government accounting

100問 • 1年前

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is any contract that gives rise to both a financial asset of one entity and a financial liability or equity instrument of another entity

Financial Insturment

is any asset that is cash, an equity intrument of another entity; a contractual right to receive cash or another financial assets from another entity; a contractual right to exchange financial instruments with another entity under conditions that are potentially favorable; a contract that will or may be settled in the entity’s own equity instruments.

Financial Asset

Is any liability that is a contractual right to deliver cash or another financial asset to another entity; a contractual obligation to exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavorable to the entity; and a contract that will or may be settled in the entity’s own equity instruments.

Financial Liability

Is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.

Equity Instrument

Initial Recognition: A financial Asset is recognized when?

An entity becomes a party to the contractual provisions of the instrument.

Initial Measurement: Financial Assets are initially measured at?

Fair Value plus transaction costs, except for financial assets at fair value through surplus or deficit whose transaction costs are expensed.

are incremental costs that are directly attributable to the acquisition, issue, or disposal of a financial instrument

Transaction costs

is one that would not have been incurred if the entity had not acquired, issued or disposed the financial instrument.

Incremental Cost

comprises cash on hand, cash in bank and cash treasury account

Cash

are checks drawn but not yet given to the payees as of the end of the period. it is reverted back to cash

Unreleased Checks

Journal entry to reverse unreleased check back to cash

CASH IN BANK, LOCAL CURRENCY, CURRENT. XXX ACCOUNTS PAYABLE XXX

when become stale, voided or spoiled. It is considered stale if it has been standing for over 6 MONTHS FROM its date.

Cancelled Check

may be issued for cancelled checks that were already released to payees, upon submission of the cancelled checks to the ACCOUNTING UNIT.

Replacement Checks

Journal Entry to recognize the cancellation of stale/voided/spoiled MDS check (current year)

CASH-MODIFIED DISBURSEMENT SYSTEM(MDS), REGULAR. XXX ACCOUNTS PAYABLE. XXX

Journal Entry to recognize the cancellation of stale/voided/spoiled MDS check in prior year

ACCOUMULATES SURPLUS/DEFICIT. XXX ACCOUNTS PAYABLE. XXX

For CANCELLED CHECKS: debit CASH IN BANK, LOCAL CURRENCY, CURRENT if REPLACEMENT CHECK is issued:

ACCOUNTS PAYABLE CASH

refers to the amount granted to duly designated petty cash custodian for payment of authorized perty or miscellaneous expenses which cannot be convenienty paid through checks or ADA.

Petty Cash Fund

Shall approve the amount of PCF to be established, which shall be sufficient to defray recurring petty expenses for 1 month.

Head of Agency

The _________ shall be properly bonded, whenever the established amount of PCF exceeds ₱_________.

PCF custodian 5,000

means an insurance shall be taken on the custodian. In the event that the custodian misuses the funds, the entity can claim from the imsurance company, and the insurance in turn will go after the custodian.

Bonded

The PCF shall be maintained using

Imprest System

At all times, total cash on hand and unreplenised expenses shall be equal to the PCF ledger balance

Imprest System

The PCF shall be kept separately from other ______ or collections and shall not be used to pay for regular expenses, such as rentals, electricity, water, and the like.

Advances

PCF payments shall not exceed____ for each transaction, except when otherwise authorized by law or by COA

₱15,000

a canvass from ____________ is required for purchases amounting to ₱1,000 and above, except for purchases made while on official travel

at least 3 suppliers

PCF disbursements shall be supported by properly accomplished and approved _________, _________, _____ or other evidence of disbursement.

Petty Cash vouchers, invoices, ORs

Replenishment shall be made as soon as disbursements reach __________or as needed.

at least 75%

At the end of the year, the PCF Custodian shall submit all ____________ to the _________ for recording in the books of accounts.

unreplenished petty cash vouchers accounting unit

The unused balance of the PCF shall _____________. It shall only be closed upon the ________, ________, _________ or _________ of the Petty cash custodian, who in turn shall refund any balance to close his/her cash accountability.

not be closed at year-end termination, separation, retirement, dismissal

Journal entry To record the establishment of petty cash fund

Petty Cash Fund Cash-Modified Disbursement System, Regular

Journal Entry to record the replenishment of the PCF

dr. Expenses cr. Cash-Modified disbursment system, regular

Journal Entry to adjust the PCF for unreplenishd disbursements

dr. Expenses cr. Petty Cash

Journal Entry to record the return of unused PCF upon retirement of the Petty Cash Custodian

dr. Cash-Collecting Officer cr. Petty Cash

disbursing officer is liable for

cash shortage

is in favor of the government

Cash Overage

(Cash Shortage) Journal Entry to recognize cash shortage of disbursing officer

dr. Due from Officers and Employees cr. Advances for/to

(Cash Shortage) Journal Entry to recognize restitution of cash shortage

dr. cash-collecting officer cr. due from officers and employees

(Cash shortage) Journal entry to recognize the remittance of restituted cash shortage to the Btr.

dr. Cash-Treasury/Agency Deposit, Regular cr. Cash-Collecting officers

(Cash overage) Journal entry to recognize forfeiture of cash overage of the disbursing officer

dr. cash-collecting officers cr. miscellaneous income

(Cash shortage) Journal entry to recognize the remittance of forfeited cash overage to the Btr.

dr. cash-treasury/agency deposit, regular cr. cash-collecting officers

is a check that is not accepted when presented for payment (a check returned by bank becuase of lack of sufficient fund, bounced check).

dishonored checks

is liable for the amount of check and penalties.

drawer

When a check is dishonored, the collecting officer shall ________, _________

1. issue a notice of dishonored checks to the drawer 2. cancel related OR

If the collecting officer fails to issue the notice, the dishonored check becomes his _________. The drawer and any endorser not given the notice will be ________ from any liability.

1. personal liability 2. relieved

check refused by bank within 90 days means __________ that drawer has knowledge of the insufficient fund (unless he pays the check in cash)

Prima facie evidence

dishonored check shall be settled in

cash or certified check

dishonored check is recorded to the

Other Receivables

(COLLECTIONS REMITTED TO BTR) To recognize the cancellation of current year’s deposited collections due to dishonored checks.

dr. other receivables cr. cash-treasury/agency deposit, regular

Journal entry To recognize the cancellation of prior year’s deposited collections due to dishonored checks

dr. other receivables Cr. accumulated surplus/deficit

(Collections remitted to authorized government depository bank) Journal entry to record the cancellation of deposited collectiosn both from current and prior year

dr. other receivables cr. cash in bank-local currency, current account

is a report that is prepared for the purpose of bringing the balances of cash (a) per records and (b) per bank statement into agreement

bank reconciliation statement

is a report issued by a bank which shows the credits and debits to the depositor’s account during a period, as well as the account’s cumulative balance.

bank statement

Bank reconciliations shall be prepared as __________ to ensure the correctness of cash records and as deterrent to fraud.

internal control

The ___________ or ________ shall prepare separate bank reconciliations for each bank account maintained by the entity within ____ from receipt of the monthly bank statement

Chief Accountant Designated staff 10 days

The __________ shall be used. Under this method, the unadjusted book and bank balances are brought to an adjusted balance that is reported on the statement of financial position.

Adjusted Balance Method

Bank reconciliation shall be prepared in _______ to be submitted within _____ from receipt of bank statement to the following _____,______,______,______

4 copies 20 days COA auditor, Head of Agency, Accounting Division, Bank

___________ shall be prepared to record any reconciling items.

Journal Entry Voucher (JEV)

are short term, highly liquid investments that are readily convertible to known amount of cash and which are subject to an insignificant risk of changes in value. Only debt instruments ACQUIRED WITHIN 3 MONTHS BEFORE their scheduled maturity date can qualify as cash equivalents.

Cash Equivalents

represent claims for cash or other assets from other entities.

Receivables

refers to amounts due from customers arising from regular trade and business transactions

Accounts Receivables

represents claims, usually with interest, for which a formal instrument of credit is issued as evidence of debt, such as promisory notes.

Notes Receivable

used in the BTr-NG books to recognize loans extended by the National Government to Government Financial Institutions (GFIs) or (GOCCs), covered by loan agreements.

Loans Receivable

such as, interest receivable, due from employees/officers/other NGAs, lease receivables, divided receivables, and the like.

other receivables

Receivables are initially measured at

Fair Value plus transaction costs

Receivables are subsequently measured at

amortised cost

is one that is either: held for trading, or designated as at fair value through surplus or deficit on initial recognition. Any financial asset can be classified in this category if its fair value can be reliably measured.

Financial Asset at fair value through surplus or deficit

Examples of FINANCIAL ASSETS AT FAIR VALUE THROUGH SURPLUS OR DEFICIT

INVESTMENTS IN QOUTED STOCKS OR BONDS

Initial measurement of Financial asset at fair value through surplus or deficit

Fair Value

Subsequent Measurement of Financial asset at fair value through surplus or deficit

fair value; changes in fair value are recognized in surplus/deficit

are non-derivative financial assets with fixed or determinable payments and fixed maturity that an entity has the positive intention and ability to hold until maturity.

Held-to-maturity investments

Examples of Held-to-maturity investments

INVESTMENT IN BONDS, AND OTHER DEBT SECURITIES TO BE HELD UNTIL MATURITY

Initial measurment of held-to-maturity investment

Fair value plus transaction costs

Subsequent measurement of held-to-maturity investment

amortised cost

are non-derivative financial assets with fixed or determinable payments and are not qouted in an active market.

Loans and receivables

Examples of Loans and receivables

Accounts, Notes, Loans receivable

Initial measurement of Loans and receivables

fair value plus transaction costs

Subsequent measurement of Loans and receivables

amortized cost

are non-derivative financial assets that are designated as available for sale or are not classifiae under the other transactions.

Available-for-sale financial assets

Examples of Available-for-sale financial assets

INVESTMENT IN STOCKS or BONDS NOT CLASSIFIED UNDER (a) to (C)

Initial measurement of available-for-sale financial assets

Fair value plus transaction costs

Subsequent measurement of available-for-sale financial assets

Fair value; change in fair value are recognized in equity

Investments in unqouted equity instruments whose fair value cannot be reliably measured are measured at

cost

ILLUSTRATION: Initial Measurement Entity A acquires an investment for ₱100,000. Transaction costs amount to ₱10,000 Provide journal entry for investment in financial asset held for trading

dr. financial asset held for trading 100k dr. other financial charges. 10k cr. Cash in bank-local currency, bangko sentral ng pilipinas. 110k

ILLUSTRATION: Initial Measurement Entity A acquires an investment for ₱100,000. Transaction costs amount to ₱10,000 Provide journal entry for investment classified as held-to-maturity investments held for trading

dr. investment in treasury bills, local. 110k cr. cash in bank- local currency, bangko sentral ng pilipinas. 110k

ILLUSTRATION: Initial Measurement Entity A acquires an investment for ₱100,000. Transaction costs amount to ₱10,000 Provide journal entry for investment classified as available-for-sale assets

dr. investments in stocks(or bonds). 110k cr. cash in bank-local currency, bangko sentral ng pilipinas. 110k

ILLUSTRATION: Subsequent Measurement Assume the investment in illustration 1 is invesment in stocks. The fair value at the end of the period is ₱120,000. Provide the journal entry for the investment classified as financial asset held for trading

dr. financial assets held for trading. 20k cr. gain from changes in fair value of financial instruments. 20k

ILLUSTRATION: Subsequent Measurement Assume the investment in illustration 1 is invesment in stocks. The fair value at the end of the period is ₱120,000. Provide for the journal entry for the investment classified as available-for-sale financial assets

dr. investments in stocks. 10k cr. unrealized gain/loss from changes in fair value of financial assets 10k

Interest income from debt instruments, other than those which are classified as financial asset at fair value through surplus or deficit, is recognized using

effective interest method

Only _________ can be classified as held-to-maturity investments

debt securities

Illustration On January 1, 2021, Entity A acquires 5-year, 5%, ₱1,000,000 face amount bonds for ₱957,876 and classifies them as held-to-maturity investments. The issuer pays annual interest everyday December 31. The effective interest rate is 6%. Provide journal entry to recognize investment in bonds and journal entry to recognize interest income

1/1/ dr. investment in bonds. 957,876 cr. cash in bank-local currency, bangko sentral ng pilipinas 957,876 12/31 dr. cash in bank-local currency, bangko sentral ng pilipinas 50k dr. investment in bonds 7,473 cr. interest income. 57,473

is the process of removing a previously recognized asset, liability or equity from the statement of financial position.

Derecognition

Derecognized when

1. contractual right expired or waived 2. financial asset is transferred and the tranfer qualify for derecognition.

The derecognition of financial assets is subject to the provisions of the

State Audit Code of the Philippines No. 1445

ILLISTRATION: IMPAIRMENT AND DERECOGNITION Entity A, a government hospital, receives promisory notes from several patients amounting to ₱1,000,000. provide the journal entry to recognize the receipt of promissory notes

dr. notes receivable. 1M cr. hospital fees 1M

At year end, it was estimated that ₱300,000 notes are impaired Provide the journal entry to recognize impairment of notes receivable

dr. impairment loss-loans and receivables. 300k cr. allowance for impairment-notes receivable 300k

A subsequent audit reveals that ₱100,000 of the impaired notes cannot be collected anymore. The COA authorizes the derecognition (writeoff) of these notes.

dr. allowance for impairment-notes receivable 100k cr. notes receivable 100k

is a financial instrument or other contract that derives its value from the changes in value of some other underlying asset or other instrument.

Derivative

Characteristics of derivative

1. its value changes if underlying changes 2. no initial net investment required 3. it is settled at a future date

is a specified price, rate, or other variable. (interest rate, security or commodity price, foreign exchange rate, index of prices or rates)

underlying

100

Purpose of derivative

risk management

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Charles Jaojao · 26問 · 1年前

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