ACCOUNTING FOR DISBURSEMENTS

Review of Process
01. Programs, Sub-Programs (PREXC)
In accordance with the thrust of the President
Program Expenditure Classification (PREXC) which is incorporated in the budget of the President for a particular
fiscal year

02. Appropriations >>> Allotments

The budget of the president is forwarded to the congress for its approval, ones approved we have the
appropriations represented by the General Appropriations Act and ones that appropriations reached the
agency level for easy reference as to this because both are authorization, then in the agency level we
called that the Allotments.
Here we encountered the RAPAL which is the registry in recording appropriations and for the allotments we
encountered the RAOD which is composed of RAOD for PS, MOOE, Capital Outlay, and
Financial Expenses.

03. Incurrence of Obligations

The obligations are incurred through the approval of Obligation Request and Status this is approved by the
Budget Officer and these obligations or expenditures are recorded in the RAOD.

04. Payment/ Disbursements

After the expenditures are obligated then the next thing is to pay the expenditures.
Disbursement Authorities; Cash allocation; Journal Entries

Disbursement Authority
If the allotment is the authority to obligate, before payments we have to consider the Disbursement authority
Before any check or disbursement will be made after an obligation or an expenditure is obligated, the
accountant has to verify if the authority to disburse is already received by the agency, before the
accountant will sign in the disbursement voucher for availability of funds.

1. NCAA – Notice of Cash Availment Authority

2. NCA – Notice of Cash Allocation or the ANCAI – Advice of Notice of Cash Allocation Issued
3. NTA – Notice of Transfer Allocation
4. TRA – Tax Remittance Advice
5. CDC – Cash Disbursement Ceiling

>>> Lecture 2

Advice of Notice of Cash Allocation Issued (ANCAI)

1. Department of Budget and Management – monitors the release of the budget to Agencies; controls cash that
will be released or given as an authority for Agency to spend/use for its payments of its obligations; Issues NCA
to the LBP; Issues ANCAI to Agencies
2. Agency
3. Bureau of Treasury – has the banking function; controls how much is the money of the National Government in
the National Treasury;

Assuming DBM knows that Agency A needs 10 million, this 10 million is intended for Agency A to finance its
expenditures to achieve its activities/plans being approved by congress and in the GAA.
DBM will inform the BTr that out of the 100 billion cash of the National Government, 10 million will go to Agency A
so the BTr on the other hand will have to inform the depository bank or servicing bank of Agency A, i.e., the LBP.
Assuming also that LBP has the funds of 100 billion that was deposited for Government funds. DBM knowing that 10
million has to be allocated to Agency A, it will issue the Notice of Cash Allocation to the LBP. Thus, in the books of
 LBP, the 10 million funds will be removed and transferred to the account of Agency A.
For Agency A to know that they has already 10 million in its servicing bank, DBM will issue to Agency A the Advice of
Notice of Cash Allocation issued, this is the second document that DBM will issue, the first being the NCA to the LBP.
Once the ANCAI is received by Agency A the obligations/expenditures which have been obligated by Agency A are
now ready to be paid. It can now issue checks.

>>> Lecture 3

Process Flow – receipt of the Advice of Notice of Cash Allocation Issued (ANCAI)
DBM – Central Office – Regional Office – Provincial Office and/or Operating Unit

1. ANCAI received by the Central Office

DBM issues ANCAI to the Central Office of a National Government Agency (NGA)
Entry of the Central Office:
a. Cash – Modified Disbursement System, Regular
Subsidy from National Government
2. ANCAI received by the Regional Office
DBM issues ANCAI to the Regional Office of an NGA
Entry of the Regional Office:
a. Cash – Modified Disbursement System, Regular
Subsidy from National Government
3. ANCAI received by the Provincial Office or Operating Unit (must have complete set of books)
DBM issues ANCAI to the Provincial Office and/or Operating Unit (e.g. Davao del Norte) of an NGA
Entry of the Provincial Office:
a. Cash – Modified Disbursement System, Regular
Subsidy from National Government

Notice of Transfer of Allocation (NTA)

On the first scenario, the Central Office, out of the ANCAI received will issue NTA to the Regional Office, it will
download the money to the Regional Office and the documentation for this is the Notice of Transfer Allocation.
If it is the central office or the regional office doing the downloading of money to another office it is the NTA, but if
that information comes from the DBM that is the ANCAI.

 Source Office (Central Office or Regional Office)

Subsidy from National Government
Cash – MDS, Regular
 Recipient Office (Regional Office or Provincial Office)
Cash in Bank – LCCA
Subsidy from Central/Regional Office

>>> Lecture 4
>>> Lecture 5

Advice to Debit Account (ADA)

Approved DVs > ADA is issued > summarized in List of Due and Demandable Accounts Payable-ADA
*DVs - Journal entries to recognize the payment

- It is supported with Approved Disbursement Vouchers

- List of Due and Demandable Accounts Payable (LDDAP – ADA) – serves or operates as checks
- For the expenditures that needs to be paid, instead of issuing a check, an LDDAP-ADA is issued, it operates like a
check.
- Through the issuance of LDDAP-ADA the agency is authorizing the bank to debit an amount equivalent to the net
amount presented in the LDDAP-ADA to its account.
- In the books of the servicing bank (e.g. LBP) the cash maintained by the agencies is in credit side, so if the agency
disburses it will be debited in the agency’s bank account then it will be credited in the payee’s bank account.

Non-Cash Availment Authority (NCAA)

This mode of disbursement is made through the Journal Entry Voucher (JEV) issued by the Bureau of Treasury
(BTr) to the availing/implementing agency to record payment of goods and services made directly by the lending
institution to the supplier or contractor.

Agency Books:
Communication Equipment 500,000
Accounts Payable 500,000
To record receipt of PPE procured through direct payment scheme
*the agency books will not pay, or is not the one who will pay the supplier but instead it will be the Bureau of
Treasury. However, the communication equipment is recorded in the agency’s book

Closing entry: entry after the BTr paid the asset or issued a check
Accounts Payable 500,000
Subsidy from National Government 500,000
To recognize receipt of NCAA and payment of payable based on the Withdrawal Authority (WA)
advice of payment or any proof of disbursement received from the Foreign Lending Institution
*once the payment is made by the BTr, the foreign supplier will issue the corresponding official receipt to the agency
books, that is the time that the agency accountant will close the accounts payable, because there is now a proof that the
asset is paid, not with the funds of the agency but through the BTr.

Bureau of Treasury Books:

Subsidy to NGAs 500,000
Loans Payable – Foreign 500,000
 To recognize the replenishments made to Authorized Government Servicing Bank (AGSB)
negotiated MDS-checks

Issuance of check:
*Loans Payable – Foreign 500,000
Cash – MDS, Regular 500,000
To recognize payment on account of the NGA
*Foreign because the assumption here is that the equipment is purchased from a foreign supplier, not a supplier stationed in
the Ph

Cash Disbursement Ceiling

An authorization issued by the DBM to the Department of Foreign Affairs (DFA) and other agencies with foreign
posts to utilize their collections retained by their Foreign Service Posts to cover operating requirements but not
to exceed the released allotment to the said post.

This happens to the agencies outside or which has stationed outside the Philippines. Other agencies would be
DOLE and DTI.

Whatever collection received by the foreign posts DFA (for example) will be used by the DFA in that foreign
country, it will not be deposited in the Ph meaning it will directly be used in the US (for example) to pay for
expenses in relation to the operation of the DFA in the USA but that foreign post cannot spend beyond what it
has collected.

This disbursement authority is not applicable to Regional or Central offices of National Government Agencies, its
only applicable to those agencies with foreign posts.

Books of DOLE or DFA:

Cash – Collecting Officers 100,000
Passport and Visa Fees 100,000
To recognize collection of revenues for Foreign Service Posts.

Cash in Bank – Foreign Currency, Current Account 100,000

Cash – Collecting Officers 100,000
To recognize deposit of collections to authorized servicing bank of the FSPs.

Ceiling:
*Cash – Constructive Income Remittance 100,000
Subsidy from National Government 100,000
To recognize receipt of Cash Disbursement Ceiling from DBM
*recall in previous discussion, this is Cash-MDS, Regular if its ANCAI

Use of Collection: an example

Quarters Allowance – Civilian 50,000
Rents – Buildings and Structures 30,000
Cash in Bank – Foreign Currency, Current Account 80,000
To recognize payment of expenses charged to CDC

>>> Lecture 6

Basic Requirements Applicable to All types of Disbursements

Once the GAA is there, the agencies are already authorized to incur applications. In the agency level, that is the
Allotments – the authority to obligate. After being obligated, next is the payment – Disbursements. In
disbursements we have disbursements authority and available cash.
 Following, the agency accountant has to abide with the basic requirements applicable to all types of
disbursements. And these requirements may be summarized into an acronym called ALAS.

Availability of Funds (Allotment; Cash)

- when we talked about funds we refer to Allotments and the available Cash, and Disbursement authority

Legality of the Transaction

- the transaction should be legal. To explain legality of transaction, if the Salary is 10,000/month and then he
advertently was paid 15,000/month, the legal salary is 10,000 and the illegal salary is 5,000. Legality of
transactions would have to refer to the various rules and regulations enacted and issued by the different
government agencies.

Approval by Competent Authorities

- for example, in the disbursement vouchers it has to be approved by the regional director or he is a duly
authorized representative and is competent.

Supporting Documents
- the disbursement voucher should be supported by supporting documents appearing legal and proper. It
has been said that the supporting documents for Government transactions are voluminous, to minimize
the volume of supporting documents the Commission on Audit issued COA Circular 2012-001 and this is
amended by COA Circular No. 2013-001 (minimum documentary requirements in specific transactions).
- in these circulars, it lists and gives the minimum documentary requirements. All these minimum
documents must be attached to the disbursement voucher, to pass the audit as far as documentary
requirements are concerned. An accountant is not precluded from requiring additional requirements to
show the validity of the disbursement or the transaction.

>>> Lecture 7

Modes of Disbursements

Approved DV > available Cash > Disbursement Authority > Payment

Payment – the giving of an amount from the Payor (Government of the Ph represented by the Regional office of a
National Government Agency) to the Payee (An employee, an Officer of that particular Regional office, or a Third
party supplier or individual)

Modes of disbursements for the agency to pay its obligations.

The ALAS would still have to be considered because the voucher will not be signed by the accountant if ALAS is not
existing. But when we talk about approved Disbursement voucher, the approval is with the Regional Director.

Modes of Disbursements:

1. Checks – issuance of MDS check; Commercial check

2. Cash – payment through cash, taken from cash advance. A disbursing officer will be given a cash advance and
that particular disbursing officer will pay. But the release of cash advance to that particular disbursing officer is
either through Check or an ADA.
3. ADA (Advice to Debit Account) – the agency is authorizing the Government Servicing Bank to debit its bank
account and credit that to the account of the payee maintained in the same bank; the agency when using this
mode of disbursement does not disburse by means of a check/cash, the disbursement is made within the bank
4. Tax Remittance Advice
5. Working Fund/ Cash Disbursement Ceiling
6. Direct Payment Method – Noncash Availment Authority (NCAA)
Tax Remittance Advice

A disbursement made for the remittance of taxes; this is a controlled mechanism for minimizing anomalies as far
as remittance of taxes is concerned.

Remittance of taxes withheld – no checks issued (but it is not an ADA)

The form here is designed by BIR and prenumbered for control purposes, the form will be filled out by the
agency as to the amount and kind of tax and submitted to the bank (e.g. LBP) then the bank will remit the
amount to the account of the Treasurer of the Ph under the BIR.

This mode is only applicable to Remittance of taxes.

Scenario: P10,000 taxes withheld by the Government agency (withholding agent)

Cash – Tax remittance advice 10,000

Subsidy from National Government 10,000
*Constructive receipt of NCA for TRA
*constructive receipt because there is no actual receipt of NCA for TRA or even cash

Remittance of withholding tax:

Due to BIR 10,000
Cash – Tax remittance advice 10,000
Issuance of TRA #xxxx
note: the debit to Cash-TRA is always equal to the credit Cash-TRA because whatever amount remitted is also the amount
constructively received, you will not be able to see this account (Cash-TRA) or is not present in any of the trial balances,
unless the trial balance is a TB of totals. But if a trial balance of balances is prepared which is usually the case, the account
Cash-TRA has a zero balance.

Working Fund/Cash Disbursement Ceiling

Usually used by offices stationed outside the country

 Embassies
 Labor attaches

Receipt of the office

 Disbursed for the needs of the office

 No longer deposited in the PH banks
 Limited by the amount of allotment of the office

>>> Lecture 8

Journalizing Transactions for Personnel Services

1. Salaries
which may be paid through:
a. Cash advance
b. Automated Tellering Machines (ATM)
c. Direct payment to Employees thru the ADA System
There is a case where ADA system will be used and then when withdrawn by employees it is already the ATM
2. Other recurring disbursements for PS
a. Representation allowance
b. Transportation allowance
 c. Mid-year Bonus (paid not earlier than May15 of every year)
d. Year-end Bonus (paid not earlier than Nov15 of every year)
e. Cash Gift (paid not earlier than November 15 of every year – P5k per employee)
f. Uniform/Clothing Allowance (6,000 per employee/year)
g. Government share/counterpart for RLIP
h. Government share/counterpart for Pag-IBIG Contributions
i. Government share/counterpart for PhilHealth Contributions

>>> Lecture 9

>>> Lecture 10

Incurrence of obligation for Salaries and Wages, the net amount is 159,800 which is good for 1month, usually
the payment is divided into two – 1 st half is 79,900 and another 79,900 for the 2 nd half.
 What we are presenting now in the RAOD is the credit to Cash – MDS, Regular, that is already disbursements.
Only 69,900 was in the disbursements for Salaries because the other 10,000 was in the PERA. Once we add the
139,800 and 20,000 that is 159,800 which is the total of credits to Cash – MDS, Regular, that is total of
payments/disbursements.
As far as PERA is concerned, it’s due and demandable 20,000 equals to total of disbursements 20,000, meaning
the obligations of PERA had already been paid.
Now the problem is in the Salaries because the Due and demandable is 180,000 but the disbursements are
139,800, a difference of 40,200 which is the unpaid. If you look in the JE in the credit the Due to O&E of
159,800 has already been paid which leaves other Dues totaling to 40,200. Because 20,000 has not been
remitted to BIR, 16,200 not remitted to GSIS, 2,000 not yet remitted to Pag-IBIG, and other 2,000 not yet
remitted to PhilHealth.

What is now the effect if it will be remitted?

The entry for the remittance of tax, the first entry is the constructive receipt of NCA and the actual remittance.
Following is the remittance to GSIS, to Pag-IBIG, and to PhilHealth.
The unhighlighted Debits represents the Government share.
 The BIR, GSIS, Pag-IBIG, and the remittance to the PhilHealth represents the deductions to the Salaries. Once
these are added, the Disbursements column in the Salaries will total to 180,000 which is now equal to
the 180,000 Due and demandable obligations.
The objective here is that the Due and demandable should be equal to the Disbursements, meaning they were
all paid.
Supposedly the remittance of these will be on February 5, so at the end of January 31 there is still balances on
each obligation for Salaries.

>>> Lecture 11

Payment Of Salaries from A Cash Advance

In the previous lectures, the JE presented refer to payment of Salaries whether it is through the ATM of the
employees or through individual checks. Of course, if ATM, ADA system is used.
In this lecture our payment of Salaries will be coming from a Cash advance, so there will be a cash advance
granted the cashier or the disbursing officer. The Disbursing Officer is designated to disburse, the cashier
that is an appointment allowing to disburse or to collect.

1st half of the month: The granting of the Cash advance

Advances for Payroll 79,900
Cash – MDS, Regular 79,900
*in here the Cashier/Disbursing Officer will now pay for the first half

2nd half of the month:

Advances for Payroll 79,900
Cash – MDS, Regular 79,900
*in here the Cashier/Disbursing Officer will now pay for the second half of the month

Before the month ends, the Cashier/DO has to prepare a Report of Cash Disbursements, this report is usually
prepared for the Cash advances. The Report of Cash Disbursements will be supported with the Signed Payroll.
The RCD is the basis of the accountant to prepare the entry for the Liquidation of the Cash advance – referring
to the Advances for Payroll.
That is a cash advance account that should be liquidated within 30 days otherwise the Salaries of the Cashier/DO
that does not liquidate their cash advance will be put on hold.
To close the amounts: Liquidation of the cash advances
Due to Officers and Employees 159,800
Advances to Payroll 159,800

>>> Lecture 12

Traveling Expenses

MOOE – Traveling Expenses – Local

Daily Traveling Expenses (DTE)
1,500 – Cluster 1
1,800 – Cluster 2 (Region 11 – Tagum City)
2,200 – Cluster 3 (ex. NCR – Quezon City)

 Hotel lodging (50%)

 Meals (30%)
 Incidental expenses (20%) - (transportation expenses within same City)

Employees are entitled to the DTE if travelled beyond 50km radius

Transportation Expenses
The transportation expenses are usually from the employee’s House  to the Airport  dorm in
Quezon City  Airport  House

>>> Lecture 13

Traveling Expenses

Scenario: DTE for a GACPA Convention in Cebu 15,000

Actual DTE 15,000

Reimbursement within the Year (2021) note: it should be obligated

Traveling Expenses – Local 15,000
Cash – MDS, Regular 15,000

Reimbursement in succeeding year/s (2022)

*Due to Officers and Employees 15,000
Cash – MDS, Regular 15,000
*we have to ensure that it was obligated and accrued in 2021
Entry of accrual in 2021:
Traveling Expenses – Local 15,000
Due to Officers and Employees 15,000

Scenario: DTE for a GACPA Convention in Cebu 15,000

Actual DTE 15,000

Cash Advance in Year (2021): remember: cash advance has to be liquidated

Advances to Officers and Employees 15,000
Cash – MDS, Regular 15,000

Liquidation in 2021: the advances account should be closed; debit the appropriate amount w/c is Traveling Expenses
Traveling Expenses – Local 15,000
Advances to Officers and Employees 15,000

Liquidation in 2022 (or years thereafter): still has to close the advances account
*Accumulated Surplus/(Deficit) 15,000
Advances to Officers and Employees 15,000
*we cannot use the nominal account, travel expenses – local, because this is already closed in 2021
*this is similar Retained Earnings account in corporate accounting

Scenario: DTE Travel Cash Advance 15,000

Actual DTE 14,000
Unliquidated Travel Cash Advance 1,000

Cash Advance in Year (2021):

Advances to Officers and Employees 15,000
Cash – MDS, Regular 15,000

Liquidation in 2021:
Traveling Expenses – Local 14,000
Advances to Officers and Employees 14,000
*the unliquidated travel cash advance amounting to 1,000 must be refunded either in 2021 or 2022 or years thereafter.
Entries are discussed in Chapter 7 – Accounting for Receipts.

>>> Lecture 14

Petty Cash (Imprest fund system)

Scenario: Petty cash fund established 10,000 (those expenses which are unplanned)
Replenished expenses:
Fare 2,000
*Office Supplies 7,000
*not included in annual procurement program

Establishment of the Petty cash

Petty Cash 10,000
Cash – MDS, Regular 10,000
*payment from the petty cash – NO JOURNAL ENTRY but the Petty Cash Fund Record (PCFR) is updated.

Replenishment of the petty cash note: we prepare journal entries when the petty cash are replenished
Transportation Expenses 2,000
*Office Supplies Expenses 7,000
**Cash – MDS, Regular 9,000
*use the expense method in recording office supplies and materials only if office supplies are purchased out of petty cash
fund, asset method when it is purchased using the usual procedure of public bidding
**if the cash used was LCCA – the replenishment is done in the operating unit that will be CiB- Local Currency Cash Account

Scenario: Unreplenished expenses, Dec 31:

Fare 3,000
Office Supplies 6,000
*prepare adjusting entry to balance the petty cash account still at 10,000 to the actual petty cash on hand of 1,000

Adjusting entry to recognize unreplenished Petty cash fund disbursements (12/31/21):

Transportation Expenses 3,000
Office Supplies Expenses 6,000
Petty Cash 9,000

Reversing Entry on 1/1/22 so that the balance of the Petty Cash account be returned to 10,000:
Petty Cash 9,000
Transportation expenses 3,000
Office Supplies Expenses 6,000

Replenishment in 2022:
Transportation Expenses 3,000
Office Supplies Expenses 6,000
Cash – MDS, Regular 9,000

>>> Lecture 15

Accounting for Disbursements from Cash Advances Granted for Operating Expenses
Usually in the case when DBM does not release funds to the provincial office, so there funds will come from
the regional office
The release of the amount to the field offices is taken up in the books of the regional office as a cash advance,
this cash advance is subject to replenishment – it can request replenishment from the regional office
In the books of the field offices there is no journal entry since they does not have complete set of books

Scenario: Cash advance granted to the Provincial Director of CSC Davao del Norte Provincial Office is P50,000 to pay for
the office’s operating expenses

Cash Advance in Year (2021) – in CSC Regional Office XI:

Advances for Operating Expenses 50,000
Cash – MDS, Regular 50,000

Expenses paid in CSC Davao del Norte: Office supplies 30,000; Electricity 4,000; Water 2,000; Telephone expenses 5,000
In CSC Davao del Norte:
No journal entries since transactions are recognized in the books of accounts maintained at the Regional
Office in Davao City
But the receipt of 50,000 and the total expenses will be recorded in the Cash Disbursements Register
When time to replenish the operating expenses, the Report of Cash Disbursements is prepared, and
submitted to the Regional Office together with the supporting documents.

To replenish the amount of operating expenses of CSC DavNor: Office supplies 30,000; Electricity 4,000; Water 2,000;
Telephone expenses 5,000
In the books of CSC Regional Office XI is:
Office Supplies Expenses 30,000
Electricity Expenses 4,000
Water Expenses 2,000
 Telephone Expenses – Landline 5,000
Cash – MDS, Regular 41,000

When the cash advance is liquidated, the account credited is Advances for Operating Expenses, instead of
Cash-MDS, Regular. This is usually done at the end of each year.

To liquidate the amount of operating expenses of CSC DavNor: Office supplies 30,000; Electricity 4,000; Water 2,000;
Telephone expenses 5,000
In the books of CSC Regional Office XI is:
Office Supplies Expenses 30,000
Electricity Expenses 4,000
Water Expenses 2,000
Telephone Expenses – Landline 5,000
Advances for Operating Expenses 41,000

Refund (Chapter 7 Lesson):

Cash - Collecting Officers 9,000
Advances for Operating Expenses 9,000

>>> Lecture 16

Accounting for Disbursements from Cash Advances granted for Special Purpose/Time-bound Undertaking
Time-bound undertaking - ending within the year, e.g. for civil service commission the conduct of examination,
for state universities and colleges is graduation ceremonies, for ComElec its the conduct of election

Scenario: Cash advance granted to the Dean of the College to defray expenses for the graduation ceremonies
amounting >>>> 50,000
Actual expenses: Supplies and materials, 10,000; Transportation expenses for the commencement speaker
20,000; Rental of Sound System 10,000; Meals/Lunch 9,000

Cash Advance:
Advances to Special Disbursing Officers 50,000
*Cash-MDS, Regular 50,000
*Cash in Bank – LCCA if coming from NTA or NTA received by Regional Office was used

Liquidation:
Office Supplies expenses 10,000
Transportation expenses 20,000
Rental expenses 10,000
Representation expenses 9,000
Advances to Special Disbursing Officer 49,000

The balance of 1,000 should be refunded. Entries are illustrated and explained in Topic/Chapter 7.

>>> Lecture 17

Disbursements for Inter-agency transferred Funds (IATF)

e.g. fund transfer from Commission on Higher Education -> State Universities and Colleges

Scenario: DOST transfers funds to the Philippine Science High School (PSHS) to defray the schooling expenses of its
scholars studying at PSHS >>> 500,000

Source Agency (SA)  DOST Implementing Agency (IA)  Phil Science High School

Books of DOST
Due from NGAs 500,000
 Cash – MDS, Regular 500,000

Scholarship Expenses 495,000

Due from NGAs 495,000
Once the Report of Cash Disbursement was submitted to the DOST, such report will be the basis
of the accountant of DOST in recording the total expenses amounting to 495,000
Cash – Collecting Officer 5,000
Due from NGAs 5,000
*Cash – Treasury/Agency
Deposit, Regular 5,000
Cash – Collecting Officer 5,000
*JE for the remittance to the National Treasury
Books of PSHS
Cash in Bank – LCCA 500,000
Due to NGAs 500,000
Due to NGAs 495,000
Cash in Bank 495,000
*Must be supported by vouchers, approved by the authorities of PSHS and be reported in the Report of Cash
Disbursements to be submitted to the DOST
Due to NGAs 5,000
Cash in Bank – LCCA 5,000

>>> Lecture 18

Accounting for Inventories

The manner in which the inventories are recognized in the books of accounts will depend on the purpose
of the inventory

 Inventory Held for Sale

 Inventory Held for Distribution
 Inventory Held for Manufacturing
 Inventory Held for Consumption

>>> Lecture 19

Accounting for Inventories

 Semi-Expendable Machinery and Equipment

 Semi-Expendable Furniture, Fixtures and Books
*The benchmark is the unit cost less than 50,000 or 49,999

Semi-Expendable Machinery and Equipment – Office Equipment xxx

Due to BIR xxx
Cash – MDS, Regular xxx
To recognize acquisition

Semi-Expendable Machinery and Equipment Expense xxx

Semi-Expendable Machinery and Equipment - Office Equipment xxx
To recognize issuance to end-user

All semi expendable which has been expensed as being issued to the end-users should be included in the notes
to financial statements
 Supplies and Materials Expenses
Office Supplies Expenses xxx
Office Supplies Inventory xxx
Issuance of office supplies per Report of Supplies & Materials
issued (RSMI) #xxxx-xx

>>> Lecture 20

Accounting for Inventories

Purchased thru Public Bidding in accordance with RA 9184, otherwise known as the Government Procurement
Reform Act

Office Supplies Inventory xxx

Accounts Payable or appropriate account xxx
*supported by an Inspection & Acceptance Report

Office Supplies Expenses xxx

Office Supplies Inventory xxx
*supported by Report of Supplies and Materials Issued submitted by the supplies and property section or
division of the office

Semi-Expendable Inventory

Semi-Expendable Machinery and Equipment – Office Equipment xxx

Accounts Payable or Cash – MDS, Regular xxx

Issued to end-user (supported with the Inventory Custodian Slip (ICS)):

Semi-Expendable Machinery and Equipment Expenses – Office Equipment xxx

Semi-Expendable Machinery and Equipment – Office Equipment xxx

>>> Lecture 21

Process Flow

*Cash Advance for Payroll  Report/Summarizing Documents for Recording = Report of Cash Disbursements