FINANCIAL MANAGEMENT
OF BARANGAYS
Topics
1.INVENTORIES
2.INVESTMENT PROPERTY/ PPE/ BIOLOGICAL
ASSETS
3. MISCELANEOUS PROVISIONS
4. BOOKS OF ACCOUNTS
5. FINANCIAL STATEMENTS
6. CHART OF ACCOUNTS
7. OTHER PROVISIONS
8. SK MATTERS
INVENTORIES
• Barangay Treasurer- Property Officer
1. Receipt
2. Custody
3. Issuance and
4. Physical inventory of barangay
supplies and inventories.
INVENTORIES
Inventories are assets:
(a)in the form of materials or supplies to be
consumed in the production process;
(b)held for sale or distribution in the ordinary
course of operations;
(c)In the process of production for sale or
distribution.
INVENTORIES
Inventories are assets:
– Distribution at no charge or for a nominal charge; or
– Consumption in the production process of goods to be distributed at no
charge or for a nominal charge.
Specific Policies
• Moving average method - costing
similar inventories.
• Requisition and Issue Slip (RIS)
• At the end of the month, the BT shall submit a
Summary of Supplies and Materials Issued (SSMI)
- supported by the RIS to the C/M Accountant as
basis for recording the expense account.
Specific Policies
• For proper accountability, the supplies with serviceable
life of more than one year shall be covered by an
Inventory Custodian Slip (ICS).
• The ICS for supplies with more than 1 year life span shall
be maintained until disposal due to wear and tear, and
obsolescence.
• (COA Circular # 2005-002 dated April 14, 2005)
Specific Policies
a. prepare three copies of
Acceptance and Inspection Report (AIR) showing the
items received and inspected to be distributed as
follows:
Original - to the C/M Accountant to be
attached to the duplicate of PO and
PR
Duplicate copy - to be attached to the DV together with
the originals of the PO and PR
Triplicate copy - BT file
General Accounting
Receipt Policies
of Supplies
b. Based on the AIR, the BT shall record the
inventory in the Stock Card.
b. The BT shall:
• issue the supplies (if available) and require the requesting
officer to sign the receipt portion of the RIS. The RIS shall be
distributed as follows:
Original - to the BT
Duplicate - to the end-user
copy
General Accounting Policies
Issuance to end-users
• record the issuance of supplies in the stock cards
based on signed copy of the RIS;
• Net Realizable Value (NRV) of Inventories
Medicines (at cost):
Paracetamol (1,000pcs @ 40/pc) 40,000
Ampicilin (1,000pcs @45/pc) 45,000
Total 85,000
Accounting Entry:
• To record the cost of expired inventories
Account Dr Cr
Inventories Expense (due to expiration) 21,000
Inventories 21,000
To recognize the cost of expired
inventories
Illustrative Entries
a. Receipt of Supplies based on the PO/ DR attached to the AIR
Account Dr Cr
Inventories xx
Accounts Payable xx
To recognize the receipt of inventories
b. Payment
Account Dr Cr
Accounts Payable xx
Cash in Bank - LCCA xx
To record the payment of inventories
purchased
c. Issuance based on the SSMI
Account Dr Cr
Inventories Expense xx
Inventories xx
To recognize the issuance/distribution of
inventory