7.4 Illustrative Accounting Entries



7.4.1 Pro-forma accounting entries for property and equipment

Upon receipt of duplicate copies of DV and its supporting documents (PO and AIR), the

C/M Accountant shall record the Property and Equipment in the appropriate journals and
ledgers. The C/M Accountant shall record the property and equipment in the PELC.

a. Purchase of property and equipment

Account Title Dr. Cr.

Office Equipment
Information and Communication
Technology Equipment
Motor Vehicle
Due to BIR
Accounts Payable
xx
xx

xx





xx
xx

To record the receipt of the delivery of property and/or equipment



b. Payment of property and equipment

Account Title Dr. Cr.

Accounts Payable
Cash-in-Bank, LCCA
xx


xx

To record the payment of the purchased property and/or equipment



c. Receipt of donations in kind from all sources

Account Title Dr. Cr.

Office Equipment
Information and Communication
Technology Equipment
Motor Vehicles
Grants and Donations in Kind
xx


xx





xx

To record receipt of donated equipment



d. Recognition of depreciation expenses

Account Title Dr. Cr.

Depreciation - Buildings
and Other Structures
Depreciation - Motor Vehicles
Acc. Depreciation - Buildings
and Other Structures
Acc. Depreciation-Motor Vehicles

xx
xx








xx
xx

To record depreciation expense



e. Disposal of unserviceable property and equipment


(1) Disposal thru sale (above net book value)

Account Title Dr. Cr.

Cash - In Local Treasury
Acc. Depreciation - Vehicles
Gain on Sale of Assets
Motor Vehicles
xx
xx




xx
xx

To record sale of unserviceable motor vehicle above net book value



(2) Disposal thru donation

Account Title Dr. Cr.

Donations
Acc. Depreciation - Vehicles
Motor Vehicles
xx
xx



xx

To record disposal thru donation of motor vehicle



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