Module 4 71

Module 4
Government Accounting

T he accounting system is the foundation

of all financial management functions.
It supports agency budgets, purchasing, in-
Objectives
ternal control, and preparation of finan-
cial reports, among others. In government At the end of this module,
organizations, there are staff specialists you should be able to:
tasked to handle specific tasks: the budget
officer handles the budget; the accountant 1. Define the scope of gov-
performs accounting tasks; the supply of- ernment accounting;
ficer is in charge of procurement, etc. This 2. Describe the accounting
leaves financial management to the staff, system in government;
when it is as much a concern of manage- 3. Identify the different kinds
ment. The accounting system should be of government funds and
linked to organizational goals and budget their importance; and
priorities. 4. Be familiar with the stan-
dard government chart of
Government accounting is discussed in accounts and coding sys-
two modules—this one and the next. It is tem.
important to familiarize yourself with the
basic principles of government accounting. I'm sure your offices have the
three-volume Government Accounting and Auditing Manual (GAAM) pub-
lished by COA. The personnel who frequently use the Manuals are the
budget officers, accountants, auditors, and administrative and supply of-
ficers. But as a government manager, you should be familiar with the
manuals as well.

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Definition of Government Accounting

Section 109, Chapter I, Article II of PD 1445 defines government account-
ing as follows:

Government accounting “encompasses the process of analyzing,

recording, classifying, summarizing, and communicating all trans-
actions involving the receipt and disposition of government funds
and property, and interpreting the results thereof.”

This implies that the main purpose of accounting is to provide useful in-
formation to decision makers. Government accounting is expected to gen-
erate and report information on the financial position and results of op-
eration of government as a basis for policy and administrative decisions.
(Briones, 1996)

Objectives of Government Accounting

Government accounting is designed to serve two purposes:

1. To satisfy the accountability requirements of those responsible for the

conduct of government activities and operations; and
2. To have control of government resources.

There are a number of fundamental objectives that an effective account-

ing system should seek to achieve. They include the following:

• Produce information: provide information concerning past operations

and present conditions to appropriate officials, oversight agencies, and
creditors in the form, frequency, and timeliness desired.
• Provide a basis for guidance for future operations.
• Accountability: hold officers and employees responsible and account-
able for the safeguarding of money and property entrusted or assigned
to them.
• Provide for control: ensure that public expenditures are limited to the
purposes and amounts legally authorized.
• Internal and external reporting: report on the financial position and
results of operations of government agencies for the information of all
persons concerned.

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The Accounting System

Figure 4-1 presents the basic elements of an accounting system. The pro-
cess consists of classifying and summarizing the information contained in
the records so that it can be used to prepare the organization’s budget
reports and financial statementsthe systems output. (Briones, 1996; Gar-
ner, 1991:115)

INPUTS PROCESS OUTPUTS

Revenue and Reviews of Internally
expenditure proposed approved
estimates budgets budgets

Figure 4-1. The Accounting System

(Adapted from Garner, 1991)

As a process, accounting involves a series of activities pertaining to the

gathering of data used as basis for policy and management decision mak-
ing. These activities include:

• Bookkeeping, which involves recording and analysis;

• Posting, grouping, or classifying similar items (arranging items accord-
ing to account classification, liquidity or nature);
• Preparing periodic financial reports such as trial balances, financial
statements, and supporting schedules; and
• Analyzing the financial reports to determine accuracy and adequacy,
as well as efficiency and effectiveness of government operations.

In sum, accounting is a tool of the controlling process directed at collect-

ing, recording, summarizing, reporting, and analyzing the financial trans-
actions of an organization.

Government Accounting Systems

There are three types of government accounting systems.

1. National Government Accounting

2. Local Government Accounting
3. Corporate Accounting

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National government accounting

This is used by departments, bureaus, offices, and field and operating
units of national government agencies (NGAs). The national government
accounting system consists of three interlocking subsystems under the
statutory responsibility of NGAs, the BIR, and the COA. The NGAs main-
tain a complete set of accounting records which are interlocked through
reciprocal accounts, with the records of cash transactions maintained by
the BIR and the general accounts kept by the COA. The BTr acts as the
bank and maintains the books for the control of the overall cash positions
of the national government. The COA keeps the general account and
maintains the books for the control of cumulative residual equity (current
surplus) of the national government.

The NGAs submit to the Accountancy Office of the COA the quarterly
trial balance duly verified by the auditors. The Accountancy Office con-
solidates the trial balance at the end of the year and, based on the consoli-
dation, prepares the financial statement for the government

In addition, at the end of the year, the NGAs submit to the auditor the
year-end financial statement, which in turn serves as basis of the latter’s
Audit Report.

Local government accounting

This is used by provinces, cities, and municipalities. LGUs maintain their
own records for cash, operating costs, and surplus, but at the end of the
year they are required to submit their trial balances and financial state-
ments to the Local Government Audit Office for a consolidated financial
report for LGUs.

Commercial/corporate accounting
This is used by the private sector but applied in GOCCs with proprietary
functions. Each corporation maintains its own set of books of accounts.
Each is also required to submit financial statements to the Corporate Au-
dit Office for a consolidated report on GOCCs.

Table 4-2 compares these three systems, including the books of accounts
that they use. Note the similarities and differences between these systems.

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Table 4-2. Government accounting systems

National Local Corporate

Sources of funds l National treasury l IRA l Revenue from

l Revenue from l Local taxes and operations
operations fees l Budgetary
l Taxes and fees l Donations support from
l Donations from l Local and the national
public/private foreign government
sources borrowings l Donations
l Local and foreign l Local and
borrowings foreign
borrowings

Existence of Exists (Congress Does not exist Does not exist

multiplity of appropriates funds;
functions BIR acts as a bank;
COA keeps general
account; agency
concerned uses
funds)

Books of l Special journals l JAO l Voucher

Accounts l Journal of Analy- l Journal of Dis- l Register/
sis of Obligations bursements by Accounts
(JAO) operations Treasurer or l Payable Register
l Journal of Dis- Disbursing l Cash Disburse-
bursements (JD) Officer ment Book
l Journal of Bills l JBR l Sales Book
Rendered (JBR) l JCD l JBR
l Journal of Collec l JCI l Cash Receipt
tions and l General Journal JCD
Deposits (JC) l General Ledger l Check Register
l Journal of Checks l Subsidiary l JCI
Issues (JCI) Ledger l General Journal
l General Journal l General Ledger
l General Ledger l Subsidiary
l Subsidiary Ledger Ledger

Public vs. Private Accounting

Government agencies operate under a different set of rules, and in a dif-
ferent political and administrative environment, than do business enter-
prises. However, there are many common practices that make govern-
mental and business accounting standards more alike than different.

Table 4-3 presents a summary of the characteristics of government ac-

counting compared to commercial accounting.

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Table 4-3. Comparison of government and commercial accounting

Commercial Government Accounting
Accounting

As to source of Law, rules and regulations Nature of business and policies

practice and of management management
procedures

As to control Fund accounting: a fund No fund accounting: the account-

mechanism is an accounting entity ing of money collected is not
where the accounting of separate and independent from
money collected and the accounting of the use/dis-
appropriated is separate bursement of said money collect-
and independent from ed. It is treated as one accounting
each fund. Separate books entity.
of accounts are kept and
maintained for each fund.

Obligation accounting: No obligation accounting.

provides the ceiling and
control to the commitment
of resources of the govern-
ment.

Notice of Cash Allocation: No disbursement ceiling

provides the ceiling and accounting.
control to cash utilization
of the government.

As to basis of The cash basis is used in Either cash or accrual basis

accounting accounting for revenue and but not a combination of both.
the accrual basis for en-
cumbrances and expendi-
tures.

As to books of The general fund opera- Ordinarily, only one set is kept
accounts tions of the government are except when there are branch
recorded and controlled in offices.
three sets of books of
accounts:
l Agencies Books
l BIR Books
l COA Books

As to system of Nominal estimates are Estimates, if recorded, are

accounts and recorded and accounted for. considered as memorandum
transactions Prescribed by COA. entries in accordance with the
GAAP as prescribed by PICPA,
AICPA.

Depreciation of fixed assets Depreciation of fixed assets

is accounted for as reduction is considered as an overhead
of investment surplus expense.
account.

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Table 4.3 continued...

Commercial Government
Accounting Accounting

As to the use of Corollary entry: assets No corollary entry: assets ac-

adjusting/correct- acquired through use of allot- quired are booked-up as a
ing entries ments and liabilities a contra-account to a liability or
incurred through loans/ equity/surplus account or
borrowings are recorded in an asset parted with. The lia-
the books of accounts bilities incurred through loans/
through a corollary entry, borrowing is booked-up as a
which is a journal entry contra account to an asset or
accounting for the value equity/surplus account or other
parted with or exchanged for. liability account.

Negative entry: used to No negative or red entry.

correct error in the use of Accounts to be corrected are
account or amount. either debited or credited.

As to form and Form: four money column Form: two money column
use of trial trial balance, debit balance, trial balance, debit and credit
balance debit totals, credit totals and balance columns.
credit balance columns.

Use: for analysis of opera- Use: proof of the equality of the

tions; reflects status of totals of the debit and credit
conditions of accounts. balances of accounts.

Source: Pobre, 1987:19-21

SAQ 4-1
1. What are the basic similarities and/or differences between
accounting in NGAs, LGUs, and GOCCs?

2. How is government accounting similar to (or different from)

commercial accounting?

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ASAQ 4-1
1. NGAs and LGUs have their own set of accounts. GOCCs
follow commercial accounting principles. The accounting
procedures may differ in terms of sources of funds, existence of
multiplicity of functions, and books of accounts used.

2. Government accounting may be distinguished from commer-

cial accounting in terms of the following:
• source of accounting practice and procedures
• control mechanism
• basis of accounting
• books of accounts
• accounts and transactions
• use of adjusting/correcting entries
• form and use of trial balance

Characteristics of Government Accounting

We have made a differentiation between government accounting and
commercial accounting in our previous discussion. Here, we will further
identify some unique characteristics of state or government accounting
systems (Briones, 1996:73).

Legal basis
Government or state accounting is strictly anchored on specific laws, stan-
dards, rules, and regulations. Such rules and regulations are promulgated
exclusively by the COA. Only in the absence of specific laws or rules and
regulations may the government accountant follow generally accepted
accounting principles (GAAP).

GAAP, according to Briones, consist of the body of conventional and rec-

ognized methods of handling accounting data and preparing financial
statements and are intended to achieve the basic accounting objective of
providing useful accounting information. In case of conflict between GAAP
and legal provisions, the latter prevails.

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Modified accrual system (or cash and accrual)

The law does not expressly state when income and revenue should be
booked up. In practice, government accounting uses the cash basis in ac-
counting for revenue. This means the recognition of revenue only at the
time cash is received. Revenues that remain unrealized, as in the case of
taxes, shall not be booked up.

In the case of expenditures and obligations, PD 1445 explicitly rules that

accounting for expenditures and obligations is strictly on accrual basis.
This means the recognition of expenses when they are incurred regard-
less of whether paid in cash or on account.

Use of Standard Government Chart of Accounts

(SGCA)
To effect uniformity in accounting and reporting, facility in consolidation
of financial reports, and adaptability to computerization, government
accounting is unified through the use of the Standard Government Chart
of Accounts (SGCA).

The SGCA is a list of ledger accounts used by all government offices, ex-
cept financial institutions. It consists of two sets of accounts, shown in
Table 4-4.

Table 4-4. The SGCA

Sets of accounts Purpose/definition

Balance Sheet These are general ledger

Accounts accounts for:
l Assets
l Liabilities
l Residual equity or capital

Budget/Operation These accounts refer to:

Accounts l Income/Receipts Account
l Expenditure Accounts

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Coding structure

The balance sheet accounts are real or permanent accounts, that is, their
balances are carried over from year to year. Real accounts are those found
in the Balance Sheet Accounts. Examples are Current Assets and Current
Liabilities. The code number of these accounts is a single digit number 8.

Revenues, expenses, and obligations are also called nominal accounts since
they are used for one budget period. Examples are taxes, operating and
miscellaneous revenues, and other items found in the Income and Opera-
tion Accounts. The code number of these accounts is a single digit from 0
to 7. At the end of the budget year, the accounts are closed to a zero
balance and then opened as new accounts in the new budget period.

The major code refers to the broad classification of accounts. These are
two-digit numbers. For example, “Current Assets” with a Statement Code
of 8 can be classified further into Cash, Receivable, or Inventories with
major codes of 70, 71, and 72, respectively.

Minor codes have three-digit numbers representing a more specific classi-

fication of accounts. For example, “Cash” with a minor code of 70 can be
categorized further into Cash in Treasury with a minor code of 100, Cash
in Central Bank with minor code of 200, etc.

To illustrate, Account Code 8-70-100 means the following:

8 refers to Balance Sheet Account

70 refers to Asset Account
100 refers specifically to Cash Account

The coding structure systematizes recording; facilitates analysis; and ex-

pedites, consolidates, and enhances reporting. The pattern of general led-
ger accounts is as follows:

0 - 00 – 000

• Statement Sequence Code

• Major Code - two digits for broad account classification, such as

01 to 50 expense accounts
51 to 69 income accounts
70 to 80 asset accounts
81 to 89 liability accounts
90 to 99 residual equity (surplus) and capital accounts.

• Minor Code --three digits for the sub-classification of

more specific items within a major code (account)

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Expenditures are also coded based on the function for which these are
incurred.

The coding object classification is as follows:

100 Personal Services

200 Maintenance and Other Operating Expenses
300 Capital Outlay

The coding function or sector classification is as follows:

100 General Public Services

200 National Defense
300 Education, Culture, Sports and Manpower Development
400 Health, Nutrition and Population Control
500 Labor and Employment
600 Housing and Community Development
700 Social Security Services and Welfare
800 Economic Services

The SGCA uses the letters N, L and C to represent national, local, and
corporate accounts which are prescribed for adoption and use, respec-
tively.

There are also block codes for accounts and funds, as follows:

Block Codes for Accounts

Accounts Classification

01 to 50 Expense accounts
51 to 69 Income accounts
70 to 80 Asset accounts
81 to 89 Liability accounts
90 to 99 Residual equity (surplus)
and capital accounts.

Block Codes for Funds

Funds Classification

101 to 199 General Fund

201 to 299 Special Funds
301 to 399 Bond Funds
401 to 499 Fiduciary Funds
501 to 599 Depository Funds
601 to 699 Redemption Funds
701 to 799 Sinking Funds

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Three sets of books of accounts

Government accounting has three sets of books of accounts:
1. The National Cash Accounts books maintained by the Bureau of
Treasury for the control of the over-all cash position of the national
government;
2. The Cumulative Results of Operations Unappropriated (CROU)
books (current surplus account books) of the COA to monitor na-
tional government residual equity (surplus); and
3. The Agency books maintained by the agencies to record their finan-
cial operations.

Books of Accounts are of two types:

1. Books of original entry - referring to journals or records for classifying
and recording transactions in chronological order; and
2. Books of Final Entry - referring to ledgers or records for classifying and
summarizing the effects of transactions on individual accounts.

Transactions are usually recorded in the books of original entry or jour-

nals. For transactions that are common and routine, special journals are
used to facilitate and simplify recording. The special journals used in each
system of government accounting are as follows:

Table 4-5. Journals used in government accounting

National Local Government
Government Government Corporations

Journal and Analysis Journal and Analysis of Sales Register

of Obligations (JAO) Obligations (JAO) Cash Receipts
Journal of Disburse- Journal of Collections and Book/Register
ments (JD) Deposits (JCD) Cash Disbursement
Journal of Checks Journal of Disbursements Book/Register
Issued (JCI) by Treasurer/Disbursing Check Register
Journal of Bills Officer
Rendered (JBR) Journal of Checks Issued
Journal of Collections (JCI)
and Deposits (JCD) Journal of Bills Rendered
(JBR)

• The Journal and Analysis of Obligations (JAO) is used to record re-

leases of allotments and obligations incurred. Data is taken from the
Advice of Allotments (AA) and Request for Obligation of Allotments
(ROA).

• The Journal of Checks Issued (JCI) is used to record all checks drawn
by the agency against its current account with an authorized govern-
ment depository bank.

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• The Journal of Warrants Issued (JWI) is used to record all the bills ren-
dered by the agency against customers/debtors, in chronological order
and individually.

• The Journal of Collections and Deposits (JCD) is a summary of the

Report of Collections submitted by various collecting officers, includ-
ing the amount deposited at the National Treasury.

All three sectors use the journal voucher for recording in the General Jour-
nal transactions that are non-recurring as well as the opening, adjusting
and closing entries.

After all transactions are recorded in the general and special journals,
entries therein are posted in the General Ledger or the book of final entry.
When details need to be indicated for a particular general ledger control
account, these are posted in subsidiary ledgers.

The SGCA is found at the end of this module. Familiarize yourself with
the accounts used in national government agencies, local government
units, and government corporations.

Negative entries
The use of negative or correcting entries is unique in government account-
ing. The process is to record erroneous entries again but in the negative so
that when totals are derived, the amounts erroneously entered are auto-
matically removed. The amount corresponding to a negative entry is en-
closed in parentheses.

As a correcting entry, it is used only when certain conditions are all present;
otherwise, the correcting entry will be done as it is in commercial
accountingthat is, by reversing the entries. The conditions are as fol-
lows (Pobre, 1987:15):

• The erroneous entry can no longer be corrected by merely crossing the

entry; and
• Both the erroneous entry and the correcting entry are made during the
current year.

As an adjusting entry, the negative entry is prescribed to reduce the amount

to the actual amount used, incurred, or realized in operations.

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Fund accounting
In government accounting, the accounting entity is the fund. An account-
ing entity, as defined by Briones (1996), is the object of accounting mea-
surement and reporting. In the private sector, the whole business enter-
prise is considered as an accounting entity.

A fund is an accounting entity with a self-balancing set of accounts re-

cording cash and other financial resources; together with all related li-
abilities and residual equities or balances, and changed therein, which
are segregated for the purpose of carrying on specific activities or attain-
ing certain objectives. Basically, it is like keeping different pockets (funds)
for monies intended for different purposes.

Section 135, Title I, Book III, Vol 1 of the GAAM defines a fund as “a sum
of money or other resources set aside for the purpose of carrying out spe-
cific activities or attaining certain objectives in accordance with special
regulations, restrictions, or limitations, and constitutes an independent
fiscal and accounting entity.”

In other words, a fund is considered a complete accounting entity, having

its own assets, liabilities, revenues, expenditures, and surplus. Each fund
is treated as an independent and distinct fiscal entity with a self-balanc-
ing set of accounts and this refers to fund accounting.

Types of government funds

Government funds are either NG funds or LG funds.

National Government Funds. National government (NG) funds are gen-

erally classified as follows:

1. General Fund - the fund which is available for any purpose for which
the legislative body may choose to apply; it is composed of the receipts
or revenues which are not by law or by contractual agreement appli-
cable to a specific purpose(s).

2. Special Fund - refers to the fund created for a special purpose or object
and used to defray specific expenditures or classes of expenditures. All
money or any tax levied for a special purpose or object shall be treated
as a special fund and paid out for such purpose only.

3. Bond Fund - refers to the fund arising from bonds floated by the gov-
ernment for specific purposes such as permanent public improvements.

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4. Fiduciary or Trust Fund - a government fund which has officially come

into the possession of the government as trustee, agent, or administra-
tor, or a fund received as a guarantee of the fulfillment of some obliga-
tion.

5. Depository Fund - a government fund over which the officer account-

able may retain control for the lawful purposes for which the same
came into his/her possession, being subject to his/her official check for
such purposes.

6. Redemption Fund - refers to the fund established for the purpose of

extinguishing indebtedness or reacquiring capital stock.

7. Sinking Fund - refers to the sum of money periodically segregated suf-

ficient to retire bonds or other debts at specific or stated intervals.

In PD 1177, the national government adopted the “one-fund” concept in

budgeting, whereby all revenues and receipts accrue to a single General
Fund. A number of decrees were issued establishing a limited number of
special funds intended for certain major projects requiring substantial
funding. Under PD 1234, all such special funds were converted into spe-
cial accounts in the General Fund.

Local Government Funds. The classification of funds at the local govern-

ment (LG) level is as follows:

1. General Fund - consisting of monies and resources which are available

for the payment of expenditures, obligations, or purposes not specifi-
cally declared by law as accruing and chargeable to, or payable from,
any other fund.

Special accounts are maintained in the General Fund for the following:
• Public utilities and other economic enterprises
• Loans, interests, bond issues, and other contributions of specific pur-
poses
• Development projects funded from the share of LGUs in the IRA

2. Special Funds

2.1 Education Fund - consisting of the respective shares of provinces,

cities, municipalities, and barangays in the proceeds of the addi-
tional tax on real property, to be appropriated for the operation
and maintenance of public school buildings, facilities and equip-
ment, educational research, purchase of books, and periodicals, and
sports development as determined and approved by the local school
board.

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2.2 Trust Fund - consisting of private and public monies which have offi-
cially come into the possession of the local government or a local gov-
ernment official as trustee, agent or administrator, or which have been
received as a guaranty for the fulfillment of some obligation.

Double-entry system
Double-entry accounting is a process in which an algebraic method is
used to ensure that an accounting system is self-balancing. The equality
of an equation creates the self-balancing feature. To maintain equality in
the double-entry system, the amounts debited should always equal the
amounts credited. If certain totals in reports and statements are not equal,
there is an error that must be identified.

Government accounting uses double-entry bookkeeping. Under this sys-

tem, three basic elements define the financial position of an agency, namely:

• Resources of the agency refer to the actual assets of an agency of the

government such as cash, instruments representing or convertible to
money, receivables, land, buildings, equipment, as well as contingent
assets;
• Claims of creditors refer to liabilities; and
• Equity of the government as owner/proprietor computed as assets less
liabilities.

The self-balancing feature of the double-entry method is also important in

ensuring the accuracy of the statements. This accuracy is dependent on
correct bookkeeping entries being made to input information into the sys-
tem, the processing of this information from the initial entries through the
system without error, and finally, the proper output of the information in
the financial statements.

Accounting is often confused with bookkeeping. However, these terms have

distinct meanings. Simply put, bookkeeping is the act of recording business
transactions; accounting uses the bookkeeping records in a planned system
designed to protect the revenue and resources of the organization and to
create financial reports and statements. (Garner, 1991: 11)

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Financial statements
Financial statements are the end products of the financial accounting process.
They reflect the financial position of an agency at a moment in time. Agencies
have to report the results of their operations and periodically communicate com-
prehensive information to end-users. Financial statements consist of the follow-
ing:

• Balance Sheet, which shows the assets, liabilities, and residual equity (surplus)
of an agency; and
• Statement of Operations, which shows the elements entering into the compu-
tation of the net income/loss.

A module on how to analyze financial statements is provided in this manual.

Financial reports
Financial reports prepared by agencies are based on trial balances and financial
statements. The trial balance is a complete listing of totals and balances of control
accounts. It may be preliminary or final.

Government agencies submit their financial reports to the President, the Depart-
ment of Finance, DBM, COA, and other oversight bodies.

Internal control system

This refers to the plan of organization and all the coordinate methods and mea-
sures adopted within an organization to safeguard its assets, check the accuracy
and reliability of its accounting data, promote operational efficiency, and encour-
age compliance with prescribed policies and regulations.

We devote an entire module to internal control in this manual.

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SAQ 4-2
1. What is accrual basis and cash basis in accounting?

2. What are balance sheet accounts? What are the budget or

operations accounts?

3. What are the two types of books of accounts?

4. Why does government use negative entries?

5. What is double-entry accounting?

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ASAQ 4-2
1. The cash basis is used in accounting for revenue. By means of the
cash basis, revenue is recorded only at the time cash is received.
Revenues that remain unrealized as in the case of taxes are not
booked up. The accrual basis is used in taking up expenditures and
obligations. This means the recognition of expenses when they are
incurred regardless of whether paid in cash or on account.

2. Balance sheet accounts are general ledger accounts for assets, liabili-
ties, and residual equity or capital. Budget or operations accounts
refer to the income/receipts account, and expenditure accounts.

3. The two types of Books of Accounts are: (1) Books of original entry,
referring to journals or records for classifying and recording transac-
tions in chronological order, and (2) Books of Final Entry, referring to
ledgers or records for classifying and summarizing the effects of
transactions on individual accounts.

4. The use of negative or correcting entries is a process of recording

erroneous entries again but in the negative so that when totals are
derived, the amounts erroneously entered are automatically removed.
The amount corresponding to a negative entry is enclosed in paren-
theses.

As a correcting entry, it is used only when the following conditions

are all present:

• The erroneous entry can no longer be corrected by mere crossing

the entry; and
• Both the erroneous entry and the correcting entry are made
during the current year.

As an adjusting entry, the negative entry is prescribed to reduce the

amount to the actual amount used, incurred, or realized in opera-
tions.

5. Double-entry accounting is a process in which an algebraic method

is used to ensure that an accounting system is self-balancing. To
maintain equality in the double-entry system, the amounts debited
should always equal the amounts credited. If certain totals in
reports and statements are not equal, there is an error that
must be identified.

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References

Briones, LM. (1996). Philippine public fiscal administration, Volume II. Fiscal
Administration Foundation, Inc.
Commission on Audit. (1992). Government accounting and auditing manual,
Volumes I, II, and III.
Garner, CW. (1991). Accounting and budgeting in public and nonprofit orga-
nizations: A manager’s guide. San Francisco: Jossey-Bass Publishers.
Pobre, HP and AB Magno, (1980). Government accounting: A self-instruc-
tional approach.

UP Open University