APPENDIX A                          

  PRINT - LANDSCAPE FORMAT / COLOR 

ACCOUNTING PROTOTYPE (YEAR 2001)

The color coded general ledger accounts that appear in the journal entries below 

compare on a one-for-one basis with the Chart of Accounts, glossary, and line 

item descriptions that appear in the integrated financial statements for Year 1 

and Year 2 in this web site.    

Record receipt of a Treasury Warrant issued by the federal 

(or any government) Treasury denoting that Congress has 

appropriated $600,000 in New Obligational Authority (NOA) 

for the purchase of an equivalent amount of goods and services.  

The money should be deposited in Treasury in accordance with 

sound cash management practices.  (For example, if $150,000 in 

budget authority is available each quarter, then, that is the amount 

that should be deposited in Treasury for each of those periods).                                  

(2) RECEIPT OF CASH ADVANCE (FROM WITHIN THE

     GOVERNMENT)                                                          

Approval of additional budget authority by Congress, or a comparable legislative 

body, after passage of the initial appropriation (identified as new obligational 

authority.

Current quarter budgets are recorded at the agency's department, branch, section, office ... 

levels and by asset / expense.  Cumulative effect of agency asset & expense budget is 

summarized below:

SUBSEQUENT QUARTERS BUDGET COMPUTATION

TREASURY WARRANT (600,000) 

CASH TRANSFERS        (60,000)                                            660,000

TREASURY WARRANT               (10,000) 

BUDGET RECEIPTS  B/P             (26,000) 

BUDGET RECEIPTS - REIMB.   (14,000)                                 50,000

CURRENT QTR BUDGET                          (200,000) 

BUDGET RESERVE - CONTINGENCY      (25,000)              225,000

     60,000

1 / 50,000

1/  50,000

1/  The $50,000 GLA funded budget debit indicates that $50,000 of the budget 

apportioned in subsequent quarters is not backed by Cash in Treasury (and will 

not appear on Treasury's Statement).  As moneys are collected, both GLA 

funded budget (debit) and unfunded budget (credit) account balances will 

decrease.  Assuming the final fourth quarter budget still has a funded budget 

debit at the end of the third quarter, the fourth quarter budget is decreased 

by that amount to prevent an anti-deficiency (overspending the budget).

2/ Governments, unlike private-sector businesses, identify their cash sources

 i.e. Treasury Warrant- 600,000; cash transfer - 60,000.  Despite this difference,

 total government cash sources always equal the private sector cash balance 

(600,000 + 60,000 = 660,000)

The Headquarters' Accounting Office records the above commitment (and reserves that portion 

of the budget) for the agency's "fixed costs "at the department, branch, section, office (not 

illustrated) and expense levels.  The program (or ordering office) records commitments of the 

variable portion of their budget each time goods/services are ordered.  These entries (essentially 

the same as the fixed costs) are illustrated later under the "variable expense" section.

The above journal entry includes the cumulative affect of the five line items that

were recorded against each of the following GLA's 

  ALLOWANCE FOR BAD DEBT          1,000

The Accounting Office records an obligation, via a formal procurement 

document (i.e. a contract) issued by the Procurement Office.

The Accounting Office records an obligation based on signed copies of an

obligating document received from the Procurement Office.

Reduce unfunded budget account that is now funded (and backed by 

Cash in Treasury) i.e. budget receipts.

Note: The accounting controls in this process (not illustrated) would prevent 

this entry from processing since: (1) the interest expense budget has been 

exceeded by $350 (750 - 400 budget).  Je 16D adjusting entry must be 

recorded first.

Decrease the Budget Reserve account to provide the necessary budget 

resources in the current quarter, as an audit trail.

Decrease the "current quarter budget" and record commitments, 

thereby providing the necessary budget resources to process JE 16C.

The Accounting Office records an obligation (via a formal procurement 

document issued by the Procurement Office) detailing the terms of the 

agency agreement.

1/  The $2,500 difference between the funded and unfunded budget accounts indicates that $2,500

 more was collected than initially anticipated (see JE 16A & 16B).  It also indicates that if this were 

the final quarter of the fiscally year that the current quarter budget would be decreased by $21,500 - 

the amount of the funded budget debit to prevent an anti-deficiency (overspending of the budget).

CURRENT QUARTER BUDGET                          23,000

     COMMITMENTS                                                           23,000

The initiating office commits or decreases its budget upon recording a procurement

in the agency finance system.  In addition, the procurement request is forwarded to 

the Procurement Office to prepare a purchase order (small purchase) or a contract.

The accounting office records Procurement's order (as detailed on the 

obligating document) to the vendor.

The initiating office commits its transportation equipment budget upon recording

 its procurement (using the GLA code and amount) in the agency finance system 

and forwarding a Procurement Request to the Procurement Office.

The Accounting Office records Procurement's order (as detailed on the 

obligating document) to the vendor.

The initiating office commits (or reserves) decreases its available travel 

budget.

If the expense applied was greater than the advance (assume $26,000), the 

following journal entry is made.  This journal entry is for illustration purposes 

only and is not included  in the Appendix B trial balance.

The initiating office commits or reserves its administrative supplies budget

upon recording its procurement (using the GLA code and amount) in the 

agency's financial system.

The Accounting Office pays for the administrative supplies ordered 

(typically with a credit card).  There is no formal obligation documentation.