BASIC ACCOUNTING FOR NON-

ACCOUNTANTS
PCEDO-TARLAC
CDA ACCREDITED TRAINING PROVIDER
CTPRO # 173
\
COURSE DESCRIPTION
 This seminar/ workshop discusses
on the subject of cooperative
accounting, its processes and its
procedures. With emphasis on
preparing cooperative financial
statement using the standard chart
of accounts (SCA) as per
Cooperative Development Authority
(CDA) and interpreting thereon.
 COURSE OBJECTIVE
 At the end of this course, participants must able
to:

- Have full understanding on the importance of

cooperative accounting;
- Understanding, discuss and differentiate each
accounts as per SCA;
- Prepare cooperative financial statement;
- Analyze cooperative financial statement as basis
for sound management decision;
- Value updated records and able to maintain
such for proper accounting and for internal
control purposes.
COURSE OUTLINE
Basic accounting concepts
Accounting as defined
Importance and relevance of accounting
Accounting basis
Major users of accounting information

Standard Chart of Accounts (SCA)

for Cooperatives
Accounting Process
Financial Statements
Statement of Financial Condition
Statement of Operations
BASIC ACCOUNTING CONCEPTS
WHAT IS ACCOUNTING?
 Is an art of recording, classifying,
summarizing in a significant manner and
in terms of money, transactions and
events which are in part at least of a
financial character and interpreting
results thereof.
 The process of identifying, measuring,
recording and communicating economic
information about an organization or
other entity, in order to permit informed
judgements by users of the information.
IMPORTANCE AND RELEVANCE OF
ACCOUNTING
 Source of information for management , to
enable them run the affairs of the coop
effectively;
 Government requirement;
 To serve as guide in the formulation of
strategies and as basis in addressing current
issue and to improve coming year’s operation;
 Serve as source of information necessary for the
Board to properly set program, system and
policies of the coop;
 To protect funds;
 To have a record of whatever changes there are
in the financial condition of the credit
cooperative;
MAJOR USERS OF ACCOUNTING
INFORMATION
 Board of Directors (Management) – to be used in
formulation of sound management decisions;

 Members (Owner) – to know the earning potential of

their investments;

 Creditors/Lenders – serves as basis in providing loan to

the cooperative;

 Employees/Management Team – to update themselves

with the targets;

 Government Agencies – as required by government

agencies like CDA, BIR and in applying annual business
permit;
METHODS OF ACCOUNTING
 Cash Basis – income is recorded and accounted for
when actually collected and expenses are accounted
for when actually paid.
 Accrual Basis – income is recognized as earned, not
necessarily when cash is received and expenses are
recognized when incurred, not necessarily when
cash is paid.
 Modified Cash Basis – under the cash modified basis,
the accounting is based on ACTUAL RECEIPTS and
DISBUSREMENTS of the branch except the
provisions should be made the reflect:
Expenses which are not paid but already due and
demandable;
Unpaid interest or capital and patronage refund applicable
for the accounting period;
Depreciation for the month and setting allowance for
probable loan losses;
THE STANDARD CHART OF
ACCOUNTS (SCA) FOR
COOPERATIVES
ACCOUNTS CLASSIFIED – AS
TO STATEMENT OF FINANCIAL
CONDITION
 ASSET ACCOUNTS
 Current Assets
 Investments
 Loan Receivable
 Other Current Assets
 Non Current Assets
 Property, Plant and Equipment
 Other Non Current Assets
ACCOUNTS CLASSIFIED – AS TO
STATEMENT OF FINANCIAL CONDITION

 LIABILITY ACCOUNTS
 Current Liabilities
 Non Current Liabilities
 Other Non Current Liabilities
ACCOUNTS CLASSIFIED – AS TO
STATEMENT OF FINANCIAL CONDITION

 EQUITY
 Members Equity
 Donations and Grants
 Statutory Funds
 Unrealized Gains/ Losses
ACCOUNTS CLASSIFIED – AS TO
STATEMENT OF OPERATIONS
 REVENUE ACCOUNT
 Interest Income From Loans
 Service Fees
 Filling Fees
 Fines, Penalties and Surcharges
 Interest Income From Investment
 Membership Fees
 Miscellaneous Income
ACCOUNTS CLASSIFIED – AS TO
STATEMENT OF OPERATION
 EXPENSE ACCOUNT
 Financing Cost
 Administrative Cost
STATEMENT OF FINANCIAL
CONDITION
ASSET ACCOUNTS
 Economic Resources of Cooperatives that
are recognized and measured in
conformity with generally accepted
accounting principles taking into
consideration cooperative laws, principles
and practices in the Philippines.

 Anything of value that is owned is called

an asset.
 It is a listed on the left-hand side of the
balance sheet.
 CURRENT ASSETS
 Include cash and other assets that are
reasonably expected to be realized in
cash or intended for sale or
consummation within twelve months
after the balance sheet date, or the
normal operation cycle of the
business, unless, it is restricted from
being exchanged or used to settle a
liability for at least twelve months
after the balance sheet date (IAS1)
CASH AND OTHER CASH
EQUIVALENTS
 Include cash on hand and demand deposits
and other cash equivalents
 That are: (1) readily convertibly to known
amounts of cash; and (2) so near their
maturity (original maturities of 3
 Months or less) that they represent
negligible risk of changes in value because
of changes in interest rate. (IAS7)
 CASH ON HAND
 Money (bills and coins) still in the
possession of the cooperative’s custodian.

 CHECKS AND OTHER CASH ITEMS (COCI)

 Dated checks, postal money order (PMO)

and demand drafts awaited deposit.
 CASH IN BANK
 Money deposited in the bank under the
name of the cooperative, i.e. Savings,
current, time deposits, and combo account.
A subsidiary ledger account shall be
maintained for each bank account.
 CASH IN OTHER COOPERATIVE
FEDERATION
 Money deposited in the federations to
which they are affiliated, i.e. savings and
time deposits which are unrestricted and
readily available when needed. A
subsidiary ledger shall be maintained for
each account.
 Notes: COMBO ACCOUNT was deleted
because cooperative federation in not
offering such account.
 PETTY CASH FUND
 Limited amount of money set
aside for small expenditures
such as stationeries, supplies
and fares maintained under an
imprest system. This account
should be adjusted to reflect the
actual cash at the end of the
accounting/ reporting period.
 REVOLVING FUND
 The amount set aside to cover
disbursements for recurring transactions
maintained under the imprest system. This
may include emergency purchases,
withdrawal of deposits, payment of loan
proceeds, etc., at a maximum amount
predetermined by the Board of Directors.
 LOANS AND RECEIVABLE
 Refers to financial asset with
fixed or determinable payments
that are not quoted in an active
market other than available for
sale, held the maturity and
investment at fair value through
profit and loss.
LOANS RECEIVABLE – CURRENT
 This
refers to the outstanding
balance of loans granted to the
members which are not yet due.
LOANS AND RECEIVABLE – PAST DUE
 Receivables from member-
borrowers which are not yet
collected on instalment due/
maturity dates.
 LOANS AND RECEIVABLE -
RESTRUCTURED
 Receivable from the member/
borrowers whose loan accounts
were restructured upon full
payment of interests due.
LOANS AND RECEIVABLE – LOANS IN
LITIGATION
 These are receivables from
member/ borrowers under legal
action. The loan shall remain in
this account during the
pendency of the legal
proceedings and until fully
paid/restructured/foreclosed and
undergone proceedings.
UNEARNED INTERESTS AND
DISCOUNTS
 This refers to interest already
received
 But not yet earned and
presented as a
 Contra asset account

 Note:recorded as contra asset

account but other coop take it as
part of current liabilities.
ALLOWANCE FOR PROBABLE LOSSES
ON LOANS

 Refersto the cumulative amount

set up against the current
operation for possible losses
arising from non-collection of
loans.
SALES CONTRACT
RECEIVABLE
 This refers to the amortized cost
of the assets acquired in
settlement of loans through
foreclosure or dation in payment
and subsequently sold on
instalment basis.
ALLOWANCE FOR PROBABLE LOSSES-
SALES CONTRACT RECEIVABLE
 Thisrefers to the cumulative
amount of impairment loss that
may arise from non-collection of
payments on Sales Contract
Receivable.
ADVANCES TO OFFICERS,
EMPLOYEES AND MEMBERS
 Duly approved cash advances for
official business to officers,
employees and members, subject
to liquidation in accordance
with the policy of the
cooperative.
 OTHER RECEIVABLES
 Transactions/adjustments not
classified under any of the
receivable accounts mentioned.
OTHER CURRENT ASSETS
 Are any other assets for which
the co-op expects to realize,
consume or use within the year.
It also include any other current
assets that are not assigned to
cash and cash equivalents, short
term investment and
receivables.
DEPOSIT TO SUPPLIERS
 The
amount paid in advance to
Suppliers.
UNUSED SUPPLIES
 Costof office and operation
supplies on hand at the end of
the accounting period.
PREPAID EXPENSES
 Payments made in advance in
exchange for a future benefit
usually within on year (e.g.
insurance, interest, advertising,
rentals, etc.)
NON-CURRENT ASSETS
 All other assets not classified as current to
include tangible, intangible, operating and
financial assets of a long term nature.
 INVESTMENT PROPERTY
 Costof property (land or building or a
portion thereof) held by the
cooperative to generate income or
capital appreciation or both, not used
in production of goods, supply or
services nor for administrative
purposes or sale in the ordinary
course of business measured at cost
and subject to depreciation. Fair
value of property must be disclosed at
the end of the accounting
period/reporting period.
INVESTMENT PROPERTY -
LAND
 Costof land or a portion thereof
held by the cooperative to
generate income or capital
appreciation or both, not used in
production of goods, supply or
services nor for administrative
purposes or sale in the ordinary
course of business measured at
cost and subject to depreciation.
INVESTMENT PROPERTY -
BUIDING
 Cost of building or a portion
thereof held by the cooperative
to generate income or capital
appreciation or both, not used in
production of goods, supply or
services nor for administrative
purposes or sale in the ordinary
courses of business measured at
cost and subject to depreciation.
ACCUMULATED DEPRECIATION –
INVESTMENT PROPERTY - BUILDING
 Totalamount of depreciation on
Investment Property (except
land) that are set up periodically
and charged against the current
operations.
 REAL AND OTHER PROPERTIES
ACQUIRED (ROPA)
 This refers to the real and other
properties, acquired by the co-op
in settlement of loans and
receivables through foreclosure
or dation in payment and/or for
other reasons. Should the
cooperative use such assets in its
main operation, the same assets
shall be reclassified accordingly.
 ALLOWANCE FOR PROBABLE LOSS -
ROPA
 This refers to the cumulative
amount of impairments loss
incurred on ROPA, which shall
be accounted for in accordance
with IAS 36
 PROPERTY, PLANT AND
EQUIPMENT
 Include all tangible assets with
an estimated useful life beyond
one year are used in the conduct
of the business, and not intended
for sale in the ordinary course of
business. Recorded at cost or fair
value if donated.
 LAND
 The acquisition cost of the land used for
its main operation plus all incidental
costs such as title, taxes. Surveying fees,
legal fees, restoration cost and other
costs. All there are reflected in a single
cost (fair value or appraised value if
donated). Taxes paid by the cooperatives
as a contribution to the cost of public
improvements (special assessment) are
treated as part of the cost of the land. At
the end of the accounting/reporting period,
fair value of the property must be
disclosed.
LAND IMPROVEMENTS
 The cost of depreciable
improvements after land
acquisition that are subject to
depreciation over their useful
lives.
ACCUMULATED DEPRECIATION –LAND
IMPROVEMENTS
 Total amount of depreciation
cost on land improvement that
are set up periodically and
charged against the current
operations.
BUILDING AND IMPROVEMENTS
 Acquisition/Construction cost of
the building and its
improvements on the land
owned by the cooperative and
used for its main operation.
Major repairs or improvements
that will prolong the life of the
building are considered
capitalizable cost. At the end of
the accounting/reporting period,
fair value of the property must
be disclosed.
ACCUMULATED DEPRECIATION –
BUILDING AND IMPROVEMENTS
 Total amount of depreciation
cost on the building and
improvements that are set up
periodically and charged against
the current operations.
BUILDING ON
LEASED/USUFRUCT LAND
 The cost of construction of new
building on a leased/usufruct
land and shall be depreciated
over the estimated life of the
building or the lease/usufruct
term whichever is shorter.
ACCUMULATED DEPRECIATION –
BUILDING ON LEASED/USUFRUCT LAND
 Totalamount of depreciation on
Building on Leased/Usufruct
Land based on cost that are set-
up periodically and charged
against the current operations.
FURNITURE, FIXTURES AND EQUIPMENT
 The cost of movable (furniture),
immovable (fixtures) properties
and office/production/store
equipment used in the
cooperative’s ordinary course of
business such as but not limited
to desks, chairs, cabinets,
computers including incidental
expenses incurred in acquiring
them, up to the time they are
received and ready for use.
ACCUMULATED DEPRECIATION –
FURNITURE, FIXTURES AND EQUIPMENT
 Total amount of depreciation
cost in Furniture, Fixtures and
Office Equipment that are set up
periodically and charged against
the current operations.
CONSTRUCTION IN PROGRESS
 Cost of materials, labor and
other construction related cost
incurred on unfinished
construction project, prior to
occupancy/actual use.
TRANSPORTATION EQUIPMENT
 Costof equipment which are
owned by the cooperative such
as motorcycles, pick-ups, vans
and other vehicles used in
conveying goods, services or
personnel.
ACCUMULATED DEPRECIATION –
TRANSPORTATION EQUIPMENT
 Totalamount of depreciation on
transportation equipment that
are setup periodically against
current operation.
PROPERTY, PLANT AND EQUIPMENT –
UNDER FINANCE LEASE
 Thisrefers to the fair value of
leased Property, Plant and
Equipment or present value of
their minimum lease payments
under finance lease agreement.
ACCUMULATED DEPRECIATION – PROPERTY,
PLANT AND EQUIPMENT – UNDER FINANCE
LEASE

 Total
amount of depreciation on
PPE – under Finance Lease that
are set-up periodically against
current operation.
LEASEHOLD RIGHT AND
IMPROVEMENTS/ CONCESSION
RIGHTS

 The cost of improvements on

premises under operating lease
including cost of rights and
concession rights which are
subject to amortization over the
useful life of the property or the
term of the lease, whichever is
shorter.
OTHER NON CURRENT ASSETS
 Areassets which do not fit into
any of the preceding asset
classification.
COOPERATIVE DEVELOPMENT
COST
 Thisrefers to expenses incurred
prior to the actual operations of
the cooperative, subject to
amortization for a period not
exceeding three (3) years.
COMPUTERIZATION COSTS
 The cost o acquisition or
development of computer
programs and other software
excluding upgrading of system.
This is amortized over a period
not exceeding three (3) years or
useful life whichever is shorter.
OTHER FUNDS AND DEPOSITS
 These are restricted fund set a
side for funding of Statutory and
other reserves established by the
coop such as Retirement, Mutual
Benefit and other funds. This
may be in the form of time
deposit or other securities which
maybe convertible to cash when
needed.
DUE FROM
HO/BRANCH/SUBSIDIARY
 The amounts used to record
receivables from Head
Office/Branch/ Subsidiary.
ASSETS HELD FOR SALE
 The amount of non current
assets and/or assets of a
discontinued operation that the
cooperative had held for sale
which is measured at the lower
of its carrying amount and fair
value less cost to sell.
MISCELLANEOUS ASSETS
 Assetsnot falling in any of the
above categories.
 LIABILITY ACCOUNTS
 Economic Obligations of a cooperative that are
recognized and measured in conformity with
generally accepted accounting principles taking
into consideration cooperatives’ laws, principles
and practices in the Philippines.

 An amount that is owned is called liability.

 Liabilities are on the right-hand side of the
balance sheet.
 CURRENT LIABILITIES
 An obligation is classified as current if
a) it is reasonably expected to be
settled within the normal operating
cycle of the cooperative; b) It is due
within 12 months after balance sheet
date; c) it is held primarily for the
purpose of being traded; d) the coop.
does not have an unconditional right
to defer settlement of the liability for at
least 12 months after balance sheet
date.
SAVINGS DEPOSITS
 Deposits made by members that
can be withdrawn anytime at the
option of the depositors.
TIME DEPOSITS
 Depositsmade my members in
the cooperative over a specified
period of time and
withdrawable at a
predetermined date.
ACCOUNTS PAYABLE - CURRENT
 Amount of
obligations/indebtedness to
suppliers for purchase of goods
not intended for sale (e.g.
Suppliers, periodicals and etc.)
LOANS PAYABLE - CURRENT
 This indebtedness of the
cooperative to financial
institutions, other cooperatives
or person(s) which is payable
within the accounting/fiscal
period and the current portion
of the Long Term Loans Payable.
CASH BOND PAYABLE
 Amount received from
members/employees as
guarantee for the use of
equipment/ return of
accessories/ future losses,
shortages and damages.
UNEARNED INCOME
 Refersto other income already
received but not yet earned.
 SSS/ECC/PHILHEALTH PREMIUM
AND PAG-IBIG CONTRIBUTIONS
PAYABLE

 Amounts withheld by the

cooperative from the
compensation/ income of its
employees representing their
premium contributions to SSS,
Philhealth and Pag-ibig agencies.
As an employer, the cooperative
has its corresponding share of
contributions and this should be
set up every payroll period.
SSS/ PAG-IBIG LOANS PAYABLE
 Amounts withheld by the
cooperative from the
compensation/ income of its
employees representing their
payment of loans to SSS and
Pag-ibig agencies.
WITHHOLDING TAX PAYABLE
 Thisaccount refers to all taxes
withheld as prescribed by law.
ACCRUED EXPENSES
 Thisaccount refers to expenses
that have been incurred but not
yet paid as of the end of
accounting period.
INTEREST ON SHARE CAPITAL
PAYABLE
A liability of the cooperative to
its members for interest on
share capital, which can be
determined only at the end of
every accounting period.
PATRONAGE REFUND PAYABLE
 Refers to liability of the
cooperative to its members for
patronage refund, which can be
determined only at the end of
every accounting period.
DUE TO CETF (APEX)
 Refers to the accumulated
amount set aside to be credited
to the Apex Organization where
the cooperative is a member.
This corresponds to the 50% of
the total annual allocation for
the Education and Training
Fund.
OTHER CURRENT LIABILITIES
 This account refers to other
liabilities that cannot be
classified under any of the
preceding current liability
accounts.
NON-CURRENT LIABILITIES
 Refers to liabilities payable
beyond one year.
LOANS PAYABLE
 The indebtedness of the
cooperatives to financial
institutions, other cooperatives
or person(s) payable beyond one
year, net of current portion.
RETIREMENT FUND PAYABLE
 This account refers to
accumulated retirement benefits
costs charged against the income
of the cooperative over the
expected remaining working
lives of participating employees.
OTHER NON-CURRENT ASSETS
 The totality of all other
liabilities that cannot be
classified after any of the
preceding liability accounts.
PROJECT SUBSIDY FUND
PAYABLE
 This account refers to unused
portion of the donation/grant for
training, salaries, wages, etc.
DUE TO
HO/BRANCH/SUBSIDIARY
 The account is used to record
inter-office transactions in the
books of HO/Branch/Subsidiary
and should ne closed at the end
of the accounting period.
OTHER PAYABLES – NON
CURRENT
 This account refers to other
Long Term liabilities not
elsewhere classified.
EQUITY ACCOUNTS
 Excess of a cooperative’s asset
over its liabilities.

 In a cooperative, the capital is

called Equity.
 It is the amount that remains
after the total liabilities are
subtracted from the total assets.
MEMBERS EQUITY
 Thisaccount refer to ownership
interest of the members in the
cooperative.
SUBSCRIBED SHARE
CAPITAL- COMMON
 This account refers to the
amount of share capital
subscribed b regular members
payable over a certain period of
time.
PAID UP CAPITAL -COMMON
 This account refers to the
account used to record
collection of common share
capital (if memo entry recording
is used).
SUBSCRIBED SHARE
CAPITAL - PREFERRED
This account refers to the
amount of preferred share
capital subscribed by
member (regular and
associate) payable over a
certain period of time.
PAID UP CAPITAL -PREFERRED
 This account refers to the
account used to record
collection of preferred share
capital (if memo entry recording
is used).
UNDIVIDED NET SURPLUS
 This account refers to the
accumulated net surplus of the
cooperative that is allocated and
distributed at the end of each
reporting period in accordance
with Articles 86 and 87 of RA
6938. Used for Interim Financial
Statement Presentation only.
 NET LOSS
 This account refers to temporary
account to record losses in
operations incurred during the
reporting period. Net loss for the
year shall be charged against
reserve fund, subject to
provisions of Article 81 of RA
6938.
DONATIONS/ GRANTS
 Thisaccount refers to amounts
received by the cooperative as
award, subsidies, grants, aids,
and others. This shall not be
available for distribution as
interest on share capital and
patronage refund.
STATUTORY FUNDS
 This account refers to
mandatory funds established/ set
up in accordance with Articles
86 and 87 of the Cooperative
Code.
 RESERVE FUND
 Thisaccount refers to the amount set
aside annually for the stability of the
cooperative (equivalent to at least 10%
of net surplus). A corresponding fund
should be set up either in the form of
time deposit with local banks or
government securities. Only in the
amount in excess of the share capital
may be used for the expansion and
authorized investment of the
cooperative as provided for in its by-
laws.
 CO-OP EDUCATION AND
TRAINING FUND
 This account refers to the
amount retained by the
cooperative out of the
mandatory allocation as
stipulated in the cooperative’s
by-laws.
 OPTIONAL FUND
 Thisaccount refers to fund set
aside from the net surplus
(should not exceed 10%) for
future use such as land and
building, community
developments, and other.
UNREALIZED GAINS/LOSSES
 This account refers to the
cumulative gains (losses) arising
from change in the fair value of
AF5 securities.
STATEMENT OF
OPERATIONS
 REVENUES
 Refers to gross inflow of
economic benefits during the
period arising in the course of
the ordinary activities of the
coop when those inflows result
in increases relating to
contributions from equity
participants.
INTEREST INCOME ON LOANS
 This account refers to income
earned and collected by the
cooperative from the interest
charged on the loans granted to
their members.
 SERVICE FEES
 This account refers to the fees
collected by the cooperative for
loan
processing/servicing/collecting.
 FILING FEES
 This account refers to the fees
collected by the cooperative
upon filing of loan applications
by member-borrowers.
 FINES, PENALTIES AND
SURCHARGES
 Thisaccount refers to the fees
imposed and collected by the
cooperative on the delayed
amortization payments of the
member-borrower.
 INTEREST INCOME FROM
INVESTMENT/ DEPOSITS
 This account refers to the
income earned by the
cooperatives from deposits in
banks/other institutions and
investments made in financial
institutions/government/busines
s organizations. This shall
include interest income derived
from the deposit of statutory
funds in the bank until utilized.
 MEMBERSHIP FEES
 This account refers to the
amount collected from the
cooperative’s member-applicants
upon approval of their
membership in the cooperative.
MISCELLANEOUS INCOME
 Thisaccount refers to all other
income earned by the
cooperative for which no
specific account has been set up.
EXPENSES
 EXPENSES
 This account refers to gross
outflows of economic resources
and incurrence of obligations in
the course of the ordinary
activities of the cooperative when
those outflows result in decreases
in surplus.
 FINANCING COST
 This account refers to expenses
related to borrowing of funds
used for operations.
INTEREST EXPENSE ON
DEPOSITS
 This account refers to the
interest incurred on savings and
time deposits of both regular &
associate members.
 INTEREST EXPENSE ON
BORROWINGS
 Thisaccount refers to interest
incurred on borrowings.
OTHER FINANCING CHARGES
 This account refers to service
charges, filing fees and other
fees for borrowings incurred by
the cooperative.
 ADMINISTRATIVE COSTS
 This account refers to expenses
incurred related to the general
administration and management
of the cooperative.
 SALARIES AND WAGES
 Thisaccount refers to amount
incurred for services rendered
by employees including overtime
pay.
 EMPLOYEES BENEFITS
 This account refers to benefits
given to employees other than
salaries and wages such as but
not limited to 13th month pay,
bonus, allowances, subsistence
allowances including human
resource development.
SSS, PHILHEALTH, ECC, PAG-IBIG
PREMIUM CONTRIBUTIONS
 This account refers to the
cooperative’s share in the
employees’ contribution to SSS,
ECC, Philhealth and Pag-ibig.
 RETIREMENT BENEFIT
EXPENSES
 Thisaccount refers to the cost of
providing retirement benefits to
employees for their services
rendered. The account of
retirement benefits is recognized
as an expense in the periods
during which the services are
rendered.
 OFFICERS’ HONORARIUM AND
ALLOWANCES
 Thisaccount refers to amount
incurred for services rendered
by directors, committee
members and officers.
 TRAININGS/ SEMINAR
 This account refers to amount
incurred for officers, directors,
employees and members, for
attending trainings and
seminars including all expenses
related thereto after exhausting
the CETF (local). For purposes of
analysis, amount incurred may
be classified as to the recipient.
 OFFICE SUPPLIES
 Thisaccount refers to expenses
incurred for office and various
supplies used in the
administration and conduct of
business operation.
POWER, LIGHT AND WATER
 This account refers to cost of
electricity and water incurred in
business operations.
TRAVEL AND
TRANSPORTATION
 This account refers to amount
incurred for fares, toll fees,
board and lodging, per die, and
meal allowance of officers and
employees and members while n
official travel.
 INSURANCE
 Expenses incurred to insure the
assets/properties of the
cooperative, premium of
insurances for officers and
employees and bonds of
accountable officers and
employees.
REPAIRS AND MAINTENANCE
 This account refers to expenses
incurred in the repair and
maintenance of each facility and
equipment except major repairs
that prolong the life of the asset.
 RENTALS
 Thisaccount refers to expenses
incurred for building/office
spaces or facilities leased by the
cooperative.
TAXES, FEES AND CHARGES

This account refers to

expenses incurred for taxes,
fees and charges due to
government entities, both
national and local.
 PROFESSIONAL FEES
 This account refers to fees and
related expenses incurred for
professional services rendered.
 COMMUNICATION
 This account refers to amount
incurred for courier (letters),
telephone, cell phone, e-mail,
face, internet, messengerial, and
all other mean of
communication.
 REPRESENTATION
 Thisaccount refers to expenses
incurred related to
accommodating visitors and
guests on official business.
MEETING AND
CONFERENCES
 Thisaccount refers to amount
incurred for officers, directors,
employees and members, for
attending meetings and
conferences.
PERIODICALS, MAGAZINES AND
SUBSCRIPTION
 Amount incurred for
subscription or purchase of
periodicals and magazines.
GENERAL SUPPORT SERVICES
 Thisaccount refers to expenses
incurred for employing services
of security, janitors, messengers
and other support services.
 LITIGATION EXPENSES
 Thisaccount refers to expenses
incurred in judicial and quasi-
judicial cases including
incidental costs where the coop
is the complainant or
respondent as authorized by the
BODs.
GAS, OIL AND LUBRICANTS
 This account refers to amount
incurred for gasoline, fuel and
lubricants for cooperative’s
vehicles and for day to day
operation.
MISCELLANEOUS EXPENSE
 Thisaccount refers to all other
expenses incurred by the
cooperative not classified under
any of the specified expenses
account.
 BANK CHARGES
 Thisaccount refers to bank fees
and other charges excluding cost
of check books.
 COLLECTION EXPENSE
 This account refers to amount,
including commissions, incurred
as incentives in effecting the
collection of loans of the
cooperative.
PROMOTIONAL EXPENSES
 Thisaccount refers to expenses
incurred for advertising and
promotions.
 DEPRECIATION
 Thisaccount refers to allocation
of cost over the estimated life of
Property, Plant and Equipment.
 AMORTIZATION
 Thisaccount refers to amount
provided for amortization of
intangible assets.
 PROVISION FOR PROHABLE
LOSSES ON LOANS
 This account refers to
allocations or provisions for
estimated losses arising from
probable uncollectible
loans/accounts/ instalment
receivables.
 IMPAIRMENT LOSSES
 This account refers to the
differences between the carrying
value and the recoverable value
of an asset.
 AMORTIZATION OF LEASEHOLD
RIGHTS AND IMPROVEMENT
 This account refers to amount
provided for amortization of
leasehold rights and
improvements.
 DEMOCRATIC GOVERNMENT
COSTS
 Expenses incurred in providing
additional member’s benefit and
social services.
GENERAL ASSEMBLY EXPENSE
 Thisaccount refers to expenses
incurred in the conduct of
regular/special general
assembly.
MEMBERS BENEFIT EXPENSES
 Thisaccount refers to expenses
incurred in providing for
additional benefits and social
services.
 AFFILIATION FEE
 This account refers to amount
incurred to cover membership or
registration fees and annual
dues to a federation or union.
 SOCIAL AND COMMUNITY
SERVICE EXPENSE
 This account refers to expenses
incurred by the cooperatives in
its social community
involvement including
solicitations and donations to
charitable institutions.
 OTHER ITEM-
SUBSIDY/GAIN(LOSSES)
 This account refers to special
transactions arising from the
operations of the cooperatives.
 PROJECT SUBSIDY
 This refers to an amount
deducted from Project subsidy
fund to subsidize project
expenses. This shall appear in
the statement of operation as a
contra account to subsidized
project expenses.
DONATION AND GRANT
SUBSIDY
 This
account refers to an amount
deducted from Donation and
Grant to subsidize depreciation
funded by donation grant.
OPTIONAL FUND SUBSIDY
 Thisaccount refers to an amount
deducted from Optional Fund to
subsidize depreciation funded
by Optional Fund and or
community development
expense.
SUBSIDIZED PROJECT EXPENSE
 Thisaccount refers to portion of
the Project Subsidy Fund
expended for training, salaries
and wages as other activities
subsidized by donations and
grants.
 GAINS OR LOSS OF REPOSSED
ITEM
 Thisaccount refers to gain or
loss derived from the sale of
acquired assets/properties and
equipment.
 EXERCISE 1
 CLASSIFICATION OF ACCONTS
ACCOUNTING CYCLE
ACCOUNTING PROCESS/CYCLE
Aseries of activities that begin
with a transaction and ends with
the closing of the books. Because
this process is being repeated
each reporting period, it is
referred to as accounting cycle
and includes these major steps;
 THE ACCOUNTING
PROCESS
 1. Journalizing
 2. Posting

 3. Preparation of Trial Balance

 4. Preparation of Worksheet

 5. Making Adjusting Entries

 6. Preparation of Financial Statements

 7. Making of Closing Entries

 8. Preparation of post-closing trial balance

 9. Reversing Entries
THE FINANCIAL STATEMENTS
 Balance Sheet or Statement of
Financial Condition
 Income Statement or Statement
of Operation
 Statement of Cash Flows
 Statement of Changes in Equity
 PARTS OF STATEMENT OF
FINANCIAL CONDITION
 1. Heading which includes
 a) the name of the branch
 b) the name of the statement
 c) the date of the statement

 2. Body
 a) Assets
 b) Liabilities
 c) Equity
STATEMENT OF FINANCIAL
CONDITION
A working paper used in
preparing the financial
statements at the end of the
accounting period.
 An analysis paper on which the
financial condition of a business
in analyzed.
PARTS OF STATEMENT OF
OPERATION
 1. Heading which includes
 a) the name of the branch
 b) the name of the statement
 c) the period covered
 2. Body
 a) the revenues
 b) the expenses
 c) net surplus/(loss)
CLOSING THE ACCOUNTS
 The REVENUE and EXPENSES
accounts are nominal accounts.
They are temporary accounts
and their accumulated balances
at the end of the end of the year
are brought to zero.

 Thisis done by making closing

entries.