APPENDIX M51 GENERAL LEDGER ACCOUNT DESCRIPTIONS
36X4118 EDUCATION LOAN, VA REVOLVING FUND
This appendix contains the general ledger account descriptions and indicates the title, type of account, purpose, entries representing most of the types of transactions and formulas for trial balance verification for the education loan manual accounting system. This appendix is applicable to all regional offices.
GENERAL LEDGER CHART OF ACCOUNTS
The following general ledger accounts described herein will be used:
Account Title
Number
1012 Disbursing Authority
1023 Receipts Collected
1027 Fund Balances With U.S. Treasury-Not Available
1036 Receipts in Transit
1145 Receivables-Loans
1217 Receivables-Loan Defaults
1240 Allowance for Losses
2013 Accounts Payable
2038 Disbursements in Transit
2241 Capital
3224 Interest Income From Loans
3381 Fees Collected
4222 Provision for Losses
5227 Unobligated Allowance
5229 Expended Allowance
6032 Disbursing Authority Advanced or Withdrawn
6135 Loan Defaults and Loan Receivables Transferred
to Other Stations
6145 Loan Defaults and Loan Receivables Transferred
From Other Stations
Account Title
Number
6312 Allowance Issued or Received
7101 Uncollectible Loan Defaults
7102 Uncollectible Loan Defaults Reported to GAO
1012 DISBURSING AUTHORITY
This is a debit balance (asset) account maintained to show the amount of funds available for disbursement from the VA Education Loan Fund. The disbursing authority available is the net of balances in accounts 1012 and 2038.
STATION ENTRIES
Debits Credits:
a. Disbursing authority a. Disbursing authority
received. withdrawn.
Contra to 6032. Contra to 6032.
b. Canceled checks-current b. Disbursements of loans.
fiscal year. Contra to 1145.2.
Contra to 1145.2, 338l. .
. c. Reversal of net
c. Net disbursements in transit disbursements in transit at
at the end of each month. the end of the previous month.
Contra to 2038. Contra to 2038.
. d. Transfer of disbursing
. authority to receipts collected
. for fees.
. Contra to 1023.
. c. Net cumulative balance
. closed at end of fiscal year.
. Contra to 2241.
1023 RECEIPTS COLLECTED
This is a debit balance (asset) account showing collections received and distributed to the applicable asset or income account. This account is not available for disbursement at the field station level.
STATION ENTRIES
Debits: Credits:
a. Record collection of fees, a. Net cumulative debit balance
interest, or principal closed at end of
by field station. fiscal year.
Contra to an asset account Contra to 2241.
(1000 series), an income
account (3000 series). b. Uncollectible checks
applicable to principal,
b. To record prior fiscal year fees, or interest balances.
adjustments of canceled checks. Contra to 1145.3, 1145.9,
Contra to 1145.9, 1217.11. 1217.3, 1217.11, 3224,
. 3381, 1240.1, 1240.2.
c. Reversing entry for the .
amount of credit for the c. Refund of prepaid fee.
previous month. Contra to 3381.
Contra to 1036. .
. d. Refund of amounts previously
. withheld from benefits.
. Contra to 1145.4, 1217.4, 3224.
. e. Net receipts in transit at
. the end of each month.
. Contra to 1036.
1027.1 FUND BALANCES WITH U.S. TREASURY-NOT AVAILABLE DISBURSING AUTHORITY-ADMINISTRATIVE COSTS
This is a debit balance (asset) account maintained to show the amount of monies collected and disbursed from the VA Education Loan Fund. Administrative costs are fees, comprising of loan collection costs but not court costs, marshal fees and court directed interest in excess of the Education Loan Fund's normal interest rate, charged to the borrower. All monies will be disbursed by SF 1081 to 36 1099 at least once a month.
STATION ENTRIES
Debits: Credits:
Record collection of Record disbursement of
administrative costs. administrative costs.
Contra to 2013.1. Contra to 2013.1.
1027.2 FUND BALANCES WITH U.S. TREASURY-NOT AVAILABLE-INTEREST COLLECTED (COURT DIRECTED)
This is a debit balance (asset) account maintained to show the amount of monies collected and disbursed from the VA Education Loan Fund. Interest collected at the direction of a local court in excess of the normal interest rate charged is transferred at least once a month to 36 1435.
STATION ENTRIES
Debits: Credits:
Record collection of interest. Record disbursement of interest.
Contra to 2013.2. Contra to 2013.2.
1027.3 FUND BALANCES WITH U S. TREASURY-NOT AVAILABLE-COURT COSTS
This is a debit balance (asset) account maintained to show the amount of monies collected and disbursed from the VA Education Loan Fund. The collection of court costs is a reimbursement of expenses paid to the court involved. All monies will be disbursed by SF 1081 to 36 3220 at least once a month
STATION ENTRIES
Debits: Credits:
Record collection of court Record disbursement of court
costs. costs.
Contra to 2013.3. Contra to 2013.3.
1027.4 FUND BALANCES WITH U.S. TREASURY-NOT AVAILABLE-MARSHAL FEES
This is a debit balance (asset) account maintained to show the amount of monies collected and disbursed from the VA Education Loan Fund. The collection of marshal fees is a reimbursement of expenses paid for services. All monies will be disbursed by SF 1081 to 36 086 at least once a month.
STATION ENTRIES
Debits: Credits:
Record collection of marshal Record disbursement of marshal
fees. fees.
Contra to 2013.4. Contra to 2013.4.
1036 RECEIPTS IN TRANSIT
This is a debit balance (asset) account maintained for the VA Education Loan Fund to show the amount of receipts in transit to the Treasury at the end of each month.
STATION ENTRIES
Debits: Credits:
Net receipts in transit at the Reversing entry for the amount
end of each month. of credit for the
Contra to 1023. previous month.
Contra to 1023.
1145 RECEIVABLES-LOANS
This is a debit balance (asset) account maintained to show the total principal amount due the United States for loans made from the VA Education Loan Fund. The balances in this account will control the subsidiary records maintained on VA Form 4-5220, Veterans Education Loan Account Card. This account will be maintained via a series of analytical accounts designated as follows:
1145.1 Opening Balance-Current Fiscal Year. 1145.2 Loans Disbursed-Current Fiscal Year. 1145.3 Cash Collections-Current Fiscal Year. 1145.4 Benefit Deductions-Current Fiscal Year. 1145.5 Loan Defaults-Current Fiscal Year. 1145.6 Writeoffs (Death or Disability)-Current Fiscal Year. 1145.7 WriteoffsBankruptcy-Current Fiscal Year. 1145.8 Transfers In or Out-Current Fiscal Year. 1145.9 Adjustments-Prior Fiscal Year. 1145.10 Writeoffs-Administrative-Current Fiscal Year.
STATION ENTRIES
1145.L OPENING BALANCE
Debits: Credits:
Post closing entries for the Post closing entries for the
net cumulative debit balances net cumulative credit balances
of 1145 analytical accounts in 1145 analytical accounts at
at end of fiscal year. Normally the end of fiscal year.
analytical account 1145.2 will Normally analytical accounts
have a debit balance whereas 1145.3 through 1145.7 and
1145.8 may have either a debit 1145.9 will have credit
or credit balance. balances whereas 1145.8
Contra to 1145.2, 1145.8. may have either a debit
. or credit balance.
. Contra to 1145.3, 1145.4,
. 1145.5, 1145.6, 1145.7, 1145.8,
. 1145.9, 1145.10.
1145.2 LOANS DISBURSED
Debits: Credits:
Loans disbursed. a. Canceled checks-current
Contra to 1012. fiscal year.
. Contra to 1012.
. b. Net cumulative debit balance
. closed at end of fiscal year.
. Contra to 1145.1.
1145.3 CASH COLLECTIONS
Debits: Credits:
a. Uncollectible checks Cash collections applicable to
applicable to principal principal balances.
balances. Contra to 1023.
Contra to 1023. .
b. Net cumulative credit balance .
closed at end of fiscal year. .
Contra to 1145.1 .
1145.4 BENEFIT DEDUCTIONS
Debits: Credits:
a. Refunds of principal amounts Offsets from benefits applied to
previously withheld from principal balances of loans.
benefits. Contra to 1023.
Contra to 1023. .
b. Net cumulative credit balance .
closed at end of fiscal year. .
Contra to 1145.1. .
1145.5 LOAN DEFAULTS
Debits: Credits:
Net cumulative credit balance Defaults on principal balances
closed at end of fiscal year. of loans.
Contra to 1145.1. Contra to 1217.2.
1145.6 WRITEOFFS (DEATH OR DISABILITY)
Debits: Credits:
Net cumulative credit balance Writeoff of principal balances
closed at end of fiscal year. of loans due to death or
Contra to 1145.1. disability.
. Contra to 1240.1.
1145.7 WRITEOFFS-BANKRUPTCY
Debits: Credits:
Net cumulative credit balance Writeoff of principal balances
closed at end of of loans due to
fiscal year. bankruptcy.
Contra to 1145.1 Contra to 1240.1.
1145.8 Transfer In or Out
Debits: Credits:
a. Principal loan balances a. Principal loan balances
transferred from other stations. transferred to other stations.
Contra to 6145. Contra to 6135.
b. Net cumulative credit balance
closed at end of fiscal year. b. Net cumulative debit balance
Contra to 1145.1. closed at end of fiscal year.
. Contra to 1145.1.
1145.9 Adjustments-Prior Fiscal Year
Debits: Credits:
Net cumulative credit balance Canceled checks.
closed at end of fiscal year. Contra to 1023.
Contra to 1145.1. .
1145.10 WRITEOFFS-ADMINISTRATIVE
Debits: Credits:
a. Net cumulative credit balance Writeoff of principal balance of
closed at end of fiscal year. loans in compliance with
Contra to 1145.1. administrative requirements.
. MP4, part VIII.
b. Reversal of writeoff of Contra to 1240.1.
principal balance of loan in .
compliance with administrative .
requirements in MP-4, part VIII. .
Contra to 1240.1. .
1217 RECEIVABLES-LOAN DEFAULTS
This is a debit balance (asset) account maintained for the VA Education Loan Fund to show the total amount due the United States as a result of defaults on loans. The balance in this account will control subsidiary records maintained on Veterans Education Loan account card. This account will be maintained via a series of analytical accounts designated as follows:
1217.1 Opening Balance-Current Fiscal Year. 1217.2 Receivables-Loan Defaults-Current Fiscal Year. 1217.3 Cash Collections-Current Fiscal Year. 1217.4 Benefit Deductions-Current Fiscal Year. 1217.5 Compromise. 1217.6 Writeoffs-Death or Disability-Current Fiscal Year. 1217.7 Writeoffs-Bankruptcy-Current Fiscal Year. 1217.8 Transfers In or Out-Current Fiscal Year. 1217.11 Adjustments-Prior Fiscal Year. 1217.12 Writeoffs-Administrative-Current Fiscal Year.
STATION ENTRIES
1217.1 OPENING BALANCE
Debits: Credits:
Post closing entries for the net Post closing entries for the net
cumulative debit balance of the cumulative credit balances of
1217 analytical accounts at the the 1217 analytical accounts at
end of the fiscal year. the end of the fiscal year.
Normally analytical account Normally analytical accounts
1217.2 will have a debit balance 1217.3, 1217.4, 1217.5, 1217.6,
whereas 1217.8 may have either and 1217.7 will have
a debit or credit balance. credit balances whereas 1217.8
Contra to 1217.2, 1217.8, may have either a debit or
1217.11. credit balance.
. Contra to 1217.3, 1217.4,
. 1217.6, 1217.7, 1217.8,
. 1217.12.
1217.2 RECEIVABLES-LOAN DEFAULTS
Debits: Credits:
Defaults on principal balances Net cumulative debit balance
of loans. closed at end of fiscal year.
Contra to 1145.5. Contra to 1217.1.
1211.3 CASH COLLECTIONS
Debits: Credits:
a. Uncollectible checks Cash collections applicable to
applicable to principal balances principal balances of loan
of loan defaults. defaults.
Contra to 1023. Contra to 1023.
b. Net cumulative credit balance .
closed at end of fiscal year. .
Contra to 1217.1 .
1217.4 BENEFIT DEDUCTIONS
Debits: Credits:
a. Refunds of amounts previously Offsets from benefits applied to
withheld from benefits. principal balances of loan
Contra to 1023. defaults.
Contra to 1023.
b. Net cumulative credit balance .
closed at end of fiscal year. .
Contra to 1217.1. .
1217.5 COMPROMISE
Debits: Credits:
Net cumulative credit balances Writeoffs of principal amounts
closed at end of fiscal year. of loan defaults due to
Contra to 1217.1. compromise.
. Contra to 1240.2.
1217.6 WRITEOFFS-DEATH OR DISABILITY
Debits: Credits:
Net cumulative credit balances Writeoffs of principal amounts
closed at end of fiscal year. of loan defaults due to death or
Contra to 1217.1. disability.
. Contra to l240.2.
1217.7 WRITEOFFS-BANKRUPTCY
Debits Credits:
Net cumulative credit balances Writeoffs of principal amounts
closed at end of fiscal year. of loan defaults due to
Contra to 1217.1. bankruptcy.
. Contra to l240.2.
1217.8 TRANSFERS IN OR OUT
Debits: Credits:
a. Principal loan default a. Principal loan default
balances transferred from other balances transferred to other
stations. stations.
Contra to 6145. Contra to 6135.
b. Net cumulative credit balance b. Net cumulative debit balance
closed at end of fiscal year. closed at end of fiscal year.
Contra to 1217.1. Contra to 1217.1.
1217.11 ADJUSTMENTS-PRIOR FISCAL YEAR
STATION ENTRIES
Debits: Credits:
Net cumulative credit balance Canceled checks.
closed at end of fiscal year. Contra to 1023.
Contra to 1217.1. .
1217.12 WRITEOFFS-ADMINISTRATIVE
Debits: Credits:
a. Net cumulative credit balance Writeoff of principal balance of
closed at end of fiscal year. loans in compliance with
Contra to 1217.1. administrative requirements in
. MP-4, part VIII. Contra to
b. Reversal of writeoff of 1240.2.
principal balance of loans in .
compliance with administrative .
requirements in MP-4, part VIII. .
Contra to 1240.2. .
1240 ALLOWANCE FOR LOSSES
This is a credit balance (asset valuation) account maintained to show the general ledger accounts 1145 Receivables-Loans and 1217 Receivables-Loan Defaults at a current value, adjusted for expected writeoffs for death or disability, bankruptcy, compromise and administrative purposes. This account should be reviewed at least annually and the Provision for Losses recomputed. Adjustments may be made during the accounting period if it appears that a debit balance may occur in this account. (For control purposes call VA Central Office (047C2) at FTS 389-5031 before making an adjustment.)
1240.1 Allowance for Losses-Receivables-Loans. 1240.2 Allowance for Losses-Receivables-Loan Defaults.
STATION ENTRIES
1240.1 Allowance for Losses-Receivables-Loans
Debits: Credits:
a. Writeoff of principal balance a. Annual provision for loan
of loan due to death or receivable losses.
disability. Contra to 4222.1.
Contra to 1145.6. .
b. Adjustment to annual
b. Writeoff of principal balance provision for loan receivable
of loan due to bankruptcy. losses.
Contra to 1145.7. Contra to 4222.1.
c. Writeoff of principal balance c. Reversal of writeoff of
of loan in compliance with principal balance of loan in
administrative requirements. compliance with administrative
Contra to 1145.10. requirements.
. Contra to 1145.10 or 1145.9
d. Adjustments to annual (PFY).
provision for loan receivable .
losses. d. To record cash collection
Contra to 4222.1. reversing writeoff of principal
. balance.
. Contra to 1023.
1240.2 ALLOWANCE FOR LOSSES-RECEIVABLES-LOAN DEFAULTS
Debits: Credits:
a. Writeoff of principal balance a. Annual provision for loan
of loan defaults due to default receivable losses.
compromise. Contra to 4222.2.
Contra to 1217.5.
b. Adjustment to annual
b. Writeoff of principal balance provision for loan default
of loan defaults due to death receivable losses.
or disability. Contra to 4222.2.
Contra to 1217.6.
c. Reversal of writeoff of
c. Writeoff of principal balance principal balance of loan
of loan defaults due to default in compliance with
bankruptcy. administrative requirements.
Contra to 1217.7. Contra to 1217.12 or 1217.11
(PFY).
d. Writeoff of principal balance
of loan default in compliance d. To record cash collection
with administrative reversing writeoff of principal
requirements. balance.
Contra to 1217.12. Contra to 1023.
STATION ENTRIES
Debits:
e. Adjustment to annual .
provision for loan default .
receivable losses. .
Contra to 4222.2. .
2013.1 ACCOUNTS PAYABLE-ADMINISTRATIVE COSTS
This is a credit balance (liability) account maintained for the VA Education Loan Fund to show the amount of Administrative Cost Collected and the corresponding liability. Administrative costs are fees, comprising of loan collection costs but not court costs, marshal fees and court directed interest in excess of the Education Loan Fund's normal interest rate, charged to the borrower. All collections will be disbursed by SF 1081 to 36 1099 at least once a month.
STATION ENTRIES
Debits: Credits:
Record disbursement of Record collection of
administrative cost. administrative costs.
Contra to 1027.1. Contra to 1027.1.
2013.2 ACCOUNTS PAYABLE-INTEREST COLLECTED (COURT DIRECTED)
This is a credit balance (liability) account maintained to show the liability for the amount of monies collected and deposited in the VA Education Loan Fund. Interest collected at the direction of a local court in excess of the normal interest rate charged is transferred at least once a month to 36 1435.
STATION ENTRIES
Debits: Credits:
Record disbursement of interest. Record collection of interest.
Contra to 1027.2. Contra to 1027.2.
2013.3 ACCOUNTS PAYABLE-COURT COSTS
This is a credit balance (liability) account maintained for the VA Education Loan Fund to show the corresponding liability for the court costs collected. All monies will be disbursed by SF 1081 to 36 3220 at least once a month.
STATION ENTRIES
Debits: Credits:
Record disbursement of court Record collection of court
costs. costs.
Contra to 1027.3. Contra to 1027.3.
2013.4 ACCOUNTS PAYABLE-MARSHAL FEES
This is a credit balance (liability) account maintained for the VA Education Loan Fund to show the corresponding liability for the marshal fees collected. All monies will be disbursed by SF 1081 to 36 0869 at least once a month.
STATION ENTRIES
Debits: Credits:
Record disbursement of marshal Record collection of marshal
fees. fees.
Contra to 1027.4 Contra to 1027.4.
2038 DISBURSEMENTS IN TRANSIT
This is a credit balance (liability) account maintained for the VA Education Loan Fund to show the amount of disbursements in transit to the Treasury Disbursing Center at the end of each month. A debit balance will result when check cancellations exceed gross disbursements.
STATION ENTRIES
Debits: Credits:
Reversing entry for the amount Net disbursements in transit at
of credit entry for the previous the end of each month.
month. Contra to 1012.
Contra to 1012. .
2241 CAPITAL
This is a credit balance (accountability) account maintained for the VA Education Loan Fund to show the net worth resulting from operations of the Fund.
Entries will be made to this account only through prescribed closing entries at the end of each fiscal year. If for any reason, it is necessary to effect a prior year adjustment, it will be processed as a current year transaction and posted to the applicable nominal account(s).
STATION ENTRIES
Debits: Credits:
Net cumulative debit balances in Net cumulative debit balances in
nominal and interoffice accounts nominal and interoffice accounts
closed at end of fiscal year. closed at end of fiscal year.
Contra to 1012, 1023, 4222.1, Contra to 3224, 3381, 5227,
4222.2, 6032, 6135, 6312. 5229, 6032, 6145.
3224 INTEREST INCOME FROM LOANS
This is a credit balance (nominal) account maintained to show the amount of interest collected from VA Education Loans.
STATION ENTRIES
Debits: Credits:
a. Uncollectible checks Collections (includes offsets
applicable to interest balances from benefits) of interest on
of loans. loans.
Contra to 1023. Contra to 1023.
b. Refund of collections .
(includes offsets from benefits) .
applicable to interest balances .
on loans. .
Contra to 1023. .
c. Net cumulative credit balance .
closed at end of fiscal year. .
Contra to 2241. .
3381 FEES COLLECTED
This is a credit balance (nominal) account maintained for the VA Education Loan Fund to show the amount of fees collected on loans.
STATION ENTRIES
Debits: Credits:
a. Uncollectible checks a. Fees collected on loans
applicable to fees. (include amounts withheld for
Contra to 1023. loan disbursements).
Contra to 1023.
b. Net cumulative credit balance
closed at end of fiscal year. b. Fees withheld from loan
Contra to 2241. disbursements.
Contra to 1145.2.
c. Canceled checks-current .
fiscal year-fee prepaid or net .
loan. .
Contra to 1012, 1023, 1145.2. .
4222 PROVISION FOR LOSSES
This is a debit balance (expense) account maintained to show the amount of loans and loan default receivables written off due to compromise, bankruptcy, death, disability, and in compliance with other administrative writeoff requirements.
This provision is computed by using the formula provided with the pro forma entries.
4222.1 Provision for Losses-Receivables-Loans. 4222.2 Provision for Losses-Receivables-Loan Defaults.
STATION ENTRIES
4222.1 Provision for Losses-Receivables-Loans
Debits: Credits:
a. Annual provision for loan a. Adjustment to annual
receivable losses. provision for loan receivable
Contra to 1240.1. losses. (For control purposes
call VA Central Office (047C2)
b. Adjustment to annual at FTS 389-5031 before making an
provision for loan receivable adjustment.)
losses. (For control purposes Contra to 1240.1.
call VA Central Office (047C2)
at FTS 3895031 before making b. Net cumulative debit balance
the adjustment.)Contra to closed at end of fiscal year.
1240.1. Contra to 2241.
4222.2 Provision for Losses-Receivables-Loan Defaults
Debits: Credits:
a. Annual provision for loan a. Adjustment to annual
default receivable losses. provision for loan default
Contra to 1240.2. receivable losses. (For control
. purposes call VA Central Office
b. Adjustment to annual (047C2) at FTS 3895031 before
provision for loan default making an adjustment.)
receivable losses. (For control Contra to 1240.2.
purposes call VA Central Office .
(047C2) at FTS 3895031 before b. Net cumulative debit balance
making an adjustment.) closed at end of fiscal year.
Contra to 1240.2. Contra to 2241.
5227 UNOBLIGATED ALLOWANCE
This is a credit balance account maintained by the field station showing the unobligated allowance available. Field Station account. Posting media VA Form 4-4564.
STATION ENTRIES
Debits: Credits:
a. Allowance withdrawn. a. Allowance received.
Contra to 6312. Contra to 6312.
b. Expended allowance processed b. Canceled checks, reversal of
and charged to account 1145.2 payments from account 1145.2
Loans Disbursed-Current Fiscal Loans Disbursed-Current Fiscal
Year. Year and account 3381 Fees
Contra to 5229. Collected.
Contra to 5229.
c. Net cumulative balance closed .
at end of fiscal year. .
Contra to 2241. .
5229 EXPENDED ALLOWANCE
This is a credit balance account maintained to show the amount of expended allowance. Field station account. Posting media is the obligating document.
STATION ENTRIES
Debits: Credits:
a. Net cumulative balance closed Net total of expended allowance.
at end of fiscal year. Contra to 5227.
Contra to 2241. .
b. Canceled checks, reversal of .
payments from account 1145.2 .
Loans Disbursed-Current Fiscal .
Year and account 3381 Fees .
Collected. .
Contra to 5227. .
6032 DISBURSING AUTHORITY ADVANCED OR WITHDRAWN
This is a debit or credit balance (interoffice) account maintained for the VA Education Loan Fund to show the cumulative net amount of disbursing authority received or withdrawn.
STATION ENTRIES
Debits: Credits:
a. Disbursing authority a. Disbursing authority
withdrawn. received.
Contra to 1012. Contra to 1012.
b. Net cumulative credit balance b. Net cumulative debit balance
closed at end of fiscal year. closed at end of fiscal year.
Contra to 2241. Contra to 2241.
6135 LOAN DEFAULTS AND LOAN RECEIVABLES TRANSFERRED TO OTHER STATIONS
This is a debit balance (interoffice) account maintained for the VA Education Loan Fund to show the amount of loan defaults and loan balances transferred to other stations.
STATION ENTRIES
Debits: Credits:
a. Principal balances of loan Net cumulative debit balance
defaults transferred to other closed at end of fiscal year.
stations. Contra to 2241.
Contra to 1217.8. .
b. Principal balances of loans .
transferred to other stations. .
Contra to 1145.8 ..
6145 LOAN DEFAULTS AND LOAN RECEIVABLES TRANSFERRED FROM OTHER STATIONS
This is a credit balance (interoffice) account maintained for the VA Education Loan Fund to show the amount of loan defaults and loan balances transferred from other stations.
STATION ENTRIES
Debits: Credits:
Net cumulative credit balance a. Principal balances of loan
closed at end of fiscal year. defaults transferred from other
Contra to 2241. stations.
. Contra to 1217.8.
. b. Principal balances of loans
. transferred from other
. stations.
. Contra to 1145.8.
6312 ALLOWANCE ISSUED OR RECEIVED
This is a debit balance (interoffice) account showing the distribution of allowances.
STATION ENTRIES
Debits: Credits:
Record allowance received. a. Record allowance withdrawn.
Contra to 5227 Contra to 5227.
. b. Balance closed at end of
. fiscal year.
. Contra to 2241
7101 UNCOLLECTIBLE LOAN DEFAULTS
This is a debit balance (statistical) account maintained for the VA Education Loan Fund to show the amount of uncollectible loan defaults reported to GAO.
STATION ENTRIES
Debits: Credits:
Uncollectible checks a. Collections (includes benefit
applicable to loan defaults deductions) applicable to loan
written off as uncollectible. defaults written off as
Contra to 7102. uncollectible.
. Contra to 7102.
. b. Notice from GAO (GAO Form
C92) that collections have
. been made for uncollectible
. loan defaults.
. Contra to 7102.
7102 UNCOLLECTIBLE LOAN DEFAULTS REPORTED TO GAO
This is a credit balance (statistical) account maintained for the VA Education Loan Fund to show the amount of uncollectible loan defaults which have been reported to GAO.
STATION ENTRIES
Debits: Credits:
a. Collections (includes Uncollectible checks applicable
deductions from benefits) to loan defaults written off
applicable to loan defaults as uncollectible and reported
written off as uncollectible and to GAO.
reported to GAO. Contra to 7101.
Contra to 7101. .
b. Notice from GAO (GAO Form .
C92) that collections have .
been made for uncollectible .
loan defaults. .
Contra to 7101. .
PRO FORMA ENTRIES
1. Disbursing Authority Received-$50,000:
Dr. 1012 $50,000
Dr. 6312 $50,000
Cr. 5227 $50,000
Cr. 6032 $50,000
2. $600 Loan Made-Deduct Fees of $18:
a Dr. 1145.2 $600
Cr. 1012 $582
Cr. 3381 $18
b Dr. 1023 $18
Cr. 1012 $18
c Dr. 5227 $600
Cr. 5229 $600
3. $600 Loan Made-Fees Paid in Advance $18:
a. Dr. 1023 $18
Cr. 3381 $18
b. Dr. 1145.2 $600
Dr. 5227 $600
Cr. 1012 $600
Cr. 5229 $600
4. Cash Collection of Loan-(Apply to Interest First and any Remaining Balance to Principal.):
Loan Bal. $600 Interest $ 20 Total Payment $620
Dr. 1023 $620 Cr. 1145.3 $600 Cr. 3224 $ 20
5. $600 Loan Default:
Dr. 1217.2 $600 Cr. 1145.5 $600
6. Loan Written Off Because of Death or Disability-CFY ($600 Principal Balance):
Dr. 1240.1 $600 Cr. 1145.6 $600
7. Writeoff of Principal Amount of Loan Default Due to Bankruptcy ($600 Principal Balance):
Cr. 1217.7 $600 Dr. 1240.2 $600
8. Benefit Deduction-Receivables Previously Written Off as Uncollectible ($600 + $100 Interest):
Dr. 1023 $700 Cr. 1240.2 $600 Cr. 3224 $100
9. Canceled Check, Current Fiscal Year (Loan Principal $600, Fees $18, Net Amount for Check $582.):
Dr.1012 $600 Dr.3381 $18 Dr.5229 $600 Cr.1023 $18 Cr.1145.2 $600 Cr.5227 $600
10. Canceled Check, Prior Fiscal Year (Facts same as in number 9 above.):
Dr. 3381 $ 18 Dr. 1023 $582 Cr. 1145.9 $600
1l. Cash Collections Applicable to Receivables Previously Written Off ($600 Principal Plus $100 Interest):
Dr. 1023 $700 Cr. 3224 $100 Cr. 1240.2 $600
12. Provision for Losses of Loan Account Receivables:
1145.1 Opening Balance-CFY + 350,000
1145.2 Loans Disbursed-CFY + -0-
1145.3 Cash Collections-CFY - ( 30,000)
1145.4 Benefit Deductions-CFY - ( 1,000)
1145.5 Loan Default-CFY - ( 40,000)
1145.6 W/O Death or . .
. Disability-CFY - ( 500)
1145.7 W/O Bankruptcy-CFY - ( 500)
1145.8 Transfers In/Out-CFY +/- ( 100)
1145.9 Adjustments-PFY +/- ( 500)
1145.10 W/O Administrative-CFY - -0-
. TOTAL . $277,400
. Reserve Factor . .003%
. Reserve Amount . $ 832
Dr. $832 4222.1 Cr. $832 1240.1
To record the provision for losses and allowance for losses. However, if the allowance is adequate for the CFY then no adjustment is necessary. Adjustments may be made during the fiscal year, but should be avoided, if possible.
13. Provision for Losses of Accounts Receivable:
1217.1 Open Balance-CFY + 800,000
1217.2 Receivables-CFY + 53,500
1217.3 Cash Collections-CFY - (40,000)
1217.4 Benefit Deductions-CFY - (16,000)
1217.5 Compromise-CFY - ( 800)
1217.6 W/O Death or . .
. Disability-CFY - ( 2,000)
1217.7 W/O Bankruptcy-CFY - ( 15,000)
1217.8 Transfers In/Out +/- ( 100)
1217.11 Adjustments PFY +/- ( 500)
1217.12 W/O Administrative-CFY - ( 700)
. TOTAL . $778,400
. Reserve Factor . 25%
. Reserve Amount . $194,600
Dr. 4222.2 $194,600 Cr. 1240.2 $194,600
To record the provision for losses and allowance for losses. However, if the allowance is adequate for the CFY then no adjustment is necessary. Adjustments may be made during the fiscal year, but should be avoided, if possible.
l4. Closing Entries End of Fiscal Year:
a. Close 1145.2 through 1145.10 into 1145.1.
b. Close 1217.2 through 1217.12 into 1217.1.
c. Close 1012, 1023, 3224, 3381, 4222.1, 4222.2, 5227, 5229, 6032, 6135, 6145, and 6312 into 2241.
FORMULAS FOR TRIAL BALANCE VERIFICATION
The following formulas has been developed to standardize the trial balance verification process and will be calculated monthly prior to release of the trial balance. When an out of balance occurs it should be corrected immediately. Corrections to the trial balance can be made by calling Central Office (047B1) on FTS 3893600.
1. Allowance Account Formula. GL accounts 5227 and 5229 (credit balance) equals GL account 6312 (debit balance).
2. Loans Disbursed and Expended Allowance Formula. GL account 1145.2 (debit balance) equals GL account 5229 (credit balance).
3. Source and Application of Funds Formula. GL accounts 1012 and 1145.2 (debit balance) equals GL accounts 2038 and 6032 (credit balance).
4. Disbursing Authority Formula. GL account 1012 (debit balance) equals GL accounts 2038 and 5227 (credit balance).
5. Provision for Loss and Allowance for Loss Formula. GL accounts 4222.1 and 4222.2 (debit balance) equals GL accounts 1240.1, 1240.2, 1145.6, 1145.7, 1145.10, 1217.5, 1217.6, 1217.7, and 1217.12 less beginning balance for CFY in 1240.1 and 1240.2.
6. Uncollectible Loan Defaults. GL account 7101 (debit balance) equals GL accounts 7102 (credit balance).
7. Loan/Receivable Transfers Formula. GL accounts 1145.8, 1217.8, 6135, and 6145 net balance equals zero.
8. Reimbursements and Income Accounts Formula. GL accounts 1023 and 1036 (debit balance) equals GL accounts 1145.3, 1145.4, 1145.9, 1217.3, 1217.4, 1217.11, 3224, 3381, 4222.3, and 4222.4 (credit balance).
9. Loan Default Formula. GL account 1145.5 (credit balance) equals GL account 1217.2 (debit balance).
10. Fee Formula. GL account 1145.2 times 3 percent should equal GL account 3381.
11. Miscellaneous Source and Application of Funds Formula. GL accounts 1027.1, 1027.2, 1027.3 and 1027.4 equals 2013.1, 2013.2, 2013.3, and 2013.4.