Accounting for Income, Collections and Related Transactions

Accounting for Income, Collections and Related Transactions

Receipts/Income Collections Deposit System This system covers the processes of  acknowledging and reporting income/collections, deposits of collections with Authorized Government Depository Bank (AGDB) or through the AGDB for the account of  Treasurer of the Philippines and recording of  collections and deposits in the books of  accounts of the agency.

All collecting officers shall: •

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Deposit intact all their collections. Record all deposits made in the Cash Receipts Record. Accomplish the Report of Collections and Deposits.

Govt. Income vs. Govt. Revenue Government Income -represents all funds received by the government from taxes, grants, aids and borrowings. Government Revenue -represents funds received, which do not increase any liabilities or reserves of the government.

2 General Classifications of Income: 1. Tax Revenue-encompasses all taxes imposed on taxable income, properties, and use or sale of  goods and services, taxes on international trade and transactions and other taxes including fines and penalties. Also included under these accounts are revenue generated from local government, schools and hospital operations.

2. General Income-encompasses all ltypes of  revenue/income generated by government agencies in the exercise of their administrative and regulatory function, income from public enterprises/investments, and income from grants and donations including subsidies.

Methods of Accounting for Income 1. Accrual Method 2. Modified Accrual 3. Cash Basis

Other receipts of National Government Agrncies shall be comprised of, but not limited to the following: 1. 2. 3. 4.

Refund of Cash Advances Receipts of Performance/Bidders/Bail Bonds Refund from Overpayment of Expenses Collections made on behalf of Another Agency or Private Companies 5. Intra-Agency Transfer Funds

General Procedures for Cash Collections

FROM DOMESTIC SOURCES: 1. The national government agency collects the revenue of the government from whatever source. 2. The agency remits the collections to the Bureau of  Treasury through the AGDB. 3. The AGDB advice the Bureau of Treasury. 4. The Bureau of Treasury records the collections in its books. 5. The Bureau of Treasury replenishes its Modified Disbursement (MDS) account/s with the bank for checks negotiated.

FROM FOREIGN SOURCES: 1. Foreign Funding Institution remits the amounts in foreign currency to the BSP. 2. The BSP advises the Bureau of Treasury of the receipt of the foreign currency remittance. 3. The Bureau of Treasury record the receipt in its books in peso value equivalent. 4. Upon receipt of the Notica of Cash Allocation from the DBM, the Bureau of Treasury advises the bank to transfer the cash to the agency. 5. The government agency records the NCA in its books.

Types of Collections 1. Without authority to use 2. With authority to use 3. Authority with limitations 4. Income from sale of equipment 5. Grants and donations intended for agency use 6. Miscellaneous collections

Receipt and Collection Process The collecting officer: 1. receives payment from creditors and issues official receipt. 2. records collections in Cash Receipt Record. 3. deposits collections. 4. deposit in Cash Receipt Record. 5. prepares the Report of Collections and deposits and forwards to accounting unit with copies of  official receipts and validated Deposit Slips. 6. The accounting unit prepares the Journal Entry Voucher and records in Cash Receipt Journal.