Note on Procedures of Preparation and Closing of Budget Sheet

  • Note
  • Things to remember
  • Exercise
  • Quiz

Procedures of Preparing Budget Sheet

The procedures of preparing budget sheet are as follows: -

  1. Recording annual appropriation: In the first part of the budget sheet, the amount of approved annual budget in different heads and subheads are recorded. It also records the amount of inter heads transfer. It shows the maximum limitation of the budget beyond which the expenditure cannot be made.

  2. Recording budget release: In the second part of the budget sheet, the amount released by the central level office is recorded. It records the amount of budget release, imprest fund release and additional imprest fund release. The budget release is recorded in the concerned heads and subheads, but the amount of imprest fund is recorded on the total column only.

  3. Recording budget expenditure: In the last part of the budget sheet, the amount of budget expenditure on different budget heads and subheads are recorded. It also records the advance transactions. The transactions, which do not affect the budget expenditures, are not recorded in this section.

Closing of Budget Sheet

The budget sheet is closed monthly as well as annually. It is closed to report about the budget release and expenditure till the date.

  • Monthly Closing
    At the end of month, the budget that is closed is known as monthly closing. Monthly closing of budget sheet included between the closing of expenditure and budget releases. Under this at first, the total of budget expenditure is found to calculate the expenditure of current month. Then, the total expenditure of current month is added to total expenditure up to the last month to know the amount of total expenditure up to the current month.

  • Yearly Closing
    At the end of the year. the budget that is closed is known as yearly closing. It contains the total amount of budget expenditure and the total amount of budget release. In the amount closing budget, the total amount of budget expenditure is deducted from the total amount of total budget release to find about the surplus amount if any.

Differences between Budget Sheet and Bank Cash Book

The main differences between budget sheet and bank cashbook are as follows:

Budget sheet

Bank cash book

1. It is a budgetary statement to be prepared by operating level government offices.

1. It is a subsidiary ledger to be prepared by operating level government offices.

2. It is prepared to maintain effective control over the budget.

2. It is prepared to maintain the record of cash & banking transactions.

3. It provides information about the annual appropriation of the budget, budget release and budget expenditures.

3. It provides information about cash & bank balance, expenditure, advance & miscellaneous transactions.

4. It is prepared under AGF No. 8

4. It is prepared under AGF No. 5

5. It is based on single entry system of the accounting system.

5. It is based on double entry system of accounting.

  • A budget sheet is prepared on the basis of journal voucher. 
  • A budget sheet is prepared by recording the transactions in its related parts.
  • In the first part of the budget sheet, the amount of approved annual budget in different heads and subheads are recorded. 
  • In the second part of the budget sheet, the amount released by central level office is recorded.
  • The budget sheet is closed monthly as well as annually. It is closed to report about the budget release and expenditure till the date.
  • The process of obtaining the total budget release and expenditures up to the month is called monthly closing. 
  • The budget sheet is closed at the end of each fiscal year, which is known as yearly closing. 
.

Very Short Questions

A budget sheet is prepared on the basis of journal voucher. It is prepared by recording the transactions in its related parts. The procedures of preparing budget sheet are as follows: -

  1. Recording annual appropriation
    In the first part of the budget sheet, the amount of approved annual budget in different heads and subheads are recorded. It also records the amount of inter heads transfer. It shows the maximum limitation of the budget beyond which the expenditure cannot be made.

  2. Recording budget release
    In the second part of the budget sheet, the amount released by central level office is recorded. It records the amount of budget release, imprest fund release and additional imprest fund release. The budget release is recorded in the concerned heads and subheads, but the amount of imprest fund is recorded on the total column only.

  3. Recording budget expenditure
    In the last part of the budget sheet, the amount of budget expenditure on different budget heads and subheads are recorded. It also records the advance transactions. The transactions, which do not affect the budget expenditures, are not recorded in this section.

The budget sheet is closed monthly as well as annually. It is closed to report about the budget release and expenditure till the date.

  • Monthly Closing
    Al the end of each month, the budget sheet is closed. The process of obtaining the total budget release and expenditures up to the month is called monthly closing. The monthly closing determines the amount of total budget release and total budget expenditures of the month as well as up to the month. In order to close the budget sheet, firstly the total of the month is obtained. Finally, the total up to the previous month is added to the total of the month to obtain the total release and expenditures up to the month.

  • Yearly Closing
    The budget sheet is closed at the end of each fiscal year, which is known as yearly closing. It closes the total amount of budget expenditures and a total amount of budget release. Yearly closing is the process of equalizing the total budget release with the total budget expenditures during the fiscal year. The yearly closing is made by preparing closing voucher.

The main differences between budget sheet and bank cash book are as follows:

Budget sheet

Bank cash book

1. It is a budgetary statement to be prepared by operating level government offices.

1. It is a subsidiary ledger to be prepared by operating level government offices.

2. It is prepared to maintain effective control over the budget.

2. It is prepared to maintain the record of cash & banking transactions.

3. It provides information about annual appropriation of budget, budget release and budget expenditures.

3. It provides information about cash & bank balance, expenditure, advance & miscellaneous transactions.

4. It is prepared under AGF No. 8

4. It is prepared under AGF No. 5

5. It is based on single entry system of an accounting system.

5. It is based on double entry system of accounting.

0%
  • A budget sheet is prepared on the basis of ______.

    final account
    journal voucher
    bank cash book
    petty cash book
  • The transactions, which do not affect the budget expenditures, are not recorded in ______.

    annual appropriation part
    budget release part
    balance of budget
    budget expenditure part
  • The second part of the budget sheet records the amount of ______.

    budget release


    all the options are correct


    imprest fund release


    additional imprest fund release


  • The budget sheet is closed at the end of each fiscal year, which is known as ______.

    daily closing
    monthly closing
    weekly closing
    yearly closing
  • The process of obtaining the total budget release and expenditures up to the month is called _______.

    weekly closing


    annual closing


    yearly closing


    monthly closing


  • You scored /5


    Take test again

DISCUSSIONS ABOUT THIS NOTE

You must login to reply

Forum Time Replies Report


You must login to reply

sagar


You must login to reply