Appendix 1

ILLUSTRATIVE ACCOUNTING ENTRIES

A. ACCOUNT TITLES, CODES USED

The account titles and account codes used in the illustrative accounting entries to
record cash shortages, their subsequent restitution or relief, and to recognize cash overages
discovered during the cash examination are patterned on the Revised New Government
Accounting System Chart of Accounts. Other or equivalent account titles and additional
entries, if any, may be used by agencies (e.g. GOCCs) permitted to adopt accounting
systems and chart of accounts other than the NGAS and the Revised NGAS Chart of
Accounts.

B. ACCOUNTING FOR SHORTAGES

As soon as a cash shortage has been definitely established, the auditor concerned
shall accomplish the following certificate:

____________________
Date

I hereby certify that in the examination of the cash and accounts of

(Name and designation of Accountable Officer) made by (Name of Auditor)
on _____________, a shortage was reported which remains unaccounted for
and unrestituted.

I further certify that I have verified the shortage to be in the total

amount of P___________ (Indicate the shortage by funds).

____________________
Auditor

Four copies of the foregoing certificate shall be accomplished and distributed as follows:

Original - Agency Head

Duplicate - The defaulting accountable officer
Triplicate - The Chief/Regional Accountant concerned and
Quadruplicate - File copy of the Auditor.
 Based on the certificate, the Chief/Regional Accountant shall draw a journal entry
voucher to take up the cash shortage as follows:

Case I - Local Government Sector - General or Trust Fund

To take up the cash shortage and establish the receivable account of the defaulting
accountable officer

Account Title Acct. Code Debit Credit

Due from Officers and Employees 123 xxx
Cash, In Vault (for the Local Treasurer), or 101 xxx
Cash, Collecting Officer (for Collecting
Officer), or 102 xxx
Petty Cash, or 104 xxx
Payroll Fund 106 xxx

Case II - National Government Sector - General Fund and Special Account in the General
Fund

To take up the cash shortage and establish the receivable account of the defaulting
accountable officer

Account Title Acct. Code Debit Credit

Due from Officers and Employees 123 xxx
Cash, Collecting Officer (for Collecting
Officer) or 102 xxx
Cash, Disbursing Officer (for Disbursing 103 xxx
Officer)

C. ACCOUNTING FOR RESTITUTION

Cash restitution is made by the defaulting accountable officer during or after the year
when the shortage was discovered.

Case I - Local Government Sector - General or Trust Fund

To take up the cash restitution of the defaulting accountable officer

Account Title Acct. Code Debit Credit

Cash, Collecting Officer 102 xxx
Due from Officers and Employees 123 xxx

The above journal entry also applies if the defaulting accountable officer is from the
National Government Sector - General Fund and Special Account in the General Fund
D. ACCOUNTING FOR RELIEF

1. Request for relief from cash accountability was not granted

The entry to establish the liability of the defaulting accountable officer when his request
for relief was denied is similar with Item B, Cases I and II on the preceding page.
When the defaulting accountable officer settles his/her accountability, the accounting
entry shall be similar with Item C on Accounting for Restitution.

2. Request for relief from cash accountability was granted

a. To take up the relief from cash accountability

Account Title Acct. Code Debit Credit

Loss of Assets (current year) or 961 xxx
Prior Year Adjustments 684 xxx
Due from Officers and Employees 123 xxx

b. If the lost fund was from Trust Fund, the shortage shall be transferred to the
General Fund

• The entry to take up the cash shortage in the Trust Fund books of account is the
same with Item B, Case I on the preceding page.

• To take up the transfer of the lost fund to the General Fund since the defaulting
employee cannot restitute the shortage.

Trust Fund books of accounts

Account Title Acct. Code Debit Credit

Due from Other Funds 144 xxx
Due from Officers and Employees 123 xxx

General Fund books of accounts

Account Title Acct. Code Debit Credit
Loss of Assets (current year) or 961 xxx
Prior Year Adjustments 684 xxx
Due to Other Funds 424 xxx

• To take up the settlement of the loss fund in the Trust Fund

Trust Fund Books of Accounts

Account Title Acct. Code Debit Credit

Cash, Collecting Officer 102 xxx
Due from Other Funds 144 xxx
 General Fund Books of Accounts

Account Title Acct. Code Debit Credit

Due to Other Funds 424 xxx
Cash in Bank - Local Currency, Current
Accounts 111 xxx

E. ACCOUNTING FOR OVERAGES

Case I - Local Government Sector - General or Trust Fund

a. To take up the cash overage after it has been receipted and to recognize the income
account.

Account Title Acct. Code Debit Credit

Cash, Collecting Officer 102 xxx
Miscellaneous Income 678 xxx

b. To take up the remittance of the amount receipted

Account Title Acct. Code Debit Credit

Cash in Bank, Local Currency – Current 111 xxx
Account
Cash, Collecting Officer 102 xxx

Case II - National Government Sector - General Fund

a. To take up the cash overage after it has been receipted and to recognize the income
account.

Account Title Acct. Code Debit Credit

Cash, Collecting Officer 102 xxx
Due to National Treasury 411 xxx

The above journal entry shall be recorded in the National Government books under the
National Government Fund.

b. To take up the remittance of the amount receipted

Account Title Acct. Code Debit Credit

Due to National Treasury 411 xxx
Cash, Collecting Officer 102 xxx