Note on Classification of Government Accounting

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INTRODUCTION TO GOVERNMENT ACCOUNTING

Government accounting is the process of recording, analyzing, classifying, summarizing, interpreting and communicating the financial transactions of the Government and in detai reflecting those transactions. In other words, government accounting is the accounting system that is used by the government offices to record and report their financial transactions. Government accounting is done for maintaining the proper records of the financial transactions of the government by the government offices which helps them to make suitable decision in making and formulating policies and also in allocation of budget in different sectors.

Under new accounting system, government accounting has been classified int two levels of accounting. They are as follows:

1. Central Level Accounting

Central level accounting refers to the accounting system which is maintained in central level government offices. The Central level Government refers to the constitutional body, ministry, secretarial office, commission and department office. Central level accounting is concerned with recording the budget received from the Ministry of Finance and releasing it to its under operating level offices. The following are the major accounting documents which are used in central level offices:

  • Journal Voucher
  • Ledger
  • Bank Statement
  • Statement of advance given

2. Operating Level Accounting

The accounting system which is maintained by operating government offices is known as operating level accounting. The operating government offices refer to the government offices which work in the regional or district level offices and receive the budget from concerned central level office and working under the concerned level office i.e. regional offices, zonal offices, district offices, district level offices, etc. The operating level accounting keeps the record of the budget amount received from central level office and spends it in development work and administrative works. The following are the major documents which are used in operating level offices to keep record of financial transactions that take place:

  • Journal Voucher
  • Bank Cash Book
  • Budget sheet
  • Monthlyadvance expenditure report
  • Statement of Expenditure

Difference between Central level accounting and Operating level accounting

Basis of difference

Central level accounting

Operating level accounting

User

It is used by the central level office.

It is used by operating level office.

Recording

It records budget amount received from the ministry of finance and release it to operating level office.

It records budget amount received from concerned central level office and spending of it.

Reporting

It makes reporting information to the ministry of finance.

It makes reporting information to the central level office.

Forms

A few numbers of the form are used in it.

Large numbers of forms are used in it.

Objective

It is the main objective is to control the budget.

It is the main objective is to the executive of the budget.

Scope

It includes the operating level accounting.

It does not include central level accounting.

Forms used in New Accounting System

Primary forms

  1. Cash payment slip (A.G.F. No.6)
  2. Journal Voucher (A.G.F. No.10)
  3. Cash receipt (A.G.F. No.11)

Accounts or ledger

  1. Bank Cash Book (A.G.F. No.5)
  2. Budget Sheet (A.G.F. No.8)
  3. Ledger Accounts (A.G.F. No.22)
  4. Cash receipt book (A.G.F. No.23)
  5. Budget summary and expenditure control account (A.G.F. No.24)

Forms for Reports

  1. Requisition form for the reimbursement of cash payment (A.G.F. No.6 Ka)
  2. Monthly report regarding revenue (A.G.F. No.9)
  3. Statement of expenditure (A.G.F. No.13)
  4. Monthly report of un-cleared advance (A.G.F. No.14)
  5. Statement of bank account (A.G.F. No.15)
  6. Summary of position of Fund (A.G.F. No.16)
  7. Statement of budget sheet (A.G.F. No.17)
  8. Statement of outstanding payments (A.G.F. No.18)
  9. Monthly report of security deposit (A.G.F. No.19)
  10. Statement of monthly reports (A.F.G. No.25)

Miscellaneous Forms

  1. Cash payment slip and cash receipts control (A.F.G. No.7)
  2. Inquiry letter (A.G.F. No.12)
  3. Statement of annual programme (A.G.F. No.20)
  4. Requisition form for four-monthly release (A.G.F. No.21)


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

Central level accounting:

  1. Central level accounting refers to the accounting system which is maintained in central level government offices. 
  2. Central level accounting records budget amount received from the ministry of finance and release it to operating level office. 

Operating level accounting:

  1. The accounting system which is maintained by operating government offices is known as operating level accounting. 
  2. It records budget amount received from concerned central level office and spending of it. 

Forms used in New Accounting System of Government in Nepal:

  1. Primary forms
  2. Accounts or ledger
  3. Forms for Reports
  4. Miscellaneous Forms

 

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