
 REGION CODE
- a two-digit code that identifies a specific region
- ranges from 01 to 99
 PROVINCE CODE
- a two-digit code that identifies the province
- ranges from 01 to 99, generally defining the relative alphabetical sequence of all
provinces in the country, except those created after 1977
 CITY/MUNICIPALITY CODE
- a two-digit code that defines the relative alphabetical sequence of municipalities within
the province
- ranges from 01 to 99
 BARANGAY CODE
- a three-digit code that defines the relative alphabetical sequence of barangays within
the municipality
- ranges from 001 to 999
SPECIAL ACCOUNTS IN THE GENERAL FUND
Local government units shall maintain special accounts, through the use of complete
subsidiary ledgers for each number of the same economic enterprises, if any, in the
General Fund for the ff.:
• Public utilities and other economic enterprises
• Loans, interests, bond issues and other contributions for specific purposes
• Development projects funded from the share of the local government concerned
from the Internal Revenue Collections
• Other special accounts which may be created by law or ordinance
ACCOUNTING FOR SUPPLIES OR PROPERTY
 Purchase of supplies and materials for stock, regardless of whether or not they are
consumed within the accounting period, shall be recorded as inventory following the
perpetual inventory method.
 The moving average shall be used for costing inventories.
 Items with serviceable life of more than one year but small enough to be considered
as property, plant and equipment shall be recorded as inventories upon acquisition
and expense upon issuance.