MISCELLANEOU

S
TRANSCATIONS
Prepared by

Sophia April C. Sanes

STALE MDS AND

COMMERCIAL
CHECKS
Checks may be cancelled when it become stale.

The depository bank considers a check stale, if it has been

outstanding for over six months from date of issue or as

prescribed.

A stale check shall be marked cancelled on its face and

reported as follows:

Unclaimed stale checks which are still with Cashier shall be cancelled

and reported in the List of Unreleased Checks as cancelled. The

List of Unreleased Checks is attached to the RCI (Reports of Checks
Issued).
For stale checks which are in the hands of the payees or holders in due
course and requested for replacements, new checks maybe issued
upon submission of stale checks to the accounting unit. A certified copy
of the previously paid DVs (disbursement vouchers) shall be attached to
the request for replacement. A JEV shall be prepared to take up the

ILLUSTRATION
A check issued by agency Lee Sod of the national
government in the amount of Php 10,000 becomes
stale. Accordingly, the stale check, which is still in
the possession of the payee, was cancelled and
new check is issued for replacement. Since, the
check was issued in the previous year, the
corresponding NCA was requested in the same
year and received in the current year.

Check issued in the current/prior year for replacement

Particulars

Account Title

Acct.
Code

Debit

Check cancellation

Government Equity

3-01-01-010 10,000

Accounts Payable

2-01-01-010

Receipt of NCA for prior

year account

Cash-MDS,Regular

1-01-04-040 10,000

Subsidy from National

Government

4-03-01-010

Issuance of a new check

Accounts payable

2-01-01-010 10,000

Cash-MDS, Regular

1-01-04-040

Credit

10,00
0
10,00
0

10,00
0

To record the cancellation of stale check issued in the current year.

Particulars

Account Title

Acct.
Code

Check cancellation

Cash-MDS, Regular

1-01-01-040 10,000

Accounts Payable

2-01-01-010

Accounts payable

2-01-01-010 10,000

Cash-MDS, Regular

1-01-04-040

Issuance of a new check

Debit

Credit

10,00
0

10,00
0

CASH SETTLEMENT AND

DISALLOWANCE
There are payments made by disbursing officer by

cash or checks, which at post audit are

suspended/disallowed by the resident auditor.
Contingent accounts shall no longer be used.
Disallowed payments which become final and
executory shall be recorded under receivable as,
Receivable-Disallowance Charges.

ILLUSTRATION
The resident auditor of agency Keith
disallowed payments made by the
disbursing officer of Agency Keith in the
amount of Php 10,000, which pertains to
overstatement of expenses in prior year.
Accordingly, the disbursing officer settled
the disallowance.

Case 1. If the disallowance is not recorded in the books (AR was recorded)

Particulars
Collection of settlement

Account Title

Cash-Collecting Officer

1-01-01-010

Government Equity

3-01-01-010

Government Equity

3-01-01-010

Remittance of the Bureau of

Treasury

Books of Agency Keith

Acct.
Code

Cash-Collecting Officer
Books of Bureau of Treasury Cash in Bank-LC,
Savings Account
Government Equity

1-01-01-010
1-01-02-030
3-01-01-010

Debit

Credit

10,00
0
10,00
0

10,00
0
10,00
0
10,00
0

10,00
0

Case 2. If the disallowance was taken up as receivable

Particulars
Collection of settlement

Account Title

Cash-Collecting Officer

Acct.
Code

1-01-01-010

Receivable1-03-05-010
Disallowance/Charges
To record of remittance of the Bureau of Treasury
Books of Agency Keith
Subsidy from National
4-03-01-010

Government
Cash-Collecting Officer 1-01-01-010
Books of Bureau of Treasury Cash in Bank-LC,
Savings Account
Other Service Income

1-01-02-030
4-02-01-990

Debit

Credit

10,00
0
10,00
0
10,00
0
10,00
0
10,00
0

10,00
0

Case 3. If the overstatement of expenses pertains to the current year

Particulars
Collection of settlement

Account Title

Acct.
Code

Cash-Collecting Officer

1-01-01-010

Accounts Receivable

1-03-01-010

To record of remittance of the Bureau of Treasury

Books of Agency Keith
Subsidy from National
4-03-01-010

Government
Cash-Collecting Officer 1-01-01-010

Debit

Credit

10,00
0
10,00
0
10,00
0
10,00
0

SETTLEMENT OF CHARGES
If the suspension/disallowance is for the current year, the

settlement is a reduction of the expense if the charge increase

the income. The settlement therefore is credit to the
appropriate expense of income account.

If the suspension/disallowance pertains to the prior year, since

the nominal account of the prior years were already closed to

the income and expense Summary/Retained Operation Surplus
account, these can no longer be reduced/increased. It shall be
recorded as credit to Government Equity account.

ILLUSTRATION
The disbursing officer of Agency Kohg Mou of the
national government settled its accountability in
the amount of Php 15,000. However, the
resident auditor of Agency Kohg Mou found that
his accountability was Php 20,000 due to
disallowance of several payments made by the
disbursing officer. When informed the disbursing
officer settled the charges.

 Case. 1 If the disallowance of Php 15,000 was made during the prior year and
settled in the same year, and the resident auditor discovered the additional
disallowance in the current year
Particulars

Additional Charges

Settlement of
Disallowance

Account Title

Receivables
Disallowances/ Charges
Government Equity

Account Code

Debit

1-03-05-010 5,000
3-01-01-010

Cash Collecting officer 1-01-01010

Receivables
1-03-05Disallowances/ Charges 010

Credit

5,000

5,000

5,000

 Case. 1 If the disallowance of Php 15,000 was made and settled during the
current year, and the resident auditor discovered the additional disallowance in the
same current year
Particulars

Additional Charges

Settlement of
Disallowance

Account Title

Receivables
Disallowances/ Charges
Other Services Income

Account Code

Debit

1-03-05-010 5,000

04-02-01990
Cash Collecting officer 1-01-01010
Receivables
1-03-05Disallowances/ Charges 010

Credit

5,000

5,000

5,000

REFUND OF OVERPAYMENT
Sometimes overpayments or even double payments of

expenditures do happen in agencies. These could be avoided

with the institution of proper controls but some could not be
avoided because of built-in procedures. One example is the
payment of payrolls. Payrolls are prepared in advance and
some agencies pay their employees through the banking
system. All these are done before reports of attendance are
submitted, making it impossible to know the exact amount to
be paid in case there are absences without pay during the pay
periods. In case of overpayments, refunds shall be demanded
of the employees concerned.


Particulars

Account Title

To record overpayment of
salaries and wages (When
overpayment is
ascertained)

Account
Code

Debit

Credit

Due from Officers

1-03-05and Employees
010
Salaries and Wages
Regular Pay
5-01-01010

5,000

5,000

To record refund of
overpayment

Cash Collecting
Officer
Due from Officers
and Employees

1-01-01010

1-03-05020

5,000

5,000

To record deposit of collection to the Bureau of Treasury

Particulars

Account Title

Acct.
Code

Debit

Books of Agency XY

Subsidy from Natl

Government
Cash Collecting
Officer

4-03-01-010

1-03-05-010

5,000

Books of Bureau of
Treasury

Cash in Bank-LC,
1-01-02-030
Savings Account
Other Service Income 4-02-01-990

Credit

5,000

5,000
5,000

In case receivable account for the refund of overpayment was not set up

Particulars

Account Title

Account
Code

To record overpayment of
salaries and wages

Cash Collecting
1-01-01Officer
010
Salaries and Wages
Regular Pay
5-01-01010

Debit

Credit

5,000

5,000

To record deposit of collection to the Bureau of Treasury

Particulars

Account Title

Acct.
Code

Debit

Books of Agency XY

Subsidy from Natl

Government
Cash Collecting
Officer

4-03-01-010

1-03-05-010

5,000

Cash in Bank-LC,
1-01-02-030
Savings Account
Other Service Income 4-02-01-990

5,000

Books of Bureau of
Treasury

Credit

5,000

5,000