Ellaissa Marie T.

Rubica 180166 08-21-20

CHAPTER 1: General Provisions, Basic Standards, and Policies

Government accounting refers to the process of analyzing, recording, summarizing, and

communication of financial information relating to the receipt and disposition of government

funds and property, and interpreting its results. The objectives of government accounting include

the (1) information concerning past operations and present conditions; (2) basis for guidance and

future operations; (3) controlling of the acts of public bodies; and, (4) reporting of financial

position and results of operations. Basically, government accounting focuses on the sources and

utilization of government funds, and the responsibility, accountability, and liability of entities

entrusted with government funds and properties.

The responsibility, accountability, and liability over government funds and property include the

effective and efficient utilization of government resources, and the responsibility of the head of

agency in the implementation of policies and the responsibility and accountability of the

governmental personnel for the safeguarding of government resources, becoming liable for any

losses. In line with this, the offices that have government accounting responsibility are the (1)

Commission on Audit (COA), which is responsible for the promulgation of accounting and

auditing rules, keeping the general accounts, and submitting financial reports; (2) Department of

Budget and Management (DBM), who validates and assigns codes for funding source

organizations and related expenditures; (3) Bureau of Treasury (BTr), which is responsible with

the consistency of account classification with government finance statistics; and, (4) Government

Agencies that have the responsibility to maintain accounting books and budget registries which

are reconciled with the cash records of the BTr and the budget records of the COA and DBM.

On the other hand, the Government Accounting Manual for National Government Agencies

(GAM for NGAs) is promulgated by the COA to align government accounting standards with the
International Public Sector Accounting Standards (IPSAS), which are based on the IFRS. The

objectives are to update (1) standards, policies, guidelines, and procedures in accounting for

government funds and property; (2) coding structure and accounts; and, (3) accounting books,

registries, records, forms, reports, and financial statements. In line with this, the basic accounting

and budget reporting principles are the (1) Compliance with PPSAS and relevant laws, rules and

regulations; (2) Accrual basis of accounting; (3) Budget basis for presentation of budget

information in the financial statements; (4) Revised Chart of Accounts; (5) Double entry

bookkeeping; (6) Financial statements based on accounting and budgetary records; and, (7) Fund

cluster accounting

The components of the general purpose financial statements include the (1) Statement of

Financial Position; (2) Statement of Financial Performance; (3) Statement of Changes in Equity;

(4) Statement of Cash Flows; (5) Statement of Comparison of Budget and Actual Amounts; and,

(6) Notes to the Financial Statements. On the other hand, fund cluster accounting is the

accumulation of funding resources for recording transactions and preparing financial reports in

the budget, treasury, and accounting processes, such as recording revenues and expenditures

associated with certain financial activities by the government and its agencies.

Lastly, Responsibility accounting is a system that relates financial results to a responsibility

center, which provides access to cost and revenue information under the supervision of manager

having direct responsibility for its performance.