New Accounting System and Its Features

The new accounting system is the present accounting system of government of Nepal which keeps the systematic record of all revenues and expenditures of the government offices performed through the bank. It is the systematic and scientific system for recording all the revenue and expenditures of government offices. It was implemented since 2019/20 in phase wise basis. This system emphasizes on banking transactions. It is based on double entry system, which keeps the record, according to budget heads in prescribed forms. This is simple to understand and easy to operate. It maintains uniformity in recording and reporting financial transactions of the government.

Features of New Accounting System

The new accounting system has been implemented in Nepal to overcome the drawbacks of payment of accounting system. The main features of new accounting system are as follows:

1. Based on double entry concept
   The new accounting system is based on the principle of the double-entry system of accounting. It records the every financial transaction of the government office by showing double effect i.e. debit and credit. Thus, it is called ern and scientific system of accounting.
   
   
2. Emphasis on banking transactions

   

   
   Under new accounting system, all the government revenue and expenditures are performed through the bank. Every government office should deposit all its revenues into the bank and make expenditures through cheque. It helps to prevent the misuse of cash in government offices.
   
   
3. Based on budget heads
   The new accounting system has the provision of various budget heads for keeping records of the transaction. The transactions are recorded according to their budget and subheads. It helps to maintain the effective control over the budget.
   
   
4. Use of bracket

   

   
   The bracket is used to show the amount to be credited. This is used especially while recording the clearance of advance in bank cash book and budget sheet.
   
   
5. Inter-head transfer of budget
   Budget is allocated under the different heads of expenditures by central level offices. Sometimes, one budget head may have the surplus and another budget head may have an insufficient amount. In such condition, the amount can be transferred from the budget head having the surplus budget to the budget head lacking the required amount.
   
   
6. Simplicity and uniformity
   The new accounting system is a simple and uniform type of accounting system. It follows same forms, formats and procedures for recording, classifying and reporting the financial transactions. It is used and followed by all the government offices throughout the country. Thus, it is considered as simple and uniform accounting system for maintaining the record of the financial transaction.
   
   
7. Based on cash transaction
   New accounting system performs the transactions only on a cash basis. It does not keep the record of credit transactions. It keeps the record of the transaction at the time of cash receipts and payments not at the time of receiving goods or services. Due to this feature, the amount of advance given is also recorded by assuming it as expenditure until its clearance.
   
   
8. Use of prescribed forms
   The new accounting system uses different accounting forms for keeping the record. Such forms are designed and prescribed by the office of the auditor general and implemented by all government offices. All the government offices are legally liable for using such forms and formats. Some of the forms under this system are journal voucher (AGF no.10), bank cash book (AGF no. 5) and budget sheet (AGF no. 8) etc.