GENERAL ACCOUNTING IN CHINA'S GOVERNMENT BUDGET ACCOUNTING SYSTEM, PART 1

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00809A000700230218-3
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 29
• Document Creation Date: December 22, 2016
• Document Release Date: July 12, 2011
• Sequence Number: 218
• Publication Date: August 15, 1955
• Content Type: REPORT

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EPORT
CD NO.
DATE OF
DATE DIST. /S Aug 1955
NO. OF PAGES 2,;
SUPPLEMENT TO
REPORT NO.Translation 345
Chen -fu Yu-:;uan Hui-cLa Chiao-ch'eng (Te::cbcck of Government Budget
Accounting), publishe T shu Yung
Vnl TT rti,n.to.. vrrr -P'in-she,
GENERAL ACCOUNTING IN CHINA'S GOVERNMENT BUDGET ACCOUNTING SYSTEM PART 1
[Comment: This report presents in full Chapter XIII of Cheng-
fu Yu-suan Hui-chi Chiao-ch'en (Textbook of Government Budget Ac-
counting), by Wang P'ang-hsin and Liu Wen-ch'uan, a textbook de-
signed for use in technical colleges and intermediate vocational
accounting schools. Major subjects discussed in this chapter in-
clude the definition of general accounting, the classification of
general accounts, the method of posting entries in the various
general accounts, and specific examples of general accounting trans-
actions. It should be noted that the numbering of the original text
has been retained in this report.]
13-1. Definition of General Accounting
According to the "Provisional General Budget Accounting System for All
Levels of People's Governments" (hereafter referred to as "General Accounting
System" or "this system"), the term "general accounting" or "general budget
accounting" refers to all accounting activity connected with the execution of
general budgets by people's governments on all levels and at the same time en-
compasses those financial agencies assigned the responsibility of performing
this accounting activity.
The relationship between general accounting and general budgets is the
same as that between unit accounting and unit budgets and requires no further
explanation at this point. The distinction between general accounting and unit
accounting, as pointed out in Chapter VII, is as follows: Unit accounting re-
fers to accounting activity involved in the execution of unit or subordinate
unit budgets by organs under the Jurisdiction of the various levels of people's
CLASSIFICATION C-C-N-F I-D?E-N.T-I A L
NOT RELLAF ABLE TO FOREIGN NATIONtTf
CENTRAL INTELLIGENCE AGENCY
INFORMATION FROM
FOREIGN DOCUMENTS OR RADIO BROADCASTS
COUNTRY China
SUBJECT Economic -- Finance, government budget
HOW
PUBLISHED Monograph
WHERE
PUBLISHED Shanghai
DATE
PUBLISHED Sep 1953
LANGUAGE C'4nese
STATE
ARMY
CLASSIFICATION -W-FFI DIENNNTTI?A-L
NSAB
FBI
DISTRIBUTION
50X1-HUM
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governments; and general accounting refers to accounting activity involved in
the execution of general budgets by the various governments themselves. The
relationship between unit and subordinate unit budgets on the one hand and
general budgets on the other is described in Section 2-3 above. The relation-
ship between unit accounts and general accounts is exactly the same, with unit
accounts serving as the components of the general accounts or any given level
of government. After the student has read this and subsequent chapters, he
should compare them with the preceding chapters on unit accounting to under-
stand thoroughly the subject matter of general and unit accounting.
13-2. Categories of General Accounts
According to the present system, general accounts are classified according
to the administrative structure of government as follows:
(1) General accounts of the Central People's Government -- established
by the Ministry of Finance.
(2) General accounts of administrative area governments (or military
and political conmiittees) and of autonomous region governments -- established
by appropriate finance bureaus.
(3) General accounts of provincial (or municipal) governments -- es-
tablished by appropriate finance offices.
(4) General accounts of hsien (or municipal) governments -- estab-
lished by appropriate finance departments.
In areas where the "four-level financial system" (see Section 2-3 above)
has not yet been implemented, hsien (or municipal) governments do not set up
general accounts. With the exception of accounts for national taxes and local
surtaxes, accounting transactions for these hsien (or municipal) governments
are handled in accordance with the provisional unit budget accounting system.
Financial departments of people's governments under the jurisdiction of auton-
omous region governments establish general accounts corresponding to those of
provincial (or hsien) governments. Financial departments in special adminis-
trative office districts may be authorized by provincial finance offices to
create general accounts and carry out examination work in their behalf.
In procedural or substantive matters arising in connection with the above
system of general accounts, lower levels of government are subject to the guid-
ance and supervision of their superiors in the administrative hierarchy.
13-3. Elements of General Accounting
According to the present system, people's governments carry on the fol-
lowing types of accounting activity in executing general budgets:
(1) Accounting transactions involving general budgetary receipts and
expenditures.
(2) Accounting transactions involving various kinds of treasury deposits
and fund allocations.
(3) Accounting transactions involving the increase, decrease, or liquida-
tion of assets and liabilities.
(4) Supervising budget execution.
(5) Drafting budget execution reports and final budgets.
(6) Guiding and supervising the following types of accounting activity:
tax accounting; treasury, granary, and warehouse accounting; unit budget ac-
counting; and general budget accounting on subordinate levels of government.
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The accounting forms employed in general accounting, as with those used
in unit accounting, may be grouped under the three main headings of accounting
documents, accounting books, and accounting statements. The types of account-
ing forms and their interrelationships may be demcnstrated in chart form as
follows:
Since the accounting unit and methods of pc;;ting are the same for both
general and unit accounting, the student is referred to the discussion of
these matters in Sections 7-4 through 7-7 above.
13-4. Accounting Forms
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Other types of registers
Register of goods on hand
Register of treasury reports
Summary record of revenue
and expenditures
Register of fulfillment of
revenue quotas
Register of agriculture tax v
collections
x
w
m
rl
0
I [Adjoins pace ;; here]
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[Adjoins page 7 here]
Detailed statecent of accu.ulated
depreciation funds by type and
payer
Detailed statement of enterprise
investment by type and Cayes
Detailed statement for -sods
on hand
Statement of budget execution
for Monthly revenue and
expem ltures
Detailed statement of quarterly
revenue and expenditures
Detailed statement of final
budget for annual revenue and
expenditures
Detailed statement of final budget I I
for annual revenue and expendituresH
on a quarterly and monthly basis '' II
Fbyty-c led suzasary statement of
ulated depreciation funds
and payer
Detailed sunerary statement of
enterprise in,estaont by type
and payee
I Detailed summary statement for
Foods on hand
Sw-mary statement of budget
execution for 7:onthly revenue
and expenditures
Detailed summary statement
o quarterly revenue and
c;c,endituren
Detailed statement -,final
General budget for annual
revenue and expenditures
Detailed statement of final
General budget for annual
nti
i).y revenue and expenditures
es
a quarterly and Government-
level basis
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Daily statement of
cash in treasury
Statement of asse s an
liabilities
Summary statement of final
general budget for annual
revenue and expenditures on
an area basis
ieager accounts during final
accounting process
Summary statement of various
kinds of treasury deposits
by levels of government
Statement of final general
budget for annual revenue
ana rapenditures
Summary statement of final
general budget for annual
revenue and expenditures on
a government level basis
Sue ary statement of quarterly
revenue and ealenditures on
Jan area basis
Su=-nary statement Of quarterly
revenue and expenditures
'terly
(Adjoins pace 6 here)
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13-5. The Classification of Accounts
According to the present system, general accounts are classified as reve-
nue, expenditure, allocation, asset, and liability accounts. Revenue and ex-
penditure accounts are established with the same account titles as those em-
ployed for the various "categories" of revenue and expenditure listed in gen-
eral budgets. Allocation accounts are of two types: "allocation of basic
construction funds" and "allocation of administrative and operating funds."
Asset accounts consist of 11 account titles, such as "cash in treasury,"
grain on hand," "goods on hand," "enterprise investment," and "financial
accumulation." There are 12 liability accounts, including "temporary receipts."
"transportation checks payable," and "this year's surplus." The different types
of general accounts will be explained in detail in the following sections of
this chapter.
As pointed out in Section 5-1 above, people's governments on all levels
must use the account titles listed in the "1952 Uniform Revenue and Expendi-
ture Accounts of the People's Republic of China" when compiling their general
budgets for revenue. According to this classification of accounts, all reve-
nues are placed under the three headings of "category," "class," and "type."
Consequently, when establishing accounts under the general accounting system,
each category" of revenue in the general budget has a corresponding account
title. For example, such categories of revenue in the budget of the central
government as "customs duties," "salt taxes," and "taxes on controlled sales"
appear as account titles in the general ledger of accounts of the central gov-
ernment.
The account which follows illustrates the posting procedure for income
that falls under one of the revenue accounts:
(1) Income from customs duties
(2) Credit balance indicates
net amount of customs
duties
13-7. Expenditure Accounts
Expenditure accounts are set up in the same way as revenue accounts.
For each "category" of expenditure appearing in the general budget, there is
a corresponding account title used in the general accounting system. Thus
such "categories" of expenditure in the budget of the central government as
"national defense expenditures," "military affairs expenditures" and "heavy
industry expenditures" appear as account titles in the general ledger of ac-
counts of the central government.
The account below illustrates the posting procedure for disbursements
that fall under one of the expenditure accounts:
(1) Expenditures for heavy industry (1) Expenditures for heavy indus-
try recovered
Debit balance indicates net amount
of heavy industry expenditures
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Allocation accounts are established for funds paid in advance, such as
funds turned over to special banks for supervision of their expenditures and
funds for which accounts must be received before they are recorded as actual
expenditures. The purpose of setting up allocation accounts is to provide a
continuous check on budget eyecution, specifically, to show the relationship
at any time between funds allocated and funds expended.
Allocation accounts are of the following two types:
(1) Allocation of basis construction funds. All funds turned over to
special banks charged with the supervision of basic construction are entered
in this account. The account appears as follows:
Allocation of Basic Construction Funds
13-8. Allocation Accounts
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(1) Funds distributed to special banks for (1) Basic construction funds
supervision of basic construction ex- reported by special banks
penditures to have been paid out of
supervisory accounts
(2) Debit balance indicates net amount of
allocated basic construction funds
(2) Allocation of administrative and operating funds. Allocation ac-
counts for administrative and operating funds are set up to correspond with
the expenditure "categories" for administrative and operating funds employed
in the general budget, the general account titles differing from the budget
account titles only in the substitution of the word "allocation" for the word
"expenditure." Examples of account titles are "allocation for agriculture,"
"allocation for education," and "allocation for administrative expenses of
administrative organs."
An illustration of this account is as follows:
Allocation for Education
(1) Funds allocated for educational ex- (1) Funds for which accounts
penditures have been received and
approved
(2) Debit balance indicates amount of
funds for which accounts have not
been received or funds paid in ad-
vance
To provide for difficulties which might arise with respect to general
accounting, it is permitted to dispense with allocation accounts when their
use is not required. As pointed out in the discussion of the general ac-
counts of the central government in Section 13-14 below, basic construction
funds are distributed to a special bank which supervises their expenditure,
and administrative and operating funds are first allocated and than an ac-
counting of their expenditure is submitted. Thus, funds of this type must
pass through an allocation account before they are cleared to an expenditure
account. On the other hand, working capital and expenditures for national
defense and military affairs do not pass through allocation accounts. Since
uniformity is difficult to achieve, elasticity is one of the basis principles
underlying this system.
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13-9. Asset Accounts
There are 11 asset accounts employed in the general accounting system, as
follows :
(1) Cash in treasury. All treasury transactions are listed under this
account, with the method of posting as follows:
Debits
(1) Deposits in the treasury
(2) Debit balance indicates net
deposits
(1) Withdrawals from the treasury
(2) Grain on hand. All granary transactions are listed under this ac-
count, with each entry expressed both in grain and a monetary equivalent.
The method of posting is shown below:
(1) Deposits in the granary (1) Withdrawals from the granary
(2) Debit balance indicates net grain
on hand
(3) Goods on hand. All warehouse transactions are listed under this
account, which appears as follows:
(1) Deposits in the warehouse (1) Withdrawals from the warehouse
(2) Debit balance indicates net goods
on hand
(4) Enterprise investment. All funds invented in various enterprises
must be entered in this account and at the same time entered in the appropriate
expenditure account. The account appears as follows:
Credits
(1) Enterprise investment paid out (1) Enterprise investment recovered
or written off and transferred
(2) Debit balance indicates net amount
of government investment in vari-
ous enterprises
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Exchanges of Grain, Cash, and Goods
(5) Exchanges of grain, cash, and goods. All transactions involving
the exchange of grain, cash, and goods are entered in this account. Once
the exchange or conversion is completed, there should be no surplus. The
account appears as follows:
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Debits
Credits
(1) Amounts paid out in exchanges of grain,
cash, arm goods (1) Amounts received in ex-
changes of grain, cash,
and goods
(6) Conversion differential. Any differential which results from con-
verting grain, cash, and goods for purposes of tax collection, exchange, or
supply are entered here. The account appears as follows:
Conversion Differential
- --??o cuuvurslon (1) Gains resulting from
conversion
(2) Debit balance indicates net loss,
when closing at end of year, trans- (2) Credit balance indicates
fer to "other expenditures" account net n, yea ctrais-
at end od of year, trans-
fer to "other income"
account
(7) Current account with higher organs. All current transactions with
higher-level general accounts are entered in this account. Although there
should be no balance when closing at the end of the year, any debit surplus
becomes an asset and any credit surplus a liability. The account appears as
follows:
Current Account With Higher Organs
and amounts written
off and transferred
- - '- coma amount clue (2) Credit balance indi-
higher organs, there should be no
balance at end of year Cates amount due from
higher organs, there
should be no balance
at end of year
(8) Current account with subordinate organs. All current transactions
with subordinate-level general accounts are entered in this account. The
account is drawn up in the same way as that in (7) above.
(9) Other current accounts. Other current transactions not appearing
in the above accounts are entered in this account. It is drawn up in the
same way as that in (7) above.
~- -?? ~, ac?u amounts (1) Receipts, recoveries,
written off and transferred
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(10) Current account with next year's accounts. This account is set
up in a given year's accounts, and all current transactions with next year's
accounts are entered in this account. The account appears as follows:
Current Account With Next Year's Account
Debits
Various kinds of treasury deposits
carried over to next year's ac-
counts (at the same time these are
entered on the credit side of the
appropriate treasury deposit asset
accounts)
(2) Miscellaneous income arising during
period of adjustment at end of year
(at the same time these are entered
on the credit side of the appropriate
revenue account)
Debit balance must be written off
against the balance in "this year's
surplus" account after the final ac-
counts have been completed
(11) Financial accumulation. This is a balancin
a
t f
g
ccoun
or the
"enterprise investment" asset account and the "government bonds payable,"
"foreign debt payable," and "accumulation of depreciation funds" liability
accounts. All entries originally posted on the credit side of these ac-
counts are posted on the debit side of this account, and all entries origi-
nally posted on the debit side of these accounts are posted on the credit
side of this account. The account appears as follows:
(2) Amounts of foreign credits re-
ceived
(3) Amounts of depreciation funds
paid in by enterprises
(k) Amounts of enterprise investments
recovered or written off and trans-
ferred
Amounts of basic construction
declared obsolete
(6) Debit balance indicates amount
by which liabilities exceed assets
Credits
Miscellaneous expenditures
arising during period of
adjustment at end of year
(at the same time these
are entered on the debit
side of the appropriate
expenditure account)
Amounts of enterprise work-
ing capital paid out
(2) Amounts of government bonds
paid off or written off and
transferred
Amounts of foreign debts paid
off or written off and trans-
ferred
(k) Amounts of enterprise depre-
(6) Credit balance indicates amount
by which assets exceed liabili-
ties
ciation funds paid back or
written off and transferred
Amounts of basic construction
funds disbursed by special
banks for which final accounts
have been approved
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13-10. Liability Accounts
The liability
follows: accounts employed in the general accounting system are as
(1) Temporary receipts. All receipts of a
tered is this account. The account appears nature
as follows: are ea-
Temporary Receipts
Debits
(1) Funds repaid or transferred to
another account
Receipts of a provisional
nature
(2) Credit balance indicates
net amount of temporary
receipts awaiting trans-
fer or repayment
(2) Transportation checks payable. All transportation checks payable,
which are issued only after approval, are entered in this account. The ac-
count appears as follows:
Transportation Checks Payable
(1) Amounts recovered in li
e
Credits
u of income (1) Amounts paid out in lieu
of funds
(2) Credit balance indicates
net amount of transporta-
tion checks payable not
yet recovered
(3) Government bonds payable. All receipts from the sale of
went bonds are entered in this account and at the same time
the appropriate revenue account. govern
The account appears as follows;
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(1) Amounts redeemed or written off
and transferred
Amounts of government bonds
issued
(2) Credit balance indicates net
amount of government bonds
not yet redeemed
(4) Foreign debts payable. All receipts from loans tendered by friendly
states are entered in this account, and at the same time they are recorded in
the appropriate revenue account. The account appears as follows:
(1) Amounts redeemed or written off
(2) Credit balance indicates net
amount of foreign debts not
yet redeemed
(5) Accumulation of depreciation funds. All basic depreciation funds
paid in by enterprises are entered in this account, and at the same time they
are recorded in the appropriate revenue account. The account appears as
follows:
Accumulation of Depreciation Funds
Debits Credit
and transferred depreciation funds paid in
(2) Credit balance indicates net
amount of basic depreciation
funds paid in
Conversion differential. See (6) in Section 13-9 above.
Current account with higher organs. See (7) in Section 13-9 above.
Current account with subordinate organs. See (8) in Section 13-9
Other current accounts. See (9) in Section 13-9 above.
(10) Current account with previous year's accounts. This account is
set up in the new accounts of a given year, and all current transactions with
the previous year's accounts which arise during the period when final accounts
are being prepared are entered in this account. The account appears as follows:
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Current Account With Previous Year's Accounts
Debits
(1) Miscellaneous expenditures
arising during perioa or au-
justment for previous year (at
the same time these are entered
on the credit side of the "cash
in treasury" account)
(11) Financial accumulation. See
Credits
(1) Amounts of various kinds of
treasury deposits carried
over from previous year (at
the same time these are en-
tered on the debit side of
the appropriate treasury de-
posit asset accounts)
(2) Miscellaneous income arising
during period of adjustment
for previous year (at the
same time these are entered
on the debit side of the
"cash in treasury" account)
On completion of the previous
year's final accounts and
after the total assets and
liabilities have been trans-
ferred to this year's accounts,
the credit balance in this ac-
count is transferred to the
revenue account entitled "pre-
vious year's surplus"
(11) in Section 13-9 above.
(12) This year's surplus. When the final accounts for this year have been
completed. the balances in the various revenue and expenditure accounts are
transferred to this account. The account appears as follows:
(1) Debit balances of the various
expenditure accounts
(1) Credit balances of the various
revenue accounts
(2) The credit balance indicates
the amount by which revenn.'
exceeds... expenditure and
must be transferrer co cre
following year's revenue ac-
count entitled "previous
year's surplus"
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13-11. Accounts Classified as Both Asset and Liability Accounts
Among the asset and liability accounts discussed in the preceding sec-
tions of this chapter, the following five accounts appear ar both asset and
liability accounts: "current account with higher organs," 'current account
with subordinate organs," "other current accounts," "conversion differential"
and "financial accumulation." Although these accounts may show either debit
or credit balances and thus are either classified as assets or liabilities,
it is not necessary to establish both types of accounts in the general ledger.
When compiling the statement of surplus in general ledger accounts, the debit
or credit balances in the "conversion differential," "financial accumulation,"
and "current accounts with higher organs" accounts in the general ledger are
classified either as assets or liabilities. Also, the totals of debit or
credit balances in the subsidiary accounts of the "current account with sub-
ordinate organs" and "other current accounts" accounts in the general ledger
are variously classified as assets, liabilities, or assets and liabilities.
13-12. The Numbering of Accounts
This system's accounts are employed on all levels of Zeneral accounting
and are numbered by category as follows:
(1) Revenue accounts are numbered in series beginning with the des-
ignation "Receipt - 1."
(2) Expenditure accounts are numbered in seriep beginning with the
designation "Disbursement - 1."
(3) Allocation accounts, except for the "allocation of basic construc-
tion funds" account which is designated "Allocation - 1," are numbered in
series beginning with the designation "Allocation - 2."
The enumeration of the above three categories is the same as that used
in budget accounts.
(4) Asset accounts are numbered in series beginning with the designa-
tion "Asset - 1."
(51 Liability accounts are numbered in series beginning with the des-
ignation "Liability - 1."
13-13. Subsidiary Accounts
The revenue, expenditure, allocation, asset, and liability accounts dis-
cussed in preceding sections are all general ledger accounts. This system
provides that subsidiary accounts of these accounts are established as follows:
(1) Subsidiary accounts for the various revenue and exr"nditure accounts
are established according to the "class" and "type" account classifications
found in the general budget. The recording of entries in the "type" classifi-
cation under expenditure accounts is performed by budget (or planning), finan-
cial, or tax collection departments.
(2) Subsidiary accounts for the various allocation accounts are estab-
lished for each organ and are arranged in accordance with the 'category" and
"class" account classifications found in the general budget.
C-O-N-F-I-D-E-N-T-I-A-L
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C-0-17-F-I-D-1--N-T-1-A-1,
NOT RELEASABLE TO FOREICIT NATIONAlS
(3) Subsidiary accounts for asset and liability accounts are estab-
lished on each level of-general accounting according to the nature of the
accounting transaction or the name of the organ concerned.
13-14. The Application of Accounts
So that the student may better understand the correct usage of these
accounts, the methods of posting normal accounting transactions in general
accounting are presented in the table which follows:
1 Treasury, granary or warehouse
reports receipt of tax funds,
grain, or goods
2 Treasury reports receipt of de-
preciation funds or funds from
government bonds or foreign cred-
its
Method of posting
Debit: cash in treasury,
grain on hand, or goods
on hand (asset accounts)
Credit: a income (rev-
enue account)
Debit: cash in treasury
(asset account)
Credit: XX income (rev-
enue account)
Debit: financial accumu-
lation (asset account)
Credit: accumulation of
depreciation funds, gov-
ernment bonds payable,
or foreign debts payable
(liability accounts)
Treasury, granary, or warehouse Debit: XX income (rev-nu..
reports refunding of income account)
Credit: cash in t.rensury,
grain on hand, or goods
on hand (asset account;)
Treasury reports refunding of Debit: xX
depreciation funds in excess income rrre m;c
of receipts account)
Credit: cash in treasury
(asset account)
Debit: accumulation of
depreciation funds (lia-
bility account)
Credit: financial accumu-
lation (liability account)
When expending funds for national Debit: national defense ex-
defense, for subsidies to lower
levels of government, for pay- turei( (expenditure Or XX exccounr
ments into the central treasury, Credit: esury.,
or for interest on debts cash h riinre treasury.,
grain on hand, , or goode on
hand (asset accounts)
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Number
6
Accounting Item
When disbursing enterprise work-
ing capital or retiring govern-
ment bonds or foreign debts
When allotting funds to various
organs in the form of currency,
grain, goods, or transportation
checks
When approving accounts submitted
by various organs
When distributing basic con-
struction funds to special
bank for supervision of ex-
penditure
Special bank reports recovery
from various organs and en-
terprises of previous year's
unexpended basic construction
funds
Special bank reports disburse-
ment of basic construction
funds from supervisory ac-
count
Method of posting
Debit: XX expenditure
(expenditure account)
Credit: cash in treas-
ury, grain on hand, or
goods on hand (asset
accounts)
Debit: enterprise in-
vestment (asset account),
government bonds pay-
able, or foreign debts
payable (liability ac-
counts)
Credit: financial ac-
cumulation (liability
account)
Debit: XX allocation
(allocation account)
Credit: cash in treas-
ury, grain on hand,
goods on hand (asset
accounts), or trans-
portation checks pay-
able (liability ac-
count)
Debit: XX expenditure
(expenditure account)
Credit: XX allocation
(allocation account)
Debit: allocation of
basic construction
funds (allocation ac.-
count)
Credit: cash in treas-
ury (asset account)
Debit: allocation of
basic construction
funds (allocation
account)
Credit: XX income (rev-
enue account)
Debit: XX expenditure
(expenditure account)
Credit: allocation of
basic construction
funds (allocation ac-
count)
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NOT RELEASABLE TO FOREIGN"NATIONAL
Accounem
Special bank reports recovery
from various enterprises of
this year's unexpended basic
construction funds
When recovering basic construc-
tion funds paid out by special
bank
When converting transportation
checks received into budgetary
income
When recovering expenditures
Treasury reports receipt of
funds of indeterminate
nature
On determining nature of
temporary receipts, trans-
fer to budgetary income
Method of postir
Debit: allocation of
basic construction
funds (allocation ac-
count)
Credit: XX expenditure
account)
Debit: cash in treasury
(asset account)
Credit: allocation of
basic construction funds
(allocation account)
D"h't: XX allocation
(allocation account)
Credit: XX income
(revenue account)
Debit: 'transportation
checks payable (lia-
bility account)
Credit: XX income
(revenue account)
Debit: cash in treas-
ury (asset account)
Credit: %X income
(revenue account)
Debit: financial ac-
cumulation (asset
account)
Credit: enterprise
investment (onset
account)
Debit: each in trean-
ury, grain on hand,
or goods on hand
(asset accounts)
Credit: XX expenditure
(expenditure account)
Debit: cash in treas-
ury (asset account)
Credit: temporary re-
ceipts (liability ac-
count)
Debit: temporary re-
ceipts
count)
Credit: XX income (rev..
enue account)
C-O-N-F-I-D-E-N-T-I-A-L
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Granary reports exchange of grain Debit: exchanges of
for cash or goods
Warehouse reports exchange of
goods for cash or grain
Treasury reports exchange of
cash for grain or goods
Treasury reports proceeds real-
ized from sale of grain or
goods
Granary reports grain received
in exchange for cash
Warehouse reports goods received
in exchange for grain or cash
Treasury, granary, or warehouse
reports losses resulting from
exchanges of grain, cash, and
goods
An alternative ?ethod of posting
the above item is shown on the
right
Treasury, granary, or :areisoc
reports gains resultins 1,?0._.
exchanges of grain, cash, a:j_
goods
-20-
C -O-Id-F-I -D-3-Ii-T-I-A-L
NOT R%LEASABIE TO FOR. IGti ?iATI01;,1 :
grain, cash, and goods
(asset account)
Credit: grain on hand
(asset account)
Debit: exchanges of
grain, cash, and goods
(asset account)
Credit: goods on hand
(asset account)
Debit: exchanges of
grain, cash, and goods
(asset account)
Credit: cash in treas-
ury (asset account.)
Debit: cash in treas-
ury (asset account)
Credit: exchanges of
grain, cash, and goods
asset account)
Debit: grain on hand
(asset account)
Credit: exchanges of
grain, cash, and goods
(asset account)
Debit: goods on hand
(asset account)
Credit: exchanges of
grain, cash, and goods
(ass e:. account)
Det_t convr,r= ion dif-
ferentiai (asset ac-
count)
Credit: exchanges of
,rain, cash, a::3 goods
(asset account)
Debit: can:] in tans.
ury, goods on hand,
train on har:1, and con..
version diffarential
(co st aroou:l:.C )
Credit-.; exr.'r:r, r. ;es of
grain, cs-h, ani
F.ooq:;
(asset account)
Debi ;: cps
Y. in treasury,
;rain on },and, and on `land (as _t accounts)
~redi.t: aon:'er~ion dif-
i':rr:n'cial. (liaUiiit;, ac-
III
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Number
29
C-O-N-F-I-D-E-N-T-I-A-L
NOT RELEASABLE TO FOREIGN NATIONALS
Method of Posting
Debit: cash in treas-
ury, grain on hand,
or goods on hand
(asset accounts)
Credit: exchanges of
grain, cash, and goods
(asset account) and
conversion differential
Accounting Item
An alternative method of posting
the above item is shown on the
right
(liability account)
Granary or warehouse reports Debit: conversion dif-
losses resulting from supply ferential (asset ac-
of grain or goods count)
Credit: grain or goods
on hsnd (asset ac-
counts)
When making good the above loss Debit.: conversion dif-
with currency fe t
r
i
Granary or warehouse reports
gains resulting from supply
of grain or goods
an
al (asset ac-
count)
Credit: cash in treas-
ury (asset account)
Debit: grain or goods
on hand (asset accounts)
Credit: conversion dif-
ferential (liability
account)
When disbursing funds on behalf
of higher, subordinate, or
other general accounting organs
When recovering funds disbursed
on behalf of other organs
When approving final accounts
submitted by leading produc-
tion departments [ministries?)
for basic construction funds
disbursed through special banks
When approving amounts of basic
construction declared obsolete
by leading producation depart-
ments
C-O-N-F-I-D-E-N-T-I-A-L
NOT RELEASABLE TO FOREIGN NATIONALS
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Debit: current accounts
wi-.h higher, subordinate,
or other organs (asset
accounts)
Credit: cash in treasury
(asset account)
Debit: cash in treasury
(asset account)
Credit: current accounts
with higher, subordinate,
or other organs (asset
accounts)
Debi.: enterprise in-
vestment (asset account)
Credit: financial ac-
cumulation (liability
account)
Debit: financial accumu-
lation (asset account)
Credit: enterprise in-
vestment (asset ac-
count)
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C-O-N-F-I-D-E-P1-T-I-A-L
NOT RELEASABLE TO FOREIGN NATIONALS
Accounting Item
When recovering allocation sur-
pluses or expenditures periodi-
cally or at end of year
When closing conversion dif-
ferential account at end of
year and there is a debit
balance
Method of Posting
Debit: cash in treas-
ury, grain on hand, or
goods on hand (asset
accounts)
Credit: XX allocation
(allocation account)
or XX expenditure (ex-
penditure account)
Debit: other expendi-
tures (expenditure
account)
Credit: conversion
differential (asset
account)
When closing conversion dif-
ferential account at end of
year and there is a credit
balance
Debit: conversion dif-
ferential (liability
account)
Credit: other income
(revenue account)
Debit: current account
with next year's accounts
(asset account)
Credit: cash in treasury
(asset account)
Debit: cash in treasury
(asset account)
Credit: current account
with next year's accounts
(asset account)
When miscellaneous income arises
during period of adjustment at
end of year (in old accounts)
When miscellaneous expenditures
arise during period of adjust-
ment at end of year (in old ac-
counts)
When closing at end of year,
transfer balances from the
various revenue accounts into
"this year's surplus" account
Debit: current account
with next year's accounts
(asset account)
Credit: XX income (rev-
enue account)
Debit: XX expenditure
(expenditure account)
Credit: current account
with next year's accounts
(asset account)
Debit: XX income (revenue
account)
Credit: this year's sur-
plus (liability account)
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NOT RELEASABLE TO FOREIGN NATIONALS)
Number Accounting Item
45 When closing at end of year, trans-
fer balances from the various ex-
penditure accounts into "this
year's surplus" account
46 When receiving income for previous
year during period of adjustment
at beginning of the next year
Method of Posting
Debit: this year's sur-
plus (liability account)
Credit: XX expenditure
(expenditure account)
Debit: cash in treasury
(asset account)
Credit: current account
with previous year's
accounts (liability ac-
count)
When making disbursements for pre- Debit: current account
vious year during period of ad- with previous year (lia-
Justment at beginning of the next bility account)
year Credit: cash in treasury
(asset account)
13-15. Examples of Recording Normal Accounting Transactions
So that the student may have a thorough understanding of the actual
application of general accounts and become familiar with normal accounting
transactions which arise under this system, the following specific examples
of posting accounting transactions are offered as reference material.
(1) General treasury reports receipt of various kinds of tax revenues
from subordinate treasuries as follows (in 1,000 yuan):
State-operated enterprise business tax 250,000
Cooperative business tax 120,060
Public-private Jointly operated enterprise
business tax
Privately operated industrial and commercial
enterprise business tax
Public-private Jointly operated enterprise
income tax
320,000
50,000
58,000
Privately operated industrial and commercial
enterprise income tax 160,000
Stamp tax 30,000
Import duties 130,000
Export duties 250,000
C-O-N-F-I-D-E-N-T-I-A-L
NOT RELEASABLE TO FOREIGN NATIONALS
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Debit: cash in treasury
Credit: income from industrial and commercial
business taxes
income from industrial and commercial
income taxes
Debit: grain on hand
income from stamp taxes
30,000
income from customs duties
380,000
(2) Granary reports receipt of XX chin [one chin equals 0.5 kilograms)
of grain converted into currency in the amount of 580,000 yuan.
293,000
580,000
580,000
(3) warehouse reports receipt of goods seized as war booty and turned
over by General Headquarters of the People's Liberation Army, the value of
the goods being 250,000 Yuan,
Debit:
goods on hand
250,000
Credit:
income from public property
250,000
(4) Issue this month's treasury warrants in accordance with the allocated
expenditure budget as follows:
Debit.: allocation for administrative expense
of administrative organs
allocation for health
communications expenditures
allocation for education
Credit: cash in treasury
grain on hand
Debit: enterprise investment
Credit: financial accumulation
Amount of currency disbursed
Administrative expenses 500,000
Health operating expense 300,000
Working capital for communications enterprises 300,000
Amount of grain disbursed
Educational operating expense 400,000
500,000
300,000
300,000
400,00o
1,100,000
400,000
300,000
300,000
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C-O-N-F-I-D-E-N-T-I-A-L
NOT RELEASABLE TO FOREIGN NATIONALS
(5) General treasury reports receipt of various kinds of income from
subordinate treasuries as follows:
Heavy industry profits 250,000
Light industry profits 150,000
Railway profits
180,000
Postal and telecommunications profits
120,000
Bank profits
100,000
Heavy industry basic depreciation funds
50,000
Light industry basic depreciation funds
50,000
Railway enterprise basic depreciation funds
100,000
Post and telecommunications enterprise basic
depreciation funds 20,000
Operating income from various kinds of
economic construction 200,000
Income from clearing warehouses 150,000
Income received from lower levels of government 300,000
Income "rom production enterprises of the
armed forces
100,000
Debit: cash in treasury 1,820,000
Credit: income from enterprise profits 800,000
income from basic depreciation funds
paid in by enterprises 220,000
various kinds of operating income 200,000
administrative income 50,000
income from public property 150,000
income paid in by subordinate levels of
government 300,000
other income 100,000
Debit: financial accumulation 220,000
Credit: accumulation of depreciation funds 220,000
C-O-P-F-I-D-E-N-T-I-A-
NOT RELEASABLE TO FOREIGN NATIONAl
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(6) Issue various kinds of treasury warrants in accordance with the
allocated expenditure budget as f
l
NOT REIEASAELE TO FOREIGN NATIONALS
500,000
300,000
0
ows:
National defense expenditures
Heavy industry working capital
Debit: national defense ar anit?..
heavy industry expenditures
300,000
Credit: cash in treasury
800,000
Debit: enterprise investment
300,000
Credit: financial accumulation
300,000
(7) Issue treasury warrant for allocation of 2 million ;van of basic
construction funds to special bank for supervision of expenditure.
Debit: allocation of basic construction funds
2,000,000
(8) Special bank reports disbursement of 500,000 yuan from supervisory
account as investment in railway construction.
Credit: cash in treasury
Debit: railway expenditures
500,000
Credit: allocation of basic construction funds
500,000
(9) General treasury reports recovery of 100,000 yuan of basic con-
struction funds paid out by special bank.
Debit: cash in treasury
100,000
Credit: allocation of basic construction funds
500,000 (sic]
(10) In accordance with the allocated expenditure budget, distribute
the following amounts of funds in the form of transportation checks:
Administrative expenses
100,000
Heavy industry working capital
200,000
Debit: allocation for administrative expenses
of administrative organs 100,000
heavy industry expenditures 200,000
C-O-N-F-I-D-E-N-T-I-A-L
NOT RELEASABLE TO FOREIGN NATIONALS
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Credit: transportation checks payable
366,60
_0
Debit: enterprise investment
206,000
Credit: financial accumulation
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C-O-N-F-I-D-E-N-T-I-A-L
? NOT RELEASABLE TO FOREIGN NATIONALS
(11) Ministry of Railways turns over 100,000 yuan in excess working
capital and 200,000 yuan as income from sale of fixed assets, using trans-
portation checks in lieu of currency.
Debit: transportation checks payable 300,000
Credit: income from sale of enterprise fixed
assets
income from repayment of enterprise
working capital 200,000
Debit: financial accumulation 300,000
Credit: enterprise investment 300,000
(12) General treasury reports receipt from subordinate treasuries
of funds of an indeterminate nature.
Debit:
cash in treasury
100,000
Credit:
temporary receipts
100,000
(13) General treasury reports that above item has been designated
as income from contributions.
Debit:
temporary receipts
100,000
Credit:
other income
100,000
(14) General treasury reports refunding of 20,000 yuan of excess
basic construction funds paid in by the Ministry of Railways.
Debit:
income from basic depreciation funds paid
in by enterprises
20,000
Credit:
cash in treasury
20,000
Debit:
accumulation of depreciation funds
20,000
Credit.:
financial accumulation
20,000
(15) In payment of this month's operating expenses of the Ministry
of Textile Industry amounting to 350,000 Yuan, issue a treasury warrant
for 200,000 yuan to be disbursed by the general treasury and authorize
the remainder to be deducted from profits to be paid in by the ministry
thi
s
mon
th
.
Debit:
allocation to textile industry
350,000
Credit:
cash in treasury
200,000
income from enterprise profits
150,000
C-O-N-F-I-D-E-N-T-I-A-L
NOT RELEASABLE TO FOREIGN NATIONALS
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(16) On approval of accounts submitted, clear 250,000 yuan in funds
spent last month by the Ministry of Public Health to the appropriate ex-
penditure account.
Debit: expenditures for administrative
expenses of administrative organs 250,000
Credit: allocation for administrative expenses
of administrative organs 250,000
(17) Granary reports that on order it has turned over XX chin of
commercial grain valued at one million yuan to the Ministry of Commerce
for the purpose of stablizing the market price of rice.
Debit: exchanges of grain, cash, and goods 1,000,000
Credit: grain on hand 1,000,000
(18) General treasury reports receipt from subordinate treasuries
of proceeds from sale of grain totaling 980,000 yuan.
Debit: cash in treasury 980,000
conversion differential 20,000
Credit: exchanges of grain, cash, and goods 1,000,000
(19) General treasury reports receipt from subordinate treasuries
of proceeds from sale of goods totaling 530,000 yuan.
Debit: cash in treasury 530,000
Credit: exchanges of grain, cash, and goods 530,000
(20) Warehouse reports sale of goods valued at 560,000 yuan.
Debit: exchanges of grain, cash, and goods 530,000
30,000
560,000
(21) Issue treasury warrant for 200,000 yuan as a disbursement on
behalf of a certain local government.
Debit:
current account with subordinate organs
200,000
Credit:
cash in treasury
200,000
(22) Permission is granted to treat the above disbursement as a local
government subsidy.
Debit: expenditure for subsidies to local
governments
200,000
Credit: current account with subordinate organs
200,000
C-0-N-F-I-D-E-rr-T-I-A-
NOT RELEASABLE TO FOREIGN NATIONA
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C-0-N-F-I-D-E-N-T-I-A-L
NOT RELEASABLE TO FOREIGN NATIONALS
(23) Approval is given to final budget totaling 500,000 yuan for XX
railway construction submitted by Ministry of Railways.
Credit: financial accumulation 500,000
(24) On approval of accounts submitted for the previous month, clear
300,000 yuan in education operating expense and 200,000 yuan in operating
expense of the Ministry of Textile Industry to the appropriate expenditure
accounts.
Debit: educational expenditures 300,000
Credit: allocation to education 300,000
Debit: textile industry expenditures 200,000
Credit: allocation to textile industry 200,000
50X1-HUM
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