Structure of Government Accounts
May 13, 2012 at 3:33 pm #67477
I am to post here important Q&A for the departmental examination ahead.May 16, 2012 at 1:32 am #72567
please carry on. it will be helpful.May 16, 2012 at 3:51 pm #72576
What are the main divisions of the Govt. Accounts?
There are three parts —
(i) Consolidated Fund
(ii) Contingency Fund
(iii) Public Accounts
Consolidated Fund: There are separate funds for the Union and the States i.e. Consolidated Fund of the Union / Consolidated fund of the State.
(i) Revenue Receipt and Disbursement
(ii) Capital Receipt and Disbursement: Capital expenditure is made mainly out of borrowed or accumulated fund with the object either of increasing concrete assets of a material and permanent character or of reducing recurring liabilities.
(iii) Public Debt, Loans and Advance: The loans raised by the Govt, by issue of Treasury Bills, Loans or Ways and Means Advances and moneys received by the Govt, in repayment of loans are credited and from which the expenditure of the State is met when authorised by legislature.
Contingency Fund: There is a-fund under the disposal of the President of India / the Governor of a State. The said fund is called the Contingency Fund. Government takes advances from the said fund for the purpose of meeting the unforeseen expenditure pending authorisation of the Parliament / the State Legislature. The said advance is replenished within the financial year subject to approval of the Legislature. The expenditure made out of this fund is finally charged to the Consolidated Fund.
Public Account: The Public money received by the Government other than those credited to the Consolidated Fund is credited to the Public Accounts and from which disbursement may be made (out of the said fund) as per prescribed rules. All transactions regarding Debt, Deposit, Remittance and Suspense are made through this Accounts.May 16, 2012 at 5:20 pm #72577
What are the main unit and basis of the classification and codification in accounts?
The broad principles of classification of the Govt. Accounts are given below:
As a general rule, the classification of transactions in Govt. Accounts shall have closer reference to functions, programmes and activities of the Govt. Accounts as under:
(a) Major Head Functions of the Govt. (4 digits codes) (b) Sub-Major Head
(Sector and Sub-Sector)
Grouping of various functions of the Govt. (2 digits codes)
(i) General Service
(ii) Social and Community Service
(iii) Economic Service
(c) Minor Head Programmes under each function.
(3 digits codes)
(i) Plan Status
(ii) Name of Scheme.
Scheme, activities of organisations under each programme. (e) Detailed Head Object and nature of the expenditure
The main units of classification in accounts are given below:
Major Head of accounts falling within the Consolidated fund shall generally correspond to “Function of Govt.” such as different services like agriculture, education etc. Sometimes major Heads may be divided into Sub-Major Heads for the purpose of “Various Functions of the Govt.” [Major Head — 4 digits codes, Sub- Major Head — 2 digits codes.]
Major Head of Account is divided into Minor Head for the purpose “Programme Undertaken under each function” represented by Major Head. [Minor Head – 3 digits codes.]
A programme may consist of a number of schemes or activities and these shall generally correspond to Sub-Head below the Minor Head represented by the programme.
For the purpose of item-Wise control over expenditure and indicate the “Object and nature of expenditure” on a scheme out of Consolidated fund in terms as object of classification as detailed head viz. Salaries, Office Expense, Grant-in- Aid etc.
There is some exception as may be authorised specially in any individual case viz. Receipt representing interest shown under the head “0049-Interest Receipts” and maintenance of repair of non-residential buildings of P.W.D. under the head “2059-Public Works Deptt.”
For the purpose of computer based financial system 9 digit codification pattern have been introduced earlier. In the year 1999, the West Bengal Govt. has introduced 17/19 digit codes for expenditure and 14 digits codes for receipts in consultations with A.G. West Bengal for the purpose of computer based financial system.
Particulars of Expenditure are given below:
SI. No. Head Particulars Codification 1 Major Head Functions of the Govt 4 Digits 2 Sub-Major Head Grouping of various functions of the Government 2 Digits 3 Minor Head Programme under each Functions 3 Digits 4 Sub-Head Scheme Activities of organi-sations under each programme (i) Plan Status -do- 2 Abbreviated codes (ii) Name of scheme -do- 3 Digits 5 Charged or Voted (C/V) 1 Abbreviated code 6 Detailed Head Object and nature of Expenditure 2 Digits 7 Sub-Detailed Head -do- 2 Digits Total 19 Digits Range of Code Numbers Major Heads (a) Consolidated Fund (i) Revenue Receipt 0001 to 1999 (ii) Revenue Expenditure 2000 to 3999 (iii) Capital receipt and disbursement 4000 to 5999 (iv) Public debt Loan & Advance 6000 to 7999 (b) Contingency Fund 8000 (c) Public Accounts 8001 to 8999September 3, 2012 at 12:21 pm #73949
What are the criteria for the determining whether the expenditure should be classified under the head of the Capital Section or the Revenue Section. Cite three examples.
Capital Expenditure means the expenditure incurred with the object either of increasing concrete assets of a material and permanent character or of reducing recurring liabilities.
(a) Expenditure on a temporary asset cannot ordinarily be classified as capital expenditure, if not specifically authorised by the Govt. on the advice of CAG.
(b) Expenditure on Grant-in-aid to local bodies for the purpose of creating the assets cannot ordinarily be classified as capital expenditure if not specifically authorised by the Govt. on the advice of CAG.
(c) Expenditure of a Capital nature shall be distinguished from Revenue expenditure both in budget estimates and in Govt. account.
(d) Capital expenditure is generally met from borrowed money. The said expenditure may be made from revenue provided there are sufficient revenue resource. The matter will be decided by the Govt.
(e) Expenditure of Capital nature shall not be classed as Capital expenditure in the Govt. accounts unless the classification has been expressly authorised by general or special orders of the Govt.
(a) Building, Bridge, Road.
(b) Maintenance charges before open for service.
(c) Expenditure for additions and improvement before open for service.
(a) Maintenance charges after open for service.
(b) Grant-in-aid paid to local bodies.
(c) Temporary assets.September 27, 2012 at 10:19 am #74526
How is allocation between Capital and Revenue expenditure on a Capital Scheme determined?
Allocation between capital and revenue expenditure on a Capital Scheme for which separate Capital account and Revenue account should he kept as per advice of the C.A.G. The main principles are given below in this regard:
(a) Capital Account
(i) All charges for the first construction and equipments of the Project.
(ii) Intermediate maintenance of work before open for service.
(iii) Further additions and improvements as may be sanctioned by the competent authority.
(b) Revenue Account
(i) All subsequent charges for maintenance and all working expenses.
(ii) All expenditure on the working and upkeep of the project and also renewal and replacement including addition and alteration, improvement and extension of the project as prescribed by the govt.
(iii) In case of works of renewal and replacement which partake both of a Capital or Revenue nature, the allocation of expenditure should be regulated by the broad principle that revenue should pay or provide a fund for replacement of all wastage or depreciation of property originally provided out of capital grants. The same may be made out of Capital Account or Revenue Account as per decision of the Govt.
(iv) Expenditure for repairs of damage caused by natural calamities such as flood, earthquake, fire etc. may be made out of Capital Account or Revenue Account or divided between them as decided by the Govt, according to the circumstances of each case.
(v) Capital Receipt, if any, should not be deposited to Revenue Receipt account. The same should be deposited to the Capital head as reduction of capital expenditure.September 27, 2012 at 10:24 am #74527
How is the classification of the expenditure as charged or as voted determined?
Both the expenditure are made out of Consolidated Fund. Accounts of charged expenditure and voted expenditure are to be kept in the separate concerned heads so that the said two categories of the expenditure may be distinguished properly.September 27, 2012 at 10:27 am #74528
What are the principles, purpose and method of the Government Accounting?
Principles of the Government Accounting
The activities of a good Government are determined by the needs of the country. It is a matter of the decision for the Government as to what expenditure will be necessary during the year in carrying out these activities. After a decision has been reached on the above points the Government will decide how to collect money to meet that expenditure. The classification of transactions in the Government Accounts is required as under:
(i) Administrative classification of the activities;
(ii) The classification regarding the nature of transactions.
The immediate object of the Government Accounting is not to ascertain the profit and loss on the transactions as a whole in carrying out its activities. On the basis of the budget and accounts Government determines (i) whether it will be justified in curtailing or expanding its activities, (ii) whether the rate of tax will increase or decrease.
Purpose of Government Accounts
Government Accounts are prepared in such a way as to enable the Government to determine how little money may be collected from the tax-payers in order to fulfill its necessary activities at the proper standard of efficiency.
Method of Government Accounting
Government Accounts are kept mainly on the Single Entry System. A portion of the Government Accounts is kept on the Double Entry System, the main purpose of which is to bring out the Balance of the Accounts in regard to which the Government acts as a banker or remitter or borrower or lender.
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