71.2--1
WORKING CAPITAL FUND ACCOUNTING OPERATIONS HANDBOOK
CHAPTER 70 - ADJUSTMENTS
To prepare financial statements on an accrual basis, it is
necessary to make certain adjusting entries. These entries
include, for example, the recording of accrued income, accrued
expenses, accounts payable, depreciation, and changes in
inventories. Record the entries in the asset, liability,
income, and expense accounts and also in the general ledger. It
is necessary to reverse some adjusting entries in the ensuing
accounting period.
71 - MONTHLY ADJUSTMENTS
71.1 - Accounts Payable. Adjust the Working Capital Fund (WCF)
accounting records to include the expense for goods and services
received for which no payment has been made. Normally, the
National Finance Center makes these adjustments; however,
units/Regions must report any unsubmitted obligations on the
monthend unsubmitted obligations report (FSH 6509.11k, sec. 71).
When preparing the month-end unsubmitted obligations report,
enter only the account chargeable. Do not make a zero adjustment
entry by entering an offsetting entry to account 202 (accounts
payable). The Working Capital Fund Subsystem (WCFS)
automatically computes and enters account 202 into the system.
Do not include WCF account numbers in the 400 series in the
month-end unsubmitted obligations report. The 400 series
accounts are revenue related; report them on the month-end
accounts receivable report (sec. 71.2). This includes entries
in structured management codes 80X4XX and 90X4XX and in prestructured management codes 82XXXX and 84XXXX.
The system automatically reverses entries recorded on the
accounts payable reports at the beginning of the ensuing period.
71.2 - Accounts Receivable. Adjust the Working Capital Fund
(WCF) accounting records to include the revenue from goods and
services that have been furnished but for which no payment has
been received or processed. This includes documented items on
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71.2—2
WORKING CAPITAL FUND ACCOUNTING OPERATIONS HANDBOOK
uncollected billings: Form FS-500-89, Bill for Collection; Form
SF-1081, Voucher and Schedule of Withdrawals and Credits; and
Form AD-742, Transfer and Adjustment Voucher (unprocessed 81-R
T/C). Include WCF accounts receivable in the unit/Region monthend report of accounts receivable.
When preparing the month-end accounts receivable report, enter
only the accounts that the collection document lists. Do not
make a zero adjustment entry by entering an offsetting entry to
account 111 (accounts receivable) or account 202 (accounts
payable, if refund). The Working Capital Fund Subsystem (WCFS)
automatically computes and enters accounts 111 and 202 into the
system.
Exhibit 1 is a list of the transaction codes for use when
reporting WCF accounts receivable.
Do not use other transaction codes when reporting WCF accounts
receivable.
The WCFS automatically reverses entries recorded on the accounts
receivable report at the beginning of the ensuing period.
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71.2--3
WORKING CAPITAL FUND ACCOUNTING OPERATIONS HANDBOOK
Exhibit 1
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71.3--1
WORKING CAPITAL FUND ACCOUNTING OPERATIONS HANDBOOK
71.3 - Adjustment four Rejected Fixed Ownership Rate and Use
Charged to Management Code 879998. Invalid management codes
contained in the fixed ownership rate and use schedules convert
to management code 879998, which in turn converts to
appropriation Y97, function 000. It is necessary to make
current adjustments to transfer the amount in the default
management code 879998 to the proper management code. Make the
transfer on Form AD-42, Transfer and Adjustment Voucher, using
T/C 81-E. See exhibit 1 for an example.
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71.3--2
WORKING CAPITAL FUND ACCOUNTING OPERATIONS HANDBOOK
Exhibit 1
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71.4
WORKING CAPITAL FUND ACCOUNTING OPERATIONS HANDBOOK
71.4 - Adjustment for Proceeds Deposited to Management Code
879997. The General Services Administration usually transfers
the proceeds from the sale of property and equipment to the
Forest Service on Form SF-1081, Voucher and Schedule of
Withdrawals and Credits. A large portion of SF-1081 forms are
for the sale of Working Capital Fund equipment. Often the form
contains insufficient information, and the National Finance
Center must credit the proceeds to default management code
879997.
Management Code 879997 converts to:
Function
MAJ - SUB
000
00
Appropriation
Y97
Subunit
00
Project
00000001
The National Finance Center manually enters the default
management code, recording it in the following Region/unit
combination:
Region
Unit
Region
Unit
01
56
11
11
02
31
22
20
03
16
23
13
04
97
24
23
05
20
26
19
06
27
27
21
08
97
28
16
09
01
29
18
10
01
30
19
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71.5--1
WORKING CAPITAL FUND ACCOUNTING OPERATIONS HANDBOOK
The National Finance Center forwards a copy of the SF-1081 to
the Regions to assist them in preparing an adjustment on Form
AD-742, Transfer and Adjustment Voucher, to transfer the amount
in management code 879997 to the proper management code.
71.5 - Adjustment for Gasoline, Diesel, and Other Operational
Items Issued to Forest Service Pro rams and/or Other Agencies.
When issuing gasoline, diesel, and/or other operational items
(originally purchased using accounts 601 or 602) to other Forest
Service projects or other agencies, it is necessary to make an
accounting adjustment. An adjustment is also necessary when one
Working Capital Fund (WCF) activity issues to another WCF
activity any of these items it has purchased.
When issuing items to Forest Service programs or other WCF
activities, process the adjustment as a transfer of expenditure.
Process issues of gasoline, diesel, and/or other operational
items to other agencies as a "refund." See sec. 71.2 for the
transaction code for refund. In the adjustment, use the same
budget object code for the goods that was used at the time of
purchase.
Use Form FS-6400-11, Daily Record of Issues, to support the
document for adjusting the accounts.
If issuing items to other Forest Service programs or WCF
activities, use T/C 81-E on form AD-742 to make the adjustment
(ex. 1).
Use form SF-1081 to bill other Federal agencies (FSH 6509.11k,
ch. 30).
When processing an adjustment, attach a copy of form FS-6400-11
to form AD-742.
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71.5--2
WORKING CAPITAL FUND ACCOUNTING OPERATIONS HANDBOOK
Exhibit 1
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71.5--3
WORKING CAPITAL FUND ACCOUNTING OPERATIONS HANDBOOK
Exhibit 1 - Continued
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71.6
WORKING CAPITAL FUND ACCOUNTING OPERATIONS HANDBOOK
71.6 - Depreciation of Assets. The Equipment Management
Information System (EMIS) automatically computes depreciation
expense each month and enters the amounts of depreciation
expense (account 64X) and accumulated depreciation (account 16X)
associated with each type property and Working Capital Fund
(WCF) activity into the Budget Cost System. The National
Finance Center makes entries automatically in unit 97, subunit
97, for all activities except 012, 022, and 04X that appear on
the unit to which the equipment master file is assigned.
The EMIS computes monthly depreciation by dividing the undepreciated balance by the remaining months for depreciation.
The computation of depreciation is reported on EMIS Reports 26,
27, 28, 29, and 30 (ch. 80). Regional offices should make the
following checks on the depreciation runs:
1. Randomly compare the "remaining months" column with the
previous run to ensure that the number of remaining months has
been reduced only by one.
2. Compare the total of the "capitalized value" column for
WCF-owned equipment with the balance of the respective
activity/account from the balance sheet.
3. Compare the total of the "accumulated depreciation"
column for WCF-owned equipment with the balance of the
respective activity/account from the balance sheet.
4. Compare the current fiscal year's cumulative amounts in
the "current months depreciation" column for WCF-owned equipment
with the balance of the respective activity/account from the
income statement.
5. Verify that there is an entry in the "remaining months'
column for all items that have a balance in the "un-depreciated
value" column. Use Form FS-500-61, Fleet Equipment and Aircraft
(Accountability and Data Record), to establish remaining months
for any equipment with an un-depreciated value, but with no
months remaining.
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71.6--1
WORKING CAPITAL FUND ACCOUNTING OPERATIONS HANDBOOK
72 - QUARTERLY ADJUSTMENTS
72.1 - Adjustment for Aircraft Airworthiness and Overhaul
provisions, and Deferred Boat Maintenance (Extraordinary
Maintenance). Prepare adjustments quarterly to establish a
reserve for extraordinary maintenance of aircraft and large
(Ranger) boats. The Regional Working Capital Fund financial
manager supplies the amount of the quarterly adjustment at the
beginning of each fiscal year.
Use Form AD-742, Transfer and Adjustment Voucher, to make the
adjustment, using exhibits 1 and 2 as examples. Process the
adjustments in time for inclusion in the quarterly financial
statements.
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72.1—2
WORKING CAPITAL FUND ACCOUNTING OPERATIONS HANDBOOK
Exhibit 1
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72.1—3
WORKING CAPITAL FUND ACCOUNTING OPERATIONS HANDBOOK
Exhibit 2
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72.2—1
WORKINGCAPITAL FUND ACCOUNTING OPERATIONS HANDBOOK
72.2 - Refund of State Fuel Tax. Some State laws provide for
refunding the State tax on motor fuels for vehicles using
certain roads. For example, the State of Oregon allows a refund
for Government agencies on the State fuel tax for motor vehicles
using any road, thoroughfare, or property other than a State
highway, county road, or city street.
Units shall report nontaxable units of use on Form FS-500-60,
Fleet Equipment and Aircraft Operation Record. The National
Finance Center summarizes the nontaxable units of use and
reports to the units on EMIS-17, Fleet Equipment, Nontaxable
Mileage Report. Use this report as a basis for preparing the
claim for the refund.
Record refunds of State fuel tax as a "refund" to account 601 or
account 602, as appropriate. On the bill for collection, use
the budget object class used when purchasing the fuel.
Exhibit 1 is a sample of the nontaxable mileage report (EMIS-7).
Exhibit 2 is a sample of the bill for collection for use in
recording the refund.
Regions should supplement this section to show which States
within the Region provide for refunds of State fuel tax.
*- FSH 3/86 AMEND 5 -*
72.2--2
Exhibit 1
WORKINGCAPITAL FUND ACCOUNTING OPERATIONS HANDBOOK
*- FSH 3/86 AMEND 5 -*
72.2--3
WORKING CAPITAL FUND ACCOUNTING OPERATIONS HANDBOOK
Exhibit -2
*- FSH 3/86 AMEND 5 -*
72.3--1
WORKING CAPITAL FUND ACCOUNTING OPERATIONS HANDBOOK
72.3 - Clearing Working Capital Fund Subsystem Trial Balance
Rejects. The National Finance Center (NFC) produces the Working
Capital Fund subsystem (WCFS) trial balance reject report
quarterly to notify units of accounting records in the Budget
Cost System that failed to pass compatibility edits
(Region/unit/activity/account). The WCFS does not include
accounting records on the reject list when processing the
following reports:
1.
Balance sheet.
2.
Income statements.
3.
Nursery cost distribution worksheet.
4.
Yearend balance forward.
Accounts maintenance is necessary to minimize the reject list.
Consider rejected items of significant amounts when reviewing
the balance sheet, income statement, and nursery cost
distribution worksheet.
The reject list consists of individual records and is not a
summary of line items of accounting. This arrangement may
result in the showing of both positive and negative amounts,
with the net effect being zero. Make accounting adjustments
only if there is a balance in the account because the individual
records are reported for the remainder of the year.
Make accounting adjustments to clear the reject list before the
quarter is over and before preparation of the next report.
Exhibit 1 is an example of the Working Capital Fund subsidiary
trial balance reject list.
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72.3--2
Exhibit 1
WORKING CAPITAL FUND ACCOUNTING OPERATIONS HANDBOOK
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72.51--l
WORKING CAPITAL FUND ACCOUNTING OPERATIONS HANDBOOK
72.4 - Distribution of Accounts 604 and 606. Do not automatically distribute account 604 (operation cost, special
gasoline equipment) and account 606 (operation cost, special
diesel equipment) to individual items of equipment and/or
classes as one would their counterparts (accounts 601 and 602,
respectively). It is necessary to manually distribute the
balance in these accounts to the specific class or classes of
equipment and to record the distribution on the quarterly
operations reports (EMIS 20, 21, and 22).
Distribute the balance in the accounts on the basis of units of
use, number of items of equipment, or other equitable bases.
Manually enter the distributed cost on the various Equipment
Management Information System (EMIS) reports.
Regions using accounts 604 and 606 should supplement this
section to assign responsibility for, and describe the method
used to manually distribute accounts 604 and 606.
72.5 - Inventory Adjustments
72.51 - Gasoline and Diesel Inventories. Make an adjustment to
the inventory accounts for gasoline (account 123) and diesel
(account 122) to agree with the physical inventory of gasoline
and diesel.
Make increases or decreases in accounts 601 (gasoline) or 602
(diesel) in the budget object used to purchase the fuel; that
is, 2614-gasoline; 2615-diesel. Make the increase or decrease
in account 122 or 123 in budget object 0230.
This procedure properly adjusts the computation basis for the
Department of Agriculture energy report that the National
Finance Center produces.
Exhibit 1 shows a sample Form AD-742, Transfer and Adjustment
Voucher, for making an adjustment to a gasoline inventory as
well as a supporting worksheet for use in computing the
adjustment.
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72.51—2
WORKING CAPITAL FUND ACCOUNTING OPERATIONS HANDBOOK
Exhibit 1
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72.51--3
WORKING CAPITAL FUND ACCOUNTING OPERATIONS HANDBOOK
Exhibit 1 -- Continued
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72.52
WORKING CAPITAL FUND ACCOUNTING OPERATIONS HANDBOOK
72.52 - Nursery Cost of Trees and Seed Sold. See chapter 60 for
adjustment recording cost of trees and seed sold.
75 - YEAREND CLOSING ADJUSTMENTS
75.1 - Normal Closing Entries. The Working Capital Fund Subsystem
(WCFS) automatically makes closing entries after it prepares the
September 30 balance sheet and income statements. After processing
these, the system generates the following reports.
1. The WCFS processes the Post Closing Trial Balance
reflecting the following:
a. The WCFS closes income and expense accounts into
their appropriate Retained Earnings accounts.
b. The WCFS closes account 154 (Fleet) into account
155.
c. The WCFS makes the adjusting entry for Retained
Earnings Utilized for Increased Cost of Fleet Equipment
Replacement.
d. In activity 036, the WCFS closes direct expanses
(accounts 620, 625, 628, 635, 641, and 652) into account
130. It then closes account 130 into account 129.
e. In activity 036, the WCFS makes an entry between
accounts 358 and 359 reflecting the amount utilized for
the increased cost of seed replaced.
f. The WCFS closes account 202 into account 101. (The
system restores cash when it generates the cash offset
to the negative expenditures that appear in BURG 55-3 as
a result of the 950 reversal.)
2. The WCFS processes balance sheets and income statements
labeled "End-of-Year." The WCFS uses these reports to offset the
negative expenditures generated by the 951 reversal in BUDG 55-3.
3. The WCFS produces "Beginning Balance" statements
reflecting the following in chronological order:
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75.1--1
WORKING CAPITAL FUND ACCOUNTING OPERATIONS HANDBOOK
a. The WCFS combines the Post Closing Trial Balance and
the End-of-Year statements.
b. The WCFS transfers all amounts in balance sheet
accounts in activities 011, 021, 032, 033, 034, and 035
to Unit 97 in each Region.
c. The WCFS reverses the Accounts Receivable accrual
entry as of September 30.
Exhibit 1 shows a flow chart for the balance forward procedures
for activities 011, 021, 032, 033, 034, and 035.
Exhibit 2 shows a flow chart for the balance forward procedures
for activities 012 and 022.
Exhibit 3 shows a flow chart for the balance forward procedures
for activity 040 (includes 041-047).
*- FSH 3/86 AMEND 5 -*
75.1--2
Exhibit 1
WORKING CAPITAL FUND ACCOUNTING OPERATIONS HANDBOOK
*- FSH 3/86 AMEND 5 -*
75.1--3
Exhibit 2
WORKING CAPITAL FUND ACCOUNTING OPERATIONS HANDBOOK
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75.1--4
Exhibit 3
WORKING CAPITAL FUND ACCOUNTING OPERATIONS HANDBOOK
*- FSH 3/86 AMEND 5 -*