Note on Accounting system used in Nepal

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Source: SlideShare
Source: SlideShare

Accounting System used in Nepal

The main accounting system followed by the Government of Nepal before the introduction of present new accounting system were as follows:

  1. Wasil Baki Sreshta Pranali
  2. Syaha Sreshta Pranali
  3. FaamSreshta Pranali
  4. Bhuktani Sreshta Pranali (Payment Accounting System)

Wasil Baki Sreshta Pranali

The offices who perform the jobs of temporary nature having only the limited number of transactions uses this accounting system. Under this system, the revenues were recorded on one side of the page and expenditure on the other side. It is proved to be unscientific and impracticable for the modern period because it does not have a provision of classifying the revenues or expenditures into different heads for ready reference.

Syaha Sreshta Pranali

This system was introduced by Kharidar Gunawanta in 1936 B.S. In this accounting system, the revenues and expenditures are recorded separately on the same leaf and their total balances can be shown on the same leaf when required. Under this system, the following three types of books were used:

  • Syaha: Syaha was the book of original entry like the journal. It was prepared in Nepali Kagaz in 'T' shape and every transaction of government offices were first recorded in it. The Syaha was classified into Nagadi Syaha, Jinsi Syaha and Dharauti Syaha.
    i. Nagadi Syaha:Nagadi syaha was used to keep the record of cash transaction i.e. cash receipt and payment.
    ii. Jinsi Syaha: Jinsi Syaha was used to keep the record of property transaction i.e. furniture, rack, etc.
    iii. Dharauti Syaha: Dharauti Syaha was used to keep the record of deposit transaction.

  • Awarje: Awarje was the second step of keeping the record. It was a kind of ledger and prepared with the help of transactions recorded in Syaha to find out the incomes and expenditures under different heads of accounts. Awarje was of two types: (i) Income awarje- for recording government revenues and (ii) Vinjalik awarje- for recording and classifying expenditures.

  • Dhapot:Dhapot was the final statement of transactions of an office. It was the summarized statement to be prepared to show the financial position of a government office for the particular fiscal year. It was classified into three types: job termination Dhapot, month termination Dhapot and year termination Dhapot.

Faram Sreshta Pranali

Under this Pranali, a large number of forms were used to record the repetitive transactions. Therefore this pranali was called a Form Sreshta Pranali. There were all about 51 different forms in use, among them monthly cash statement, statement of land tax, Daily cash book, Monthly payroll, etc. were common forms.

Bhuktani Sreshta Pranali

This system was based on the principles of double entry system. The division of offices into central and operating levels, financial control through audit, the concept of decentralization, lapsing or freezing of all budget amounts and depositing all lapsed amounts into the consolidated fund are the notable characteristics of this system of accounting. This accounting system was replaced by government New Accounting System in the year 2018 B.S.

DIFFERENCES BETWEEN GOVERNMENT AND COMMERCIAL ACCOUNTING

Basis of difference

Government Accounting

Commercial Accounting

Use

This system is used to record transactions in government and semi-government organizations.

This system is used to record transactions in commercial organizations.

Objectives

It is maintained by the government offices to know the public fund position.

It is maintained by the commercial organization to know the profit or loss and financial position of the business.

Basis

This accounting is maintained on the cash basis.

This accounting is maintained on cash as well as the accrual basis.

Classification of accounting

It has the system of the central level and operating level accounting.

It has no provision of the central level and operating level accounting.

Control

It is fully directed and controlled with the help of budget approved by the parliament.

It is not affected by any types of formal budget. It is controlled by the management as per need.

Financial rules and acts

It must be maintained by the financial rules and regulations prescribed by the government.

It is not affected by the government rules and regulations but maintained by the internal rules of the firm.

Auditing

It is audited by the constitutional body constituted by the government.

It is audited by the professionals having valid audit license.

Funds

Under this system, separate bank account are opened for the operation of funds raised by the government for different purposes.

Under this system, separate bank accounts are not operated for the operation of funds. All the funds are operated through only one bank account.



References:

Sharma, Narendra et.al., Principles of Accounting-XI, Bundipuran Prakashan, Kathmandu

Koirala, Yadav Raj et.al., Principles of Accounting-XI, Asmita Books Publication, Kathmandu

Shrestha, Dasharaha et.al., Accountancy-XI, M.K. Prakashan Kathmandu

  1. Government accounting system is used to record transactions in government and semi-government organizations.
  2. Commercial accounting system is used to record transactions in commercial organizations.
  3. Syaha was the book of original entry like the journal. 
  4. Nagadi syaha was used to keep the record of cash transaction i.e. cash receipt and payment.
  5. Jinsi Syaha was used to keep the record of property transaction i.e. furniture, rack etc.
  6. Dharauti Syaha was used to keep the record of deposit transaction.

 

 

 

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