The following entries illustrate transactions affecting assets. These entries are for illustrative purposes only and should not be considered all inclusive. Entries posted to GL Code Series 71XX "In-Process" in treasury and treasury trust accounts also require an entry, generally from the Office of the State Treasurer (OST) as illustrated below, to clear the In-Process GL Codes.

The entry would be reversed for In-Process debit amounts.

To record the deposit of cash revenue received. Refer toSubsections 85.50.10 and 85.50.20.

To record the establishment of or an increase in a treasury or treasury trust petty cash account. Refer to Subsections 85.50.60.a or 85.50.70.a, respectively.

To record the abolishment of, or a reduction in, a treasury or treasury trust petty cash account.  Refer to Subsection 85.50.60.f or 85.50.70.d, respectively.

To record the establishment of, or an increase in, a local petty cash account. Refer to Subsection 85.50.70.a.

To record the abolishment of, or a reduction in, a local petty cash account. Refer to Subsection 85.50.70.d.

To record the acquisition of non-current equity investments at trade date. Refer to Subsection 85.52.30.a.

To record the settlement of the trade for acquisition of non-current equity investments. Refer to Subsection 85.52.30.a.

To record the acquisition of non-current fixed income investments at trade date including purchased accrued interest. Refer to Subsection 85.52.30.a.

To record the settlement of the trade for acquisition of non-current fixed income investments. Refer to Subsection 85.52.30.a

To record interest or dividend income on non-current investments received in cash including purchased accrued interest. Refer to Subsection 85.52.10.

To record interest or dividend income on non-current investments which was reinvested.

To record the payment of investment related costs (e.g., advisor fees, consulting fees, manager fees) not associated with an investment sale transaction.

To record the adjustment to reflect an increase to the fair value of non-current investments. To record a decrease in fair value, the revenue entry is reversed.  Refer to Subsection 85.52.30.b.

To record the sale at trade date of non-current investments and the resulting gain on investments.  For a loss, the entry would be reversed. Refer to Subsection 85.52.30.c.

To record the settlement of the trade for the sale of non-current investments. For a loss, the entry would be reversed. Refer to Subsection 85.52.30.c.

To reverse the non-cash revenue recognized in posting adjustments to increase fair value. Entry would be reversed if fair value adjustments recorded a loss. Refer to Subsection 85.52.30.c.

To reverse the nonspendable portion of fund balance in governmental funds for non-current investments not offset by unearned revenue or a liability.

In accordance with Statement No. 34 of the Governmental Accounting Standards Board, the state’s deferred compensation plan is accounted for and reported as a pension trust fund. Acquisitions and sales of deferred compensation plan investments are to follow the entries in Subsections 85.65.18 and 85.65.24, respectively, except that no entry is to be made to GL 9123 "Nonspendable Investments."

To record long-term taxes receivable which are measurable but not due within twelve months. Refer to Subsection 85.54.15.c.

		Dr.	Cr.
Taxes Receivable (1611)		xxx
	Allowance for Uncollectible Taxes Receivable (1641)		xxx
	Unavailable Revenues (5292)		xxx

To record a receivable at time of billing. Refer to Subsection 85.54.45.a.

To value receivables and adjust the allowance for uncollectible accounts to reflect the amount estimated to be uncollectible at the end of the period in a governmental fund type account. Refer to Subsection 85.54.55.b.

		Dr.	Cr.
Accrued Revenues (3205) (with revenue source code originally credited)		xxx
	Allowance for Uncollectible Accounts Receivable (1342)		xxx

To value receivables and adjust the allowance for uncollectible accounts to reflect the amount estimated to be uncollectible at the end of the period in a proprietary or trust fund type account. Refer to Subsection 85.54.55.b. Example assumes a reduction in collectability. If collectability appears improved, the entry would be reversed.

		Dr.	Cr.
Bad Debt Expense 6515 (Sub-Object WC)		xxx
	Allowance for Uncollectible Accounts Receivable (1342)		xxx

To write off receivables determined to be uncollectible by the state. Refer to Subsection 85.54.55.c.

		Dr.	Cr.
Allowance for Uncollectible Accounts Receivable (1342)		xxx
	Accounts Receivable (1312)		xxx

To record the issuance of a travel advance. In this example, the amount advanced is $500.  Refer to Subsection 85.54.44.

To record travel expenditures when the travel advance issued is equal to the amount of travel costs.

To record travel expenditures when the travel advance issued is less than the amount of travel costs. In this example, travel costs are $700.

To record travel expenditures when the travel advance issued is greater than the amount of the travel costs. In this example, travel costs are $400. The traveler must reimburse the agency for the excess advanced.

To record amounts receivable for the reimbursement of federal expenditures. Refer to Subsection 85.54.20.

		Dr.	Cr.
Due from Federal Government (1351)		xxx
	Accrued Revenues (3205) Revenue Source Code (03XX)		xxx

To record the receipt of monies due from the federal government. Refer to Subsection 85.54.20.

		Dr.	Cr.
Cash in Bank (1110) or Receipts In-Process (7110)		xxx
	Cash Revenues (3210) Revenue Source Code (03XX)		xxx
Accrued Revenues (3205) Revenue Source Code (03XX)		xxx
	Due from Federal Government (1351)		xxx

To record federal receivables which are in dispute at the end of the accounting period in a governmental fund type account. Refer to Subsection 85.54.20.

		Dr.	Cr.
Accrued Revenues (3205) Revenue Source (03XX)		xxx
	Unearned Revenues (5190)		xxx

The following entries illustrate disbursement and repayment for both budgeted and non-budgeted long-term loans. Since the loan in this illustration is made to a private entity, long-term GL Code 1614 "Loans Receivable" is used. However, this example may be applied to other types of long-term loans using other receivable general ledger codes, such as GL Code 1652 "Due from Other Governments." Refer to Subsection 85.54.40.

To record disbursement of a budgeted long-term loan from a governmental fund type account. Budgeted loans present a unique situation where loan disbursements and repayments are expenditures and revenues for budgetary purposes, but not for GAAP financial accounting purposes.

Note: In AFRS, Sub-object NR is reported as Fund Balance on the GAAP operating statement. On the Budget to Actual statement, however, it is reported as an expenditure.

		Dr.	Cr.
Loans Receivable (1614)		xxx
	In-Process (71XX)		xxx
Cash Expenditures/Expenses (6510) (Subobject NR)		xxx
	Nonspendable Receivables - Long-Term (9131)		xxx

To record repayment of the budgeted long-term loan from (a) above, an interim process occurs reclassifying the expected payment from long-term to short-term. The amount recognized and recorded at fiscal year-end is based on the subsequent year's scheduled payments.

Note: In AFRS, Revenue Source Code 0866 "Loan Principal Repayment" is reported as Fund Balance on the GAAP operating statement. On the Budget to Actual statement, however, it is reported as revenue.

		Dr.	Cr.
Loans Receivable (1314) or Due from Other Governments (1352)		xxx
	Loans Receivable (1614) or Due from Other Governments (1652)		xxx
Nonspendable Receivables - Long-Term (9131)		xxx
	Accrued Revenue (3205) Revenue Source Code (0866) Loan Principal Repayment		xxx

Then repayment is recorded as received.

For loans whose payments are uncertain, the receivable is reclassified from long-term to short-term upon receipt of the loan payment.

Then the payment receipt is recorded.

To record disbursements of a long-term loan which are not budgeted.

Note: The entry to adjust the nonspendable portion of fund balance for receivables is made in governmental trust fund type accounts only. This entry is not applicable in proprietary and trust fund type accounts.

		Dr.	Cr.
Loans Receivable (1614)		xxx
	In-Process (71XX) or Cash in Bank (1110)		xxx
Appropriate fund equity GL code (9XXX)		xxx
	Nonspendable Receivables - Long-Term (9131)		xxx

To record repayment of the non-budgeted long-term loan from (b) above, after an interim process occurs reclassifying receivables from long-term to short-term.

Then the loan payment is recorded.

The following example is used to illustrate the entries for leases to an external entity (not a state agency) that exceeds the state’s capitalization threshold. Refer to Subsection 85.72.30.

An agency entered into an agreement to lease a building for 10 years at the rate of $10,000 per month. The current interest rate is 4 percent and the present value of the minimum lease payments is $990,994 (annuity due). The value of the asset meets the state's capitalization threshold (refer to Subsection 30.20.30 for further information on capitalization criteria for leases). Therefore, the entries to be recorded for a lease are as follows:

Note: Contact the Office of the State Treasurer for the current rate of interest, for computing present value. Leases are computed as annuities due because the payments are made at the first of the month; other capital purchases may be computed as ordinary annuities.

To record the lease receivable and the deferred inflows of resources at lease commencement. The portion of the receivable due within the next fiscal year should be recorded in GL 1321 and the remaining receivable balance should be recorded in GL 1621.

To record the receipt of the first periodic lease payment and reduction of the lease receivable.

To record the receipt of the second periodic lease payment, interest income, and reduction of the lease receivable.

To reduce the deferred inflow on leases and recognize a portion of the revenue. Deferred inflows of resources should be amortized over the lease term using the straight-line method. The revenue must be recognized by fiscal year end. In this example, the amortization is performed monthly.

To reclassify as short term that portion of the receivable due within the next fiscal year. At fiscal year-end, the amount in GL Code 1321 should be the same as the next year’s principal payment on the agency’s lease agreement amortization schedule.

To record the allowance for estimated uncollectible lease receivable. If collectability appears improved, the entry would be reversed.

To record the receipt of a variable lease payment.

To record the acquisition of consumable inventories. Refer to Subsection 85.56.20.a(1).

		Dr.	Cr.
Cash Expenditures/Expenses (6510) Object E		xxx
	Cash in Bank (1110) or In-Process (71XX)		xxx

To record the use of consumable inventories during the year.

No entry is required.

At year-end, to record an increase in consumable inventories during the year. Refer to Subsection 85.56.20.a(3) and (4). These entries would be reversed to record a decrease in consumable inventories during the year.

Note: The second entry is to adjust the nonspendable portion of fund balance in governmental fund type accounts only.

To record the acquisition of consumable inventories. Refer to Subsection 85.56.20.b.(1).

		Dr.	Cr.
Consumable Inventories (1410)		xxx
	Cash in Bank (1110) or In-Process (71XX)		xxx

To record the use of consumable inventories during the year. Refer to Subsection 85.56.20.b.(2).

To record the acquisition of merchandise inventories as an expense. Refer to Subsection 85.56.30.a.(1).

		Dr.	Cr.
Cost of Goods Sold (6516) Object F		xxx
	Cash in Bank (1110) or In-Process (71XX) or Payables (51XX)		xxx

To record the sale of merchandise inventories when the merchandise inventory purchase is recorded as an expense. Refer to Subsection 85.56.30.a.(2).

To record the adjustment for merchandise inventory when the physical count shows the inventory value greater than the amount in the general ledger control account GL Code 1420 "Merchandise Inventories." This entry is reversed when the physical count shows the inventory value less than the recorded amount. Refer to Subsections 85.56.30.a.(3) and b.(3).

To record the acquisition of merchandise inventories as an asset. Refer to Subsection 85.56.30.b.(1).

		Dr.	Cr.
Merchandise Inventories (1420)		xxx
	Cash in Bank (1110) or In-Process (71XX) or Payables (51XX)		xxx

To record the sale of merchandise inventories when the merchandise inventory purchase is recorded as an asset. Refer to Subsection 85.56.30.b.(2).

The second entry is to adjust the merchandise inventory account and record the cost of goods sold:

		Dr.	Cr.
Cash in Bank (1110) or In-Process (71XX) or Receivables (13XX)		xxx
	Cash Revenue (3210) or Accrued Revenues (3205) Revenue Source Code (0450) Sales of Goods and Supplies – Proprietary Funds		xxx
Cost of Goods Sold (6516) Object F		xxx
	Merchandise Inventories (1420)		xxx

A common example of donated consumable inventory is federal surplus food commodities provided to the state for use in a variety of programs. This example assumes that commodities with a fair value of $5,000 are donated to the state for use in a governmental fund type account. The state pays $500 shipping costs for delivery of the commodities.

To record the acquisition of federally donated consumable inventories. Refer to Subsection 85.56.40.b.

		Dr.	Cr.
Consumable Inventories (1410)		500
Donated Inventories (1415)		5,000
	Cash in Bank (1110) or In-Process (71XX)		500
	Unearned Revenues (5190)		5,000

To record the use of donated consumable inventories with a fair value of $4,000. Use of donated consumable inventories is treated as a nonbudgeted activity. The cash outlay for shipping costs is a budgeted expenditure. Refer to Subsection 85.56.40.b.

To record year-end adjustment. Refer to Subsection 85.56.40.b.

Note: The second entry (for the shipping costs) is required in governmental and fund type accounts only.

		Dr.	Cr.
Unearned Revenues (5190)		4,000
	Donated Inventories (1415)		4.000
Appropriate fund equity GL code (9XXX)		1,000
	Nonspendable Consumable Inventories (9120)		1,000

To record the prepayment of goods and services, other than inventory, in proprietary and trust fund type accounts. Refer to Subsection 85.58.10.c.

		Dr.	Cr.
Prepaid Expenses (1510)		xxx
	Cash in Bank (1110) or In-Process (71XX)		xxx

To record the portion of prepaid goods and services used during the period. Refer to Subsection 85.58.10.c.

The entry for the purchase of a capital asset records the expenditure in the account acquiring the asset with a corresponding entry in Account 997 "General Capital Assets Subsidiary Account." Refer to Subsection 85.60.30.a.

Operating Account:

		Dr.	Cr.
Cash Expenditures/Expenses (6510) Object J		xxx
	Cash in Bank (1110) or In-Process (71XX)		xxx

General Capital Assets Subsidiary Account (Account 997):

The following entry records the donation of a capital asset to a governmental fund type account.  Because governmental fund type accounts focus on current financial resources, no entry is made in the operating account.  However, an entry is made in Account 997 “General Capital Assets Subsidiary Account” to record the estimated acquisition value of the asset.  Refer to Subsection 85.60.30.a.

General Capital Assets Subsidiary Account (Account 997):

		Dr.	Cr.
Capital Asset (2XXX)		xxx
	Investment in General Capital Assets (9850)		xxx

The entry to record the purchase of a capital asset is made in the appropriate capital asset GL code in the account acquiring the asset. Refer to Subsection 85.60.30.b.

Operating Account:

		Dr.	Cr.
Capital Asset (2XXX)		xxx
	Cash in Bank (1110) or In-Process (71XX)		xxx

For budgeted proprietary and trust fund type accounts an additional entry is required to record the appropriated disbursement and an offsetting entry to eliminate the appropriated disbursement for financial reporting purposes.

The following entry records the donation of a capital asset to a proprietary or trust fund type account.

The entry for the acquisition of an asset that does not meet the state's capitalization policy records the expenditure/expense in the account acquiring the asset. Refer to Subsection 85.60.30.d.

		Dr.	Cr.
Cash Expenditures/Expenses (6510) Subobject JA or JB		xxx
	Cash in Bank (1110) or In-Process (71XX)		xxx

The following entry records the depreciation on general capital assets in Account 997 "General Capital Assets Subsidiary Account." Refer to Subsection 85.60.40.a.

General Capital Assets Subsidiary Account (Account 997):

The following entry records the depreciation of capital assets in proprietary and trust fund type accounts. Refer to Subsection 85.60.40.b.

The net proceeds received from the sale of general capital assets are generally recorded in the account that originally acquired the asset. Refer to Subsection 85.60.50.a. If the estimated net proceeds from disposition were included in the budget for the acquisition of the replacement capital asset and the expenditure for the acquisition of new capital assets has already been recorded at gross, the following entry is made:

If the net proceeds from disposition were not included in the budget for a replacement capital asset, the following entry is to be made instead:

In addition, an entry in Account 997 "General Capital Assets Subsidiary Account" is made to record the removal of the capital asset. In the following entry, the capital asset was not fully depreciated (i.e. the cost is greater than the accumulated depreciation). If the capital asset was fully depreciated (i.e. the cost and the accumulated depreciation are an equal amount), then in GL Code 6597 "Capital Asset Adjustment (General Capital Assets Subsidiary Only)" would net to zero.

General Capital Assets Subsidiary Account (Account 997):

		Dr.	Cr.
Capital Asset Adjustment (General Capital Assets Subsidiary Account Only) (6597) Subobject WF		xxx
Allowance for Depreciation Capital Assets (2XXX)		xxx
	Capital Assets (2XXX)		xxx

The disposal of capital assets of proprietary and trust fund type accounts are accounted for in the account that recorded the asset. Refer to Subsection 85.60.50.b.

		Dr.	Cr.
Cash in Bank (1110) or In-Process (71XX) Allowance for Depreciation - Capital Assets (2XXX)		xxx xxx
	Capital Assets (2XXX) Gain and Loss on Sale of Capital Assets (3213) Revenue Source Code (0418) Gain or Loss on Sale of Capital Assets		xxx xxx

The following additional entry is needed to record the net proceeds received upon disposition of a capital asset in budgeted proprietary and trust fund type accounts.

If the net proceeds from disposition were included in the budget for the acquisition of the replacement capital asset and the purchase for the new capital assets has already been recorded at gross, the following entry is made:

If the net proceeds from disposition were included in the budget as estimated revenues, the following entry is made:

These illustrative entries assume the following: a vehicle is purchased for $12,000 cash. (It has a fair value of $14,000 less a trade-in allowance of $2,000.) The trade-in vehicle originally cost $9,000 and has a current book value of $1,500.

These entries reflect the trade-in transaction in the operating account acquiring the vehicle and the corresponding entries in Account 997 "General Capital Assets Subsidiary Account." Refer to Subsection 85.60.50.a.

Operating Account:

		Dr.	Cr.
Cash Expenditures/Expenses (6510) (Subobject J)		12,000
	Cash in Bank (1110) or In-Process (71XX)		12,000

General Capital Assets Subsidiary Account (Account 997):

The first entry removes the vehicle traded in. The second entry records the new vehicle.

		Dr.	Cr.
Investment in General Capital Assets (9850) Accumulated Depreciation – Furnishings, and Equipment (2420)		1,500 7,500
	Furnishings and Equipment (2410)		9,000
Furnishings and Equipment (2410)		13,500
	Investment in General Capital Assets (9850)		13,500

This entry reflects a trade-in transaction in non-budgeted proprietary and trust fund type accounts. Refer to Subsection 85.60.50.c.

The entry for the acquisition of capital assets acquired through lease-to-own agreements records the expenditure in the account acquiring the leased assets with a corresponding entry in Account 997 “General Capital Assets Subsidiary Account.” Refer to Subsection 85.60.70.a.

Operating Account:

		Dr.	Cr.
Capital Asset Acquisitions by Lease Agreements or Certificates of Participation (6514) Object J (Capital Outlays)		xxx
	Other Financing Sources (3221) Revenue Source Code (0809) Lease-to-Own Acquisition		xxx

General Capital Assets Subsidiary Account (Account 997):

The entry to record lease payments for acquisitions that do not meet the lease-to-own agreement requirements in Subsection 30.20.30, is shown below. For such acquisition, no entry is made in Account 997 "General Capital Assets Subsidiary Account" until title transfers to the state and the fair value of the asset meets the state's capitalization policy.

		Dr.	Cr.
Cash Expenditures/Expenses (6510) (Subobject EH or other subobject as appropriate)		xxx
	Cash in Bank (1110) or In-Process (71XX)		xxx

To record subsequent acquisition of non-capitalized leased assets in Account 997 "General Capital Assets Subsidiary Account" upon transfer of the title. The asset is recorded at the fair value at the time title transfers.

General Capital Assets Subsidiary Account (Account 997):

Record capital assets acquired through lease-to-own agreements by proprietary and trust fund type accounts in the account acquiring the leased assets. Refer to Subsection 85.60.70.b.

		Dr.	Cr.
Furnishings and Equipment (2410)		xxx
	Lease-to-Own Agreements Payable (5172) Lease-to-Own Agreements Payable (5272)		xxx xxx

The entry to record lease payments for acquisitions that do not meet the lease-to-own agreement requirements in Subsection 30.20.30, is as follows:

To record the fair value of the subsequent acquisition of non-capitalized leased assets upon transfer of title.

Costs incurred for the construction of capital assets are to be recorded in the account incurring the expenditure. Refer to Subsection 85.60.90.b.

Operating Account:

		Dr.	Cr.
Cash Expenditures/Expenses (6510) Object J or other subobject as appropriate		xxx
	Cash in Bank (1110) or In-Process (71XX) or Construction Contracts Payable (5117)		xxx

Construction projects not completed at the end of the accounting period require an entry in Account 997 "General Capital Assets Subsidiary Account."

General Capital Assets Subsidiary Account (Account 997):

Upon completion of the project, the construction in progress is reclassified to the appropriate capital asset GL code(s) in Account 997 "General Capital Assets Subsidiary Account."

General Capital Assets Subsidiary Account (Account 997):

In proprietary and trust fund type accounts, costs incurred for the construction of capital assets are to be recorded in the account incurring the expense. Refer to Subsection 85.60.90.c.

For budgeted proprietary and trust fund type accounts an additional entry is required to record the appropriated disbursement and an offsetting entry to eliminate the appropriated disbursement for financial reporting purposes.

Upon completion of the construction project, the construction in progress is reclassified to the appropriate capital asset GL code(s) for the total costs capitalized to date.

The following entries illustrate how to record the transfer of a capital asset based on the fund type of the accounts involved in the transfer.  Refer to Subsection 85.60.97.b and c.

Transfer capital asset from Governmental Fund Type Account to a Proprietary or Trust Fund Type Account

The following entry records the transfer of a capital asset from a governmental fund type account. Because governmental fund type accounts focus on current financial resources, no entry is made in the operating account.  However, an entry in Account 997 “General Capital Assets Subsidiary Account” is made to record the removal of the capital asset. In this example, the capital asset was not fully depreciated (i.e. the cost is greater than the accumulated depreciation). If the capital asset was fully depreciated (i.e. the cost and the accumulated depreciation are an equal amount), the entries to GL Code 6597 "Capital Asset Adjustment (General Capital Assets Subsidiary Only)" would net to zero, and there would be no capital contribution recorded in the proprietary fund type account.

General Capital Assets Subsidiary Account (Account 997):

Proprietary or Trust Fund Type Account:

Note:  If a cash payment is made in conjunction with the transfer of the capital asset, it is receipted into the governmental operating account that initially purchased the capital asset using GL Code 3210 “Cash Revenues” with Revenue Source Code 0416 “ Sale of Property – Other.”

Transfer capital asset from Proprietary or Trust Fund Type Account to a Governmental Fund Type Account

The following entry records the transfer of a capital asset to a governmental fund type account. Because governmental fund type accounts focus on current financial resources, no entry is made in the operating account.  However, an entry in Account 997 “General Capital Assets Subsidiary Account” is made to record the addition of the capital asset. In this example, the capital asset was not fully depreciated (i.e. the cost is greater than the accumulated depreciation). If the capital asset was fully depreciated (i.e. the cost and the accumulated depreciation are an equal amount), the entries made to GL Code 9850 "Investment in General Capital Assets" would net to zero, and there would be no gain or loss on the sale of the capital asset recorded in the proprietary or trust fund type account.

General Capital Assets Subsidiary Account (Account 997):

Proprietary or Trust Fund Type Account:

Note:  If a cash payment is made in conjunction with the transfer of the capital asset, it is paid by the governmental operating account associated with the activity that will be using the capital asset using GL Code 6510 “Cash Expenditures” with the appropriate J subobject, and by the proprietary or trust fund type account using GL Code 3213 “Gains and Losses on Sales of Capital Assets” with Revenue Source Code 0418 “Gain or Loss On Sale of Capital Assets.”