Preparation of Bank Cash Book

Bank cash book is a general ledger which is prepared on the basis of journal vouchers. The general rules for making debit and credit transaction must be followed while posting the transaction from journal voucher to bank cash book. The bank cash book is prepared by posting the transactions from the following journal vouchers:

Posting from the journal voucher for budget expenditure transactions

The journal voucher for budget expenditure is known as the journal voucher which is prepared to record the transactions relating to budget expenditure. It records the payment for budget expenditures like salaries, allowance, office expenses, telephone charges etc. The posting of budget expenditure n the bank cash book is made in the budget expenditure account and credit side of a bank account.

Example:

Issued a cheque of Rs. 50,000 for the purchase of machinery equipment.

	Journal voucher
Code No.	Particulars	LF	BH No.	Debit Rs.	Credit Rs.
	Dr. BE Machinery Equipment		29511	50,000
	Cr. Nepal Rastra Bank				50,000
	(Being machinery equipment purchased and payment made through cheque)

Note: Only main part of journal voucher is shown.

Posting from the journal voucher for advance transactions

Advance is an amount, which is given to official staff and other parties before receiving goods and services. It is given to perform a specific task. The advance transactions are posted in the bank cash book at the time of giving an advance and at the time of clearing advance.

1. At the time of giving advance
   While posting advance given transaction in the bank cash book, three accounts, namely Nepal Rastra Bank a/c, budget expenditure a/c and advance a/c are affected. The posting for advance given is made in the bank cash book in budget expenditure a/c, debit side of advance a/c and credit side of Nepal Rastra Bank a/c.
   Example:
   

   Advance given to Section Officer, Mrs. Ram Shrestha for the purchase of vehicle of Rs. 1,00,000.

   	Journal Voucher
   Code No.	Particulars	LF	BH No.		Debit Rs.		Credit Rs.
   	Dr. Section Officer, Mrs. Ram Shrestha				1,00,000
   	Advance for purchase of vehicle		29411
   	Cr. Nepal Rastra Bank						1,00,000
   	(Being advance given to SO Mrs. Sujata Raut for the purchase of vehicle)

   Note: Only main part of journal voucher is shown.

   Government of Nepal

   AGF No. 5

   .....Office/Dept./Ministry

   Bank Cash Book

   Date

   Ref No.

   Particulars

   Cash Balance

   Bank Balance

   Budget expenditure

   Advance

   Miscellaneous

   Remarks

   Dr.

   Cr.

   Dr.

   Cr.

   Ch No.

   Blc

   Bh No.

   Amt

   Given

   Cleared

   A/c No.

   Dr.

   Cr.

   Advance given to Mrs. Ram Shrestha for the purchase of vehicle

   -

   -

   -

   1,00,000

   -

   -

   29411

   1,00,000

   1,00,000

   -

   -

   -

   -

   -

2. At the time of clearing advance
   The amount of advance, which is given to performing the specific task, should be cleared after its completion. The amount of expenditure may be equal to the advance, less than the advance or more than the advance amount.
   
   • When the amount of expenditure is equal to the advance
     When the expenditure equals to the advance amount, the transaction affects the credit (cleared) side of the advance account and budget expenditure account. Under budget expenditure account, the amount of actual expenditure is shown outside the bracket and the amount of advance cleared is shown inside the bracket.
     Example:
     

     Section Officer, Mrs. Ram Shrestha, submitted the bill of the vehicle for Rs. 1,00,000 and her advance was cleared.

     	Journal Voucher
     Code No.	Particulars	LF	BH No.	Debit Rs.	Credit Rs.
     	Dr. BE Vehicle		29411	1,00,000
     	Cr. Section Officer, Mrs. Ram Shrestha
     	Clearance of advance for vehicle				1,00,000
     	(Being advance for the purchase of vehicle has been cleared)

     Note: Only main part of journal voucher is shown.

     Government of Nepal

     AGF No. 5

     .....Office/Dept./Ministry

     Bank Cash Book

     Date

     Ref No.

     Particulars

     Cash Balance

     Bank Balance

     Budget expenditure

     Advance

     Miscellaneous

     Remarks

     Dr.

     Cr.

     Dr.

     Cr.

     Ch No.

     Blc

     Bh No.

     Amt

     Given

     Cleared

     A/c No.

     Dr.

     Cr.

     Advance for the purchase of vehicle cleared

     -

     -

     -

     -

     -

     -

     29411

     1,00,000 (1,00,000)

     -

     1,00,000

     -

     -

     -

     -

   • When the amount of expenditure is less than the amount of advance given
     If the expenditure is made less than the amount of advance given, the surplus amount is returned to clear the advance. When the expenditure is less than the amount of advance, the transaction affects credit side of the advance account, budget expenditure account and debit side of a bank account. Under budget expenditure account, the amount of actual expenditure is shown outside the bracket and the amount of advance cleared is shown inside the bracket.
     Example:
     

     Section Officer, Mrs. Ram Shrestha, submitted the bill of the vehicle of Rs. 60,000 and deposited Rs. 40,000 in the bank to clear the advance.

     	Journal Voucher
     Code No.	Particulars	LF	BH No.	Debit Rs.	Credit Rs.
     	Dr. BE Vehicle		29411	60,000
     	Dr. Nepal Rastra Bank			40,000
     	Cr. Section Officer, Mrs. Ram Shrestha				1,00,000
     	Clearance of advance for vehicle
     	(Being advance for the purchase of vehicle has been cleared)

     Note: Only main part of journal voucher is shown.

     Government of Nepal

     AGF No. 5

     .....Office/Dept./Ministry

     Bank Cash Book

     Date

     Ref No.

     Particulars

     Cash Balance

     Bank Balance

     Budget expenditure

     Advance

     Miscellaneous

     Remarks

     Dr.

     Cr.

     Dr.

     Cr.

     Ch No.

     Blc

     Bh No.

     Amt

     Given

     Cleared

     A/c No.

     Dr.

     Cr.

     Advance for the purchase of vehicle cleared

     -

     -

     40,000

     -

     -

     -

     29411

     60,000 (1,00,000)

     -

     1,00,000

     -

     -

     -

     -

   • When the amount of expenditure is more than advance given
     If the expenditure is more than the advance amount, the office should reimburse the excess amount of expenditure. When the expenditure is more than the amount of advance, the transaction affects credit side of the advance account, budget expenditure account and credit side of the bank account. Under budget expenditure account, the amount of actual expenditure is shown outside the bracket and the amount of advance cleared is shown inside the bracket.
     Example:
     

     Section Officer, Mrs. Ram Shrestha, submitted the bill of the vehicle of Rs. 1,20,000 and her advance was cleared by issuing a cheque for the excess amount of expenditure.

     	Journal Voucher
     Code No.	Particulars	LF	BH No.	Debit Rs.	Credit Rs.
     	Dr. BE Vehicle		29411	1,20,000
     	Cr. Section Officer, Mrs. Ram Shrestha				1,00,000
     	Clearance of advance for vehicle				20,000
     	Cr. Nepal Rastra Bank
     	(Being advance for the purchase of vehicle has been cleared)

     Note: Only main part of journal voucher is shown.

     Government of Nepal

     AGF No. 5

     .....Office/Dept./Ministry

     Bank Cash Book

     Date

     Ref No.

     Particulars

     Cash Balance

     Bank Balance

     Budget expenditure

     Advance

     Miscellaneous

     Remarks

     Dr.

     Cr.

     Dr.

     Cr.

     Ch No.

     Blc

     Bh No.

     Amt

     Given

     Cleared

     A/c No.

     Dr.

     Cr.

     Advance for the purchase of vehicle cleared

     -

     -

     -

     20,000

     -

     -

     29411

     1,20,000 (1,00,000)

     -

     1,00,000

     -

     -

     -

     -

     
     
     
   • When the whole amount of advance is returned
     When the expenditure is not made and the whole advance amount of advance is returned, the transaction affect the credit (cleared) side of the advance account, budget expenditure account and debit side of the bank account.
     Example:
     

     Section Officer, Mrs. Ram Shrestha, returned the whole amount of advance of vehicle Rs. 1,00,000 due to not the availability of furniture according to the sample.

     	Journal Voucher
     Code No.	Particulars	LF	BH No.	Debit Rs.	Credit Rs.
     	Dr. Nepal Rastra Bank			1,00,000
     	Cr. Section Officer, Mrs. Ram Shrestha				1,00,000
     	Clearance of advance for vehicle		29411
     	(Being advance for the purchase of vehicle has been cleared)

     Note: Only main part of journal voucher is shown.

     Government of Nepal

     AGF No. 5

     .....Office/Dept./Ministry

     Bank Cash Book

     Date

     Ref No.

     Particulars

     Cash Balance

     Bank Balance

     Budget expenditure

     Advance

     Miscellaneous

     Remarks

     Dr.

     Cr.

     Dr.

     Cr.

     Ch No.

     Blc

     Bh No.

     Amt

     Given

     Cleared

     A/c No.

     Dr.

     Cr.

     Advance for the purchase of vehicle cleared

     -

     -

     1,00,000

     -

     -

     -

     29411

     (1,00,000)

     -

     1,00,000

     -

     -

     -

     -

Posting from the journal voucher for miscellaneous transactions

The transactions other than budget expenditure and advance are called miscellaneous transactions. These transactions do not affect on budget expenditure. The following are some of the miscellaneous transactions: area dedicated

Imprest/ Revolving fund release

Imprest/ Revolving fund release is the modern system of budget release newly introduced by the government.According to this system, at the beginning of each fiscal year, the office of the treasury and comptroller creates a fund to release the budget for all operating level offices. Each operating level offices receives an amount equal to the 1/6^th of its last year's total budget expenditure at the beginning of each fiscal year as revolving or imprest fund release to spend on different heads of expenditure during the month of Shrawan. The transaction relating to imprest fund release affects Nepal Rastra Bank account and miscellaneous account. It is posted on the debit side of bank account and credit side of the miscellaneous account.
Example:

The District Police Office, Dolakha, received a bank order letter of Rs. 10,000 as initial revolving fund on Shrawan 7.

Note: Only main part of journal voucher is shown.

Budget release

Under present revised budget release system, each operating level office receives budget release order equals to the actual expenditure of the previous month. Hence, the budget release is based on the imprest system. For getting the budget release order, the operating level office should produce the necessary documents to District Treasury Control Office within the first week of each month. The following are the three conditions of budget release:

1. When the amount of budget release order and bank order is equal
   Example:
   

   District Education Office, Rautahat, received a bank order of Rs. 20,000 and budget release order of Rs. 20,000 on Marga 15 for the actual expenditure of Kartik.

   	Journal Voucher
   Code No.	Particulars	LF	BH No.	Debit Rs.	Credit Rs.
   	Dr. Nepal Rastra Bank			20,000
   	Cr. Budget Release				20,000
   	(Being budget release order and bank order received for the actual expenditure of Kartik)

   Note: Only main part of journal voucher is shown.

   Government of Nepal

   AGF No. 5

   District Education Office, Rautahat

   Bank Cash Book

   Date

   Ref No.

   Particulars

   Cash Balance

   Bank Balance

   Budget expenditure

   Advance

   Miscellaneous

   Remarks

   Dr.

   Cr.

   Dr.

   Cr.

   Ch No.

   Blc

   Bh No.

   Amt

   Given

   Cleared

   A/c No.

   Dr.

   Cr.

   Imprest fund released

   -

   -

   20,000

   -

   -

   -

   -

   -

   -

   -

   -

   -

   20,000

   -

2. When the amount of budget release order is less than the bank order
   Example:
   

   On 18^th of Magh, District Forest Office, Kathmandu, received a bank order of Rs. 60,000 and a budget release order for Rs. 40,000 for the actual expenditure of the last month.

   	Journal Voucher
   Code No.	Particulars	LF	BH No.	Debit Rs.	Credit Rs.
   	Dr. Nepal Rastra Bank			60,000
   	Cr. Revolving fund				20,000
   	Cr. Budget Release				40,000
   	(Being budget release order and bank order received for the actual expenditure of Falgun)

   Note: Only main part of journal voucher is shown.

   Government of Nepal

   AGF No. 5

   District Forest Office, Kathmandu

   Bank Cash Book

   Date

   Ref No.

   Particulars

   Cash Balance

   Bank Balance

   Budget expenditure

   Advance

   Miscellaneous

   Remarks

   Dr.

   Cr.

   Dr.

   Cr.

   Ch No.

   Blc

   Bh No.

   Amt

   Given

   Cleared

   A/c No.

   Dr.

   Cr.

   Budget release order received

   -

   -

   60,000

   -

   -

   -

   -

   -

   -

   -

   -

   -

   60,000

   -

3. When the amount of budget release order is more than the bank order
   Example:
   

   On 18^th of Falgun, District Irrigation Office, Lamjung, received a bank order for Rs. 50,000 and a budget release order for Rs. 70,000 for the actual expenditure of the last month.

   	Journal Voucher
   Code No.	Particulars	LF	BH No.	Debit Rs.	Credit Rs.
   	Dr. Nepal Rastra Bank			50,000
   	Dr. Revolving fund			20,000
   	Cr. Budget Release				70,000
   	(Being budget release order and bank order received for the actual expenditure of Falgun)

   Note: Only main part of journal voucher is shown.

   Government of Nepal

   AGF No. 5

   District Irrigation Office, Lamjung

   Bank Cash Book

   Date

   Ref No.

   Particulars

   Cash Blc

   Bank Balance

   Budget expenditure

   Advance

   Miscellaneous

   Remarks

   Dr.

   Cr.

   Dr.

   Cr.

   Ch No.

   Blc

   Bh No.

   Amt

   Given

   Cleared

   A/c No.

   Dr.

   Cr.

   Budget release order received

   -

   -

   50,000

   -

   -

   -

   -

   -

   -

   -

   -

   50,000

   70,000

   -

Distribution of salary and deductions made on it

Salary is distributed to the employees of government offices against the service rendered by them. The government determines the amount of salary of each level of employee. The salary is distributed after making a deduction of provident fund, income tax, provident fund loan and citizen investment trust. The deducted amount should be deposited in the concerned accounts. When the salary is distributed, it affects on the credit side of bank account, budget expenditure account and credit side of the miscellaneous account. Similarly, when the deductions are deposited in the concerned accounts, these affect on the credit side of bank account and debit side of the miscellaneous account in the bank cash book.
Example:

District Education Office, Rautahat, distributed the total salary for the month of Marga, amounting to Rs. 1,20,000 on 7^th Poush after deducting provident fund of Rs. 20,000, income tax of Rs. 15,000, provident fund loan of Rs. 10,000 and citizen investment fund of Rs. 5,000. The deductions were deposited in the concerned accounts on the same day.

Note: Only main part of journal voucher is shown

Note: Only main part of journal voucher is shown

Note: Only main part of journal voucher is shown

Note: Only main part of journal voucher is shown

Note: Only main part of journal voucher is shown

Petty cash fund

Petty cash fund is created in government offices for making the payment of a few expenditures. Such small amount of expenditures like postage, tea, newspapers, bus fare etc. should be paid frequently by an office. It is impracticable and inconvenient to pay such small amount of expenditures through a bank. So, to pay for such expenses, the government office establishes a fund, which is known as petty cash fund. The amount of petty cash fund depends upon the nature and volume of petty transactions. When the petty cash fund is established, it is shown in the credit side of bank account and debit side of the miscellaneous account of the bank cash book. Similarly, when the petty cash fund is reimbursed, it affects on the credit side of bank account and budget expenditure account of the bank cash book.
Example:

The District Education Office, Sindhuli created a petty cash fund of Rs 400 on 1^st Falgun. The petty cashier reported the following expenses on 23^rd Falgun for getting reimbursement.

Taxi fare Rs. 50

Wages Rs. 100

Postal stamp Rs. 30

Coke and Fanta Rs. 70

Newspapers Rs. 50

Note: Only main part of journal voucher is shown

Note: Only main part of journal voucher is shown