Accounting for

Disbursements and
Related
Transactions

General Requirements for All

Types of Disbursements:
1.

2.
3.

Existence of a lawful and sufficient

allotment certified as available by the
Budget Officer.
Existence of a valid obligation certified by
the Chief Accountant.
Legality of transactions and conformity with
laws, rules and regulations.

General Requirements for All

Types of Disbursements:
4.

5.

Approval of the expense by the Head of

Office
or
by
its
duly
authorized
representative.
Sufficient and relevant documents to
establish validity of claims.

Disbursement Process Flow

Requesting Unit
prepares
Disbursement
Voucher &
Obligation Slip. All
supporting
documents should
be attached.

Cash Office
prepares the check
and releases the
check to the payee.

Budget Office
obligates the
transaction and
Budget Officer
certifies existence
of a lawful &
sufficient
allotment.

Head of Office or
his duly authorized
representative
approves the
expense.

Accounting Office
processes the transaction,
prepares the JEV &
Accountant certifies as to:
(1) availability of funds;
(2) validity of obligation; &
(3) completeness of
supporting documents.

Disbursements:
1. By

Cash
2. By Check

Disbursements:
1. By

Cash
a. Advances for Payroll
b. Petty Cash

Disbursements:
2.

By Check
a. Modified Disbursement

System (MDS) Checks

b. Commercial Checks

Common Disbursement Transactions

in the Government:
Payment

of:
Goods (Office Supplies, Office Equipment,
Materials for Repairs of PPE, etc.)
Services (Security Services, Telephone,
Water, Electricity Expenses, etc.)

Payment of Goods:
Purchase

of Office Supplies (for stock) from

Tacloban Paperworld, a VAT-registered entity,
amounting to P 30,000.00. Assume that no
Accounts Payable was set-up.

Payment of Goods:

On Sep. 9, 2015, Agency Z purchased Office Supplies (for stock) from

Tacloban Paperworld, a VAT-registered entity, amounting to P 30,000.00.
Assume that no Accounts Payable was set-up.

Accounting Journal Entry:

Sep. 9

Office Supplies Inventory

1 04 04 01 0 00

30,000

Due to BIR

2 02 01 01 0 00

1,607.14

Cash in Bank-LC,CA-LBP

1 01 02 02 0 24

28,392.86
30,00030,000

To payment of Office Supplies for stock.

Payment of Goods:

On Sep. 9, 2015, Agency Z, purchased Office Supplies (for stock) from

Mabuhay Store, a Non-VAT entity, amounting to P 30,000.00. Assume that no
Accounts Payable was set-up.

Accounting Journal Entry:

Sep. 9, 2015 Office Supplies Inventory

1 04 04 01 0 00

30,000

Due to BIR

2 02 01 01 0 00

1,200

Cash in Bank-LC,CA-LBP

1 01 02 02 0 24

28,800
30,00030,000

To payment of Office Supplies for stock.

Payment of Services :
On

Sep. 3, 2015, Agency Z paid its Security

Services (for the month of August 2015) to
A&M Security Agency, a VAT-registered entity,
amounting to P 120,000.00. Assume that no
Accounts Payable was set-up.

Payment of Services :

On Sep. 3, 2015, Agency Z paid its Security Services (for the month of August
2015) to A&M Security Agency, a VAT-registered entity, amounting to P
120,000.00. Assume that no Accounts Payable was set-up.

Accounting Journal Entry:

Sep.3, 2015 Security Services

5 02 12 03 0 00 120,000

Due to BIR

2 02 01 01 0 00

7,500

CIB-LC,CA-LBP

1 01 02 02 0 24

112,500
120,000 120,000

To payment of Security Services for the month of August 2015.

Payment of Services :

On Sep. 4, 2015, Agency Z paid its Electricity Expenses (for the month of
August 2015) to EV Electric Cooperative amounting to P 1,606.01. Assume
that no Accounts Payable was set-up.

Accounting Journal Entry:

Sep.4, 2015 Electricity Expenses

5 02 04 02 0 00 1,606.01

Due to BIR

2 02 01 01 0 00

9.68

CIB-LC,CA-LBP

1 01 02 02 0 24

1,596.33
1,606.01 1,606.01

To payment of Electricity Expenses for the month of August 2015.

For Electric Cooperatives:

Composition of Tax Base:
Under Distribution Charges:
All Items except Reinvestment Fund for
Sustainable CAPEX
Under Other Charges:
All Items
Total of the above items (Distribution and Other
Charges) x 5%

Payment of Services :

On Sep. 4, 2015, Agency Z paid its Electricity Expenses (for the month of
August 2015) to EV Electric Cooperative amounting to P 1,606.01. Assume
that no Accounts Payable was set-up.

Accounting Journal Entry:

Sep.4, 2015 Electricity Expenses

5 02 04 02 0 00 1,606.01

Due to BIR

2 02 01 01 0 00

9.68

CIB-LC,CA-LBP

1 01 02 02 0 24

1,596.33
1,606.01 1,606.01

To payment of Electricity Expenses for the month of August 2015.

(Distribution and Other Charges- 193.65 x 5% = 9.68)

Payment of Services :

On Sep. 4, 2015, Agency Z paid its Water Expenses (for the month of August
2015) to EVWD amounting to P 800.00. Assume that no Accounts Payable was
set-up.

Accounting Journal Entry:

Sep.4, 2015 Water Expenses

5 02 04 01 0 00

800.00

Due to BIR

2 02 01 01 0 00

16.00

CIB-LC,CA-LBP

1 01 02 02 0 24

784.00
800.00 800.00

To payment of Electricity Expenses for the month of August 2015.

(Withholding Tax: 800.00 x 2% = 16.00)