6.Prep of Trial Balance

8/13/2019 6.Prep of Trial Balance

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Preparation

of

Trial Balance

Under the

NGAS


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Purposes of the Trial Balance

To prove the mathematical equality ofthe debits and credits after posting;

To uncover errors in journalizing andposting; and

To serve as basis for the preparation ofthe financial statements.


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The Trial Balance Preparation

Under the NGAS

Procedures:

1. Complete the heading;

2. From the General Ledger, list the accounts with balances as

of the Trial Balance date (Unadjusted TB);3. Show the total of the debit and credit columns;

8. Sign the certification.

4. Prepare the adjusting entries and post to the appropriatecolumn in the worksheet and the General Ledger;

5. Compute for the adjusted balances of the accounts andextend the same under the Pre-Closing TB column;6. Prepare Closing Entries and post to the worksheet and the

General Ledger;7. Prepare the Post-Closing Balances of the accounts; and


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Certified Correct:

Chief Accountant

Account Title Code Debit Credit

Cash-Natl.Treasury, MDS 108 11,900

Advances to Officers and Employees 148 800

Other Receivables 149 1,000

Office Supplies Inventory 155 500

Construction Matrls. Invty. 168 300

Prepaid Rent 177 1,200

Prepaid Insurance 178 600Prepaid Interest 179 2,400

Office Equipment 221 10,000

Accounts Payable 401 10,000

Due to GSIS 413 700

Government Equity 501 1,600Subsidy Income from NG 651 40,000

Electricity 767 3,600

Salaries & Wages-Reg.Pay 701 20,000

Total 52,300 52,300

Department ABC

Trial Balance

(RA Books) (Unadjusted)

As of December 31, 2011


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Worksheet

The Work Sheet, has been defined as acolumnar sheet of paperon which accountants have summarized information needed toprepare the adjusting and closing entries and to prepare thefinancial statements. It is also a useful tool for theauditor in his/her analysis and examination of the accounts. Thepreparation of worksheet is optional with the following suggestedformat:

Accounts

Unadjusted

Trial

Balance

Adjustme

nts

Adjusted/Pre-

Closing

Trial

Balance

Closing

Entries

Statement

of Income

and

Expenses

Post-

Closing

Trial

Balance

Balance

Sheet

Title Code Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr.


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Under the matching principle, adjustments should be made foreconomic activities that have taken place but are not yetrecorded at the time when the financial statements areprepared. There are of two main types: accrued items anddeferred items.

AdjustingJournal Entries

Adjustments for Accrued Items:

An accrued item is an adjusting entry for an economic activityalready undertaken but not yet recorded into an asset andrevenue accounts or a liability and expense.

Adjustments for Deferred Items:

A deferred item is an adjusting entry transferring datapreviously recorded in an asset account to an expense account,or data previously recorded in a liability account to a revenue

account.


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Adjusting Entries Dr. Cr.

1. Depreciation - Office Eqp't 921 900

Accum. Depn - Offce Eqp't 321 900

To take up depreciation for the period

2. Bad Debts Expense 901 100

Allow. for Doubtful Accounts 301 100

To provide allowance for Doubtful accounts

3. Rent Expenses 782 1200

Prepaid Rent 177 1200

To record the expired portion of prepaid rent

4. Insurance Expenses 893 150

Prepaid Insurance 178 150

To record expired portion of prepaid insurance


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5. Interest Expenses 975 600

Prepaid Interest 179 600

To record expired portion of prepaid interest6. Office Supplies Expenses 755 300

Office Supplies Invty. 155 300

To record issuance of office supplies per Report of Supplies

and Materials Issued.

7. Repairs & Maint. -Office Bldg 811 200

Construction Materials Invty. 168 200

To record issuance of construction materials.8. Traveling Expenses-Local 751 300

Due from Officers & Empl. 123 300

To take up liquidation of travelling allowance

9. Prior Years' Adjustments 684 300

Due from Officers & Empl. 123 300

To take up liquidations of prior year's advance for TEV.

Dr. Cr.


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Adjusting Journal Entries:

A. Reversion of unutilized NCA at theend of the year (No check to issued, only JEV)

Subsidy Income from NG 651 xx

Cash- Natl. Treasury- MDS 108 xx

B. Restoration of cash pertaining to unreleased checks

at the end of the year (Prepare JEV on the last working

day of Dec.)

Cash - Natl. Treasury, MDS 108 xxCash in Bank, LCCA 111 xx

Accounts Payable 401 xx

Due to GSIS 413 xx


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Adjusting Entries cont..

Dr. Cr.

10. Cash - Natl. Treas, MDS 108 1,200

Accounts Payable or 401 1,200

Due to Officers and Employees

To restore the cash equivalent to the total amount

of unreleased checks as of Dec. 31, 2002.

11. Subsidy Income from NG 651 11,900

Cash - Natl. Treas., MDS 108 11,900

To take up reversion of unused NCA.


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Department of ABC

Trial Balance (RA Books)


Acct.

Account Title Code Debit Credit

Cash-NT, MDS 108 11,900

Advances toOfficers & Employee 148 800


Office Supplies Inventory 155 500

Construction Materials Invty. 168 300

Prepaid Rent 177 1,200

Prepaid Insurance 178 600

Prepaid Interest 179 2,400


Allowance for Doubtful Accounts 301

Accumulated Depr.-OE 321Accounts Payable 401 10,000

Due to GSIS 413 700

Government Equity 501 1,600

Income and Expense Summary 512

Prior Years Adjustments 684

Retained Operating Surplus 513

Subsidy Income from NG 651 40,000

Salaries & Wages - Regular Pay 701 20,000Travelling Expenses-Local 751


Rent Expense 782

Insurance Expenses 893

Office Supplies Expenses 755

Repairs & Maint. -Office Bldgs. 811

Depreciation - Office Equipment 921

Bad Debts Expense 901Interest Expenses 975

52,300 52,300

Unadjusted TB

Debit Credit

1,200 11,900

600

300

200

1,200

150

600

100

9001,200

300

11,900

300

1,200

150

300

200

900

100 600

17,150 17,150

Adjusting Entries


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Department of ABC



Acct.

Account Title Code Debit Credit Debit Credit

Cash-NT, MDS 108 11,900 1,200 11,900

Advances toOfficers & Employee 148 800 600


Office Supplies Inventory 155 500 300

Construction Materials Invty. 168 300 200

Prepaid Rent 177 1,200 1,200

Prepaid Insurance 178 600 150

Prepaid Interest 179 2,400 600


Allowance for Doubtful Accounts 301 100

Accumulated Depr.-OE 321 900Accounts Payable 401 10,000 1,200

Due to GSIS 413 700

Government Equity 501 1,600


Prior Years Adjustments 684 300


Subsidy Income from NG 651 40,000 11,900

Salaries & Wages - Regular Pay 701 20,000Travelling Expenses-Local 751 300


Rent Expense 782 1,200

Insurance Expenses 893 150

Office Supplies Expenses 755 300

Repairs & Maint. - Office Building 811 200

Depreciation - Office Equipment 921 900

Bad Debts Expense 901 100Interest Expenses 975 600

52,300 52,300 17,150 17,150

Unadjusted TB Adjusting Entries

Debit Credit

1,200

200

1,000

200

100

-

450

1,800

10,000

100

90011,200

700

1,600

300

28,100

20,000300

3,600

1,200

150

300

200

900

100 600

42,600 42,600

Pre-Closing


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Closing journal entries are general journal entries which closeout the balances of all nominal and intermediate accounts atthe end of the accounting period.

Nominal accounts i.e. income and expenses shall be closed tothe Income and Expense Summary account and the balance

shall be closed to the Retained Operating Surplus at the end of

the accounting period.

The balance of the Retained Operating Surplus account shall

be closed to the Government Equity account at the close of the

accounting period.

Closing Journal Entries


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Under the NGAS, any unutilized NCA (Cash, National

Treasury-MDS / Subsidy Income from NG) shall beadjusted prior to the closing of the accounts at year-end

because of the DBM policy that the NCA will only be valid

within the year of issue or as indicated on the NCA.

There is no need to issue an MDS check for remittance

to BTr.

Total NCA received P10,000

Total MDS Checks issued 9,800

Balance, December 31, 2004 P 200

Adjusting Journal Entry:

Subsidy Income from NG 651 200

Cash-Natl. Treas., MDS 108 200


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1.

2.

Income and Expense Summary 512 27,350

Salaries & Wages-Regular Pay 701 20,000

Traveling Expenses-Local 751 300


Rent Expenses 782 1,200

Insurance Expenses 893 150

Office Supplies Expenses 755 300

Repairs and Maint. - Office Bldg 811 200Depreciation - Office Equip. 921 900

Bad Debts Expense 901 100

Interest Expenses 975 600

To close the balance of expense accounts to Income and

Expense Summary

Subsidy Income from NG 651 28,100

Income and Expense Summar 512 28,100

To close the balance of Subsidy Income from NG

to Income and Expense Summary


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3.

4 Retained Operating Surplus 513 300 Prior Years' Adjustments 684 300

To close Prior Years Adjustment to Retained Operating Surplu

Income and Expense Summary 512 750

Retained Operating Surplus 513 750To close the balance of Income and Expense Summary

to Retained Operating Surplus.

5. Retained Operating Surplus 513 450Government Equity 501 450

To close the balance of Retained Operating Surplus to

Government Equity.

Department ABC


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Department ABC



Acct.

Account Title Code Debit Credit Debit Credit Debit Credit

Cash-NT, MDS 108 11,900 1,200 11,900 1,200

Advances to Officers & Employe 148 800 600 200

Other Receivables 149 1,000 1,000

Office Supplies Inventory 155 500 300 200

Construction Materials Invty. 168 300 200 100

Prepaid Rent 177 1,200 1,200 -

Prepaid Insurance 178 600 150 450

Prepaid Interest 179 2,400 600 1,800

Office Equipment 221 10,000 10,000

Allowance for Doubtful Accounts 301 100 100

Accumulated Depr.-OE 321 900 900Accounts Payable 401 10,000 1,200 11,200

Due to GSIS 413 700 700

Government Equity 501 1,600 1,600


Prior Years Adjustments 684 300 300


Subsidy Income from NG 651 40,000 11,900 28,100

Salaries & Wages - Regular Pay 701 20,000 20,000Travelling Expenses-Local 751 300 300

Electricity 767 3,600 3,600

Rent Expense 782 1,200 1,200

Insurance Expenses 893 150 150

Office Supplies Expenses 755 300 300

Repairs and Maint. - Office Bldg. 811 200 200

Depreciation - Office Equipment 921 900 900

Bad Debts Expense 901 100 100Interest Expenses 975 600 600

52,300 52,300 17,150 17,150 42,600 42,600

Unadjusted TB Adjusting Entries Pre-Closing

Debit Credit

450

28,100 28,100

300

750 750

28,100

20,000300

3,600

1,200

150

300

200

900

100 600

56,950 56,950

Closing Entries

Department ABC


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Department ABC



Acct.

Account Title Code Debit Credit Debit Credit Debit Credit Debit Credit

Cash-NT, MDS 108 11,900 1,200 11,900 1,200

Advances to Officers & Employees 148 800 600 200Other Receivables 149 1,000 1,000

Office Supplies Inventory 155 500 300 200

Construction Materials Invty. 168 300 200 100

Prepaid Rent 177 1,200 1,200 -

Prepaid Insurance 178 600 150 450

Prepaid Interest 179 2,400 600 1,800

Office Equipment 221 10,000 10,000

Allowance for Doubtful Accounts 301 100 100Accumulated Depr.-OE 321 900 900

Accounts Payable 401 10,000 1,200 11,200

Due to GSIS 413 700 700

Government Equity 501 1,600 1,600 450

Income and Expense Summary 512 28,100 28,100

Prior Years Adjustments 684 300 300 300

Retained Operating Surplus 513 750 750

Subsidy Income from NG 651 40,000 11,900 28,100 28,100

Salaries & Wages - Regular Pay 701 20,000 20,000 20,000

Travelling Expenses-Local 751 300 300 300

Electricity 767 3,600 3,600 3,600

Rent Expense 782 1,200 1,200 1,200

Insurance Expenses 893 150 150 150

Office Supplies Expenses 755 300 300 300

Repairs and Maint. -Office Bldg. 811 200 200 200Depreciation - Office Equipment 921 900 900 900

Bad Debts Ex ense 901 100 100 100

Unadjusted TB Adjusting Entries Pre-Closing Closing Entries


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The Trial Balance Preparation

Under the NGAS

Unadjusted

TB

Adjusting

Entries

Adjusted/

Pre-Closing

TB

ClosingEntries

Post ClosingTB

Generation ofFinancial Statements

6.Prep of Trial Balance

Documents

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