accounts. note :D Book Keeping Book Keeping Book keeping is the act of recording the business transaction on the systematic way in sets of books. Objectives and Function of Book keeping a. To identify the financial transaction. b. To keep record of financial transaction. c. To classify the financial transaction d. To prepare the financial statement. Meaning of Accounting Accounting the act of recording, classifying, summarizing and analyzing financial transaction in systematic manner in terms of monetary value and interpreting the result to the decision makers. Objectives or Accounting a. To record and maintain the financial transaction. b. To calculate result of operation. c. To ascertain the financial position. d. To communicate the information to users. Function of Accounting a. Record keeping function It is a primary function that includes recording, classifying and summarizing the financial transaction. b. Managerial function It helps in decision making process providing information. c. Legal Requirement function Auditing of account is legal requirement of every firm. It serves as a legal requirement. d. Business language function It helps to communicate the business information to different users. Scope of Accounting a. Scope for Business Organization It is required in business organization to find out result of business operation and financial position of organization. b. Scope for Non-Business Organization Here accounting is needed to find out their surplus (profit) and financial position. c. Government and Non-Government Organization It is needed in such organization to plan and control resources. d. Scope for Professionals and Individual Such person keeps accounting to calculate taxable income and surplus of their income. Limitation of Accounting a. It ignores qualitative aspects of business like labouries manpower, quality of output, etc. b. It cannot determine exact result as some calculations are done under estimation basis. c. It does not show real present realization values of business. d. Accountants may make various dressing statements. Process of Accounting a. Identifying the financial transaction. b. Recording the financial transaction. c. Classifying the recorded transaction. d. Summarizing the classified transaction. e. Preparing the financial transaction. f. Analyzing and interpreting the financial statement. g. Communicating financial information to users. Accounting Concept a. Business Entity Concept As per this concept a business is treated as a separate entity for accounting purpose. It states that the business and its owner are 2 different entities. Transactions of business have to be accounted for, from the view point of business. Business and its owner should be treated as separate bodies in order to ascertain the true picture of business. E.g.:- purchase of mobile for business and owner’s use should be recorded separately. b. Going Concern Concept This concept states that a business has indefinite life and it exists for a long period of time. E.g.:- the fixed assets are recorded in book of account that it will run for a long period of time. c. Money Measurement Concept This concept states that only those business transaction which are measured in monetary terms have to be recorded into account. Those transactions which are not measured in monetary value should not be recorded. E.g.:- Salary paid Rs.10000 should be recorded. d. Revenue Realization Concept This principle is mainly concerned with the revenue being recognized in the income statements of organization. Revenue is the inflow of cash in the course of sales of goods, rendering of services, etc. Revenue is recognized in the period which is earned irrespective of the fact whether it is received or not during that period. e. Cost Concept This concept states that the assets should be recorded at the cost of its purchase and not at its market value. E.g.:- suppose we have purchased vehicle for Rs 2lakh and its market price is Rs 3lakh, it should be recorded as Rs 2lakh in book. f. Matching Concept This concept states that the expenses for accounting period should be matched against related incomes while calculating profit and loss. Differences between Book Keeping and Accounting S.no Basis Book Keeping Accounting 1. Stage It is primary stage of keeping records. It starts at the end of book keeping. 2. Knowledge and Skills It requires lower and junior staff. It requires highly qualified senior staff. 3. Purpose It maintains records of financial transaction. It helps to find out result of operation and financial position of organization and communicate to the users. Accounting System 1. Single Entry Book Keeping System 2. Double Entry Book Keeping System Double Entry Book Keeping System It is the technique of recording financial transaction making double effect into 2 different accounts as ‘debit’ and ‘credit’. It is systematic, modern and keeps complete records of financial transaction. Features of Double Entry Book Keeping System 1. Every business transaction contains two sides: debit and credit. 2. There will be equal effect in both sides debit and credit side. 3. Double entry system follows some specific rules and re Importance and Advantages 1. It is systematic and scientific. It records transactions following specific rules. 2. It helps to find exact and correct profit and loss. 3. It helps to find correct financial position of business. 4. It helps in decision making and detects frauds and errors. Journal Entry Journal Entry It is the primary book of original entry in which the financial transactions of organization are systematically recorded in chronological order to facilitate the preparation of various ledgers. Objectives of Journal Entry 1. To provide date wise record of every financial transaction of business. 2. To give complete and systematic record of every financial transaction of business firm. 3. To ensure the principles of double entry book keeping system. 4. To facilitate for preparation of ledgers. Types of Accounts 1. Personal Account Accounts related to person and organizations are called Personal Account. E.g.:- Ram, bank, Omega, Capital, etc 2. Real Account Accounts related to properties or assets are called Real Account. E.g.:- Machinery, cash, furniture, land, etc. 3. Nominal/Unreal Account Accounts related to expenditure, income, profit and loss are called Nominal/Unreal Account. E.g.:- Salary, wages, rent, commission, donation, etc. Rules of Debiting and Crediting 1. Traditional method(on the basis of accounts) 2. Modern method(on the basis of item or nature) Traditional method 1. Personal Account Debit the receiver, Credit the giver. 2. Real account Debit what comes in, Credit what goes out. 3. Nominal/ Unreal account Debit all expenditure and loss, Credit all incomes and profit. Modern method Transaction If increased If decreased Assets, expenditure, losses Debit (Dr) Credit (Cr) Capital, Liabilities, income Credit (Cr) Debit (Dr) Ledger Account Ledger Account Ledger is a summarized statement of all the transactions related to assets, liabilities, income and expenses which provides the detail of information regarding such head in a classified manner that facilitates for ascertainment of profit or loss and specified period of time. Objectives of Ledger Accounting 1. To provide information in classified manner. 2. To facilitate the preparation of trial balance. 3. To help for preparation of profit and loss account. 4. To help to determination of financial position. Differences between Journal Entry and Ledger Account S.no Basis Journal Entry Ledger Account 1. Nature of Entry It is primary entry of financial transaction. It is secondary entry of such business transaction. 2. Way of recording In journal, transactions are recorded in chronological order. In ledger, transactions are recorded in classified manner as per their heads. 3. Use of language The process of recording the transaction into journal is called journalizing. The process of recording the transaction to ledger is called posting. 4. Objectives The main objective of journal is to facilitate the preparation of ledgers. The main objective of ledger is to facilitate the preparation of trial balance. Trial Balance Meaning of Trial Balance A trial balance is a statement which is prepared with the help of ledger balance to check the arithmetical accuracy of the book of accounts to summarize the financial record to provide the base for preparing final account. Importance of Trial Balance 1. The preparation of trial balance helps to check the arithmetical accuracy of the books of account. 2. By preparing the trial balance, one can locate the errors easily. 3. All transactions taking place during period are summarized under trial balance. 4. It provides the basis for preparing final accounts. Types of Trial Balance 1. Unadjusted Trial Balance The trial balance which is prepared without taking the year end transactions i.e. adjustments are called unadjusted trial balance. 2. Adjusted Trial Balance The trial balance which is prepared by taking the year end transactions i.e. adjustment is called Adjusted Trial Balance. 3. Post closing Trial Balance The trial balance which is prepared after passing the closing entries for all nominal accounts and before starting a new accounting period is called Post Closing Trial Balance. Objectives of Trial Balance 1. To establish the arithmetic accuracy of ledger accounts. 2. To help in locating errors. 3. To summarize the financial transactions. 4. To provide a base for preparing final account. Method of preparing Trial Balance 1. Total method 2. Balance method 3. Mixed method Causes of not aggregating Trial Balance 1. The wrong totaling of subsidiary book. 2. The wrong amount posting in ledger account. 3. Posting in wrong side of accounts. 4. Omission of carry forward. Suspense Account Suspense account is an artificial account which is opened by an accountant to make the trial balance equal in case of disagreement of debit and credit due to some errors committed in the books of account. When is suspense account open? Suspense account is opened because it helps tin avoiding the delay in the preparation of final account and when the accounting treatment of any amount is uncertain such as amount is transferred to suspense account when the uncertain head for which the amount paid is as the suspense will be cancelled. Why is suspense account closed? When the errors will be disclosed or detected then the suspense account will be closed. Subsidiary Book Subsidiary Book Subsidiary books are the primary book maintained by the business firm in which the transactions are recorded in the classified manner according to their nature i.e. cash or credit. Importance of Subsidiary Book 1. Division of work and labour. 2. Saving of time and labour. 3. Efficiency in work. 4. Easy to obtain the information Types of Subsidiary Book 1. Purchase book: To record credit purchase of trading goods. 2. Sales book: To record credit sales of trading goods. 3. Purchase return book: To record purchase return of trading goods. 4. Sales return book: To record sales return of trading goods. 5. Bills receivable book: 6. Bills payable book: Meaning of Debit note Debit Note is the document which is prepared by the buyer and sent to the seller along with goods returned mentioning the causes of return, amount of goods return and etc. to reduce the amount by payment balance. Meaning of Credit Note Credit Note is a document prepared by seller and sent to the buyer mentioning the amount of goods returned due to damage or other causes. Meaning of Trade Discount (TD) The discount given by seller to buyer at the time of sales of goods to encourage him for purchasing higher quantity of goods is Trade Discount. Meaning of Cash Discount (CD) The discount given by seller to buyer while making the payment of goods encouraging him to make payment within the due date is Cash Discount. Differences between Trade Discount and Cash Discount S.no Trade Discount Cash Discount 1. It is discount on list price. It is discount on credit bill. 2. It is neither income nor loss. It is income for debtors and expenses for creditors. 3. It is not recorded in account books. It is recorded in account books. Cash and Banking Transaction Meaning of Contra Entry When a transaction affects both side of cash book i.e. cash column and bank column at time in the same date is called Contra Entry. Example of Contra Entry 1. Cash deposited/ Cheque paid into bank. 2. Cash drawn from bank for office use. Meaning of Petty Cash Book Petty Cash Book is the cash book to record the petty expenses of the organization for certain time period. Importance/Objectives of Petty Cash Book 1. It reduces the work load of the main cashier. 2. It avoids the impracticable use of cheque. 3. It records the petty expensed systematically and scientifically. Accounting Errors and Rectification Four errors detected by Trial Balance 1. Partial Omission When a transaction is partially omitted to be recorded in the books of account, such errors affect the agreement of trial balance and can be disclosed easily. For e.g.:- salary paid Rs 5000 is omitted to be debited in salary a/c. 2. Posting wrong amount If a wrong amount is posted to the ledger account from primary books of a/c, it will affect the trial balance. For e.g.:- cash received from Ram Rs 5000 is credited to his a/c as Rs 500. 3. Posting on wring side of account When a transaction is posted in the wrong side of ledger a/c, it will affect the agreement of trial balance. For e.g.:- cash paid to Ram Rs 10000 is credited to his a/c. 4. Wrong totaling of subsidiary book or ledger account When totaling the subsidiary book or ledger a/c if the amount is completely wrong, it will also affect agreement of trial balance. For e.g.:- purchase book is overcast by Rs 500. Four errors not disclosed by Trial Balance 1. Complete Omission If a transaction is fully omitted to be recorded in the books of account, it is known as Complete Omission. For e.g.:- goods purchased from Shrestha & Company Ltd. worth Rs 20000 is omitted to be recorded in purchase book. 2. Posting in wring account but in right side When a transaction is posted in the wrong acco9unt but in the right side, it also doesn’t affect the trial balance. For e.g.:- rent paid Rs 10000 is wrongly debited in wage a/c. 3. Compensating Error When the effect of one error is compensated or neutralized by another error is known as Compensating Error. For e.g.:- cash received Rs 5000 from Ram are debited as Rs 500 in cash a/c and cash received from Hari Rs 500 is debited as Rs 5000 in cash a/c. 4. Error of Principle Error of Principle can be defined as an error which is committed due to violating the fundamental principle of accounting. If a transaction is recorded by not following the transaction is recorded by not following the basis principle, concept and standard of accounting is known as Principle Error. For e.g.:-purchase of machine Rs 100000 is recorded in purchase book and payment of erection charges of machine Rs 10000 is debited to wages a/c. Capital and Revenue Concept Capital Receipt (income) The amount received as capital/loan or from the sales of fixed assets is known as Capital Receipts. These receipts are recorded on balance sheet. These receipts are non-regular in nature and provide benefits for longer period of time. Examples of Capital Receipts 1. Amount received as capital and investment. 2. Amount received as special donation. 3. Amount received from sale of fixed assets. 4. Amount received as loan. Revenue Receipt The amount received from the regular business transaction like sales of goods, etc is known as Revenue Receipt. These receipts are regular in nature and give benefits for short period of time. These receipts are recorded in credit side of income statement. Examples of Revenue Receipts 1. Amount received as commission, discount, interest, rent, dividend, etc 2. Amount received from sales of trading goods. Capital Expenditure Capital Expenditure is the expenditure which produces benefits for long period of time. All the capital expenditure is recorded in assets side of balance sheet. It is made to increase the working capacity of the organization. It is non-regular in nature. Examples of Capital Expenditure 1. Expenditure made on fixed assets 2. Expenditure incurred for purchasing of trade mark, goodwill, patent, copy right 3. Expenditure made for research and developmental works for new product and services. 4. Expenditure made for establishment of new business, industry Revenue Expenditure Revenue Expenditure is the expenditure which produce benefits or whose benefits can be consumed for short period of time. All the revenue expenditure are recorded on trading or P/L a/c. Revenue expenditure are made to maintain existing eraning capacity of organization. It is regular in nature. Examples of Revenue Expenditure 1. Expenditure made on purchase or raw material for resale 2. Expenditure made on salary, wage, commission, interest 3. All office and administration expenses 4. Expenditure made for maintaining fixed assets Capital Profit The profits which are earned through extraordinary business transactions like selling of fixed assets, issuing shares and debentures, etc and which are irregular in nature is known as Capital Profit. It is shown in the liabilities side of balance sheet and is not available for distribution as profit. Examples of Capital Profit 1. Profit earned by selling fixed assets in more than its original price 2. Profit made on revaluation of fixed assets. 3. Profit earned by issuing shares or debenture at premium Revenue Profit The profit which is earned through regular business transaction is known as Revenue Profit. It is regular in nature and repetitive in nature. It is shown in the credit side of P/L a/c and liabilities side of balance sheet. Examples of Revenue Profit 1. Profit earned on sale of trading goods or services 2. Income from investment. 3. Commission earned by providing services 4. Discount received on purchasing goods Capital Losses The losses which are incurred in the sales of fixed assets and issuing shares and debenture at discount are called Capital Losses. It is occasional in nature and it affects the position of business firm. Examples of Capital Losses 1. Loss on sale of fixed assets at lower price 2. Loss or discount on issue of share and debenture Revenue Losses Those losses which are created by daily business activities are called Revenue losses. It is regular in nature and it affects the probability position of firm and indicates the inefficiency too. Examples of Revenue Losses 1. Loss on sales of trading foods 2. Goods lost by fire/theft 3. Loss due to bad debt Capital Reserve Capital Reserve is the reserve which is created out of capital profit. This kind of reserve is not for the distribution to the owner but to meet the capital losses. Examples of Capital Reserve 1. Profit on sales of fixed assets 2. Profit on purchasing a running business 3. Profit on sales of shares and debentures 4. Profit on revaluation of assets and liabilities Revenue Reserve The reserve fund created out of the revenue profit is called Revenue Reserve. It refers to the undistributed amount of revenue profit Examples of Revenue Reserve 1. Reserve for bad and doubtful debt 2. General reserve 3. Sinking Fund Journal Proper Define Journal Proper. Give some examples recorded in Journal Proper. Journal Proper is a special type of journal in which occasional financial transaction, which are not recorded in any subsidiary book, are recorded in systematic and chronological order. Some examples recorded in Journal Proper are:- 1. Opening Entries 2. Closing Entries 3. Transfer Entries 4. Rectifying Entries 5. Entry for credit purchase and sales of fixed assets 6. Adjustment Entries Reserve and Provision Meaning of Reserve Reserve is the portion of profit set aside with a view to make the business firm financially strong by charging against the profit and loss appropriation a/c. Features of Reserve 1. It is generated only in case of profit. 2. It is created to meet unknown future liabilities and belongs to owners or shareholders. 3. It is not a legal compulsion to create the amount of reserve. Objective/Importance of Reserve 1. To meet future unknown liabilities and emergencies. 2. To strengthen the financial position of the firm. 3. To provide funds for replacing the wasting assets. 4. To provide additional working capital for expansion of business. Meaning of Revenue Reserve The reserve which is created out of revenue profit is called Revenue Reserve. Meaning of General Reserve General Reserve is that type of reserve which is created not for the specific purpose. Meaning of Specific Reserve Reserve which is created out of revenue profit for a particular is known as Specific Reserve. Meaning of Sinking Fund A sinking fund is a specific reserve set aside by annual contribution for redemption of a long term debt or the replacement of wasting assets. Examples of Sinking Fund 1. Sinking fund for replacing assets. 2. Sinking fund for redemption of liabilities. Meaning of Research and Development Fund Amount of fund created for market research and development work is known as Research and Development Fund. Meaning of Capital Reserve The reserve which is created out of capital fund is Capital Reserve. Ways of creating Capital Reserve 1. Profit earned by selling fixed assets in more than its original price. 2. Profit earned by issuing shares and debentures at premium. 3. Profit made on revaluation of fixed assets. Meaning of Secret Reserve Secret Reserve is the reserve which is maintained with a view to strengthen the financial condition of business without disclosing in the book of account. Ways of creating Secret Reserves 1. By depreciation the fixed assets at higher rates. 2. By treating capital expenditure as revenue expenditure. Merits/Causes of creating Secret Reserve 1. The rate of dividend of different years can be equalized with the help of secret reserve. 2. Competition can be minimized from entering into a competitive business. 3. The work capital of business increase due to creation of secret reserve. Demerits of creating Secret Reserve 1. The financial statement does not display the correct financial position of the business. 2. The principle of transparency is violated due to creation of secret reserve. 3. The directors are provided the space for committing frauds. Meaning of Provision A provision is the amount set aside by debiting the profit and loss account with a view to meet the known loss or liabilities the amount of which is uncertain. Objectives of creating Provision 1. To ascertain the true net profit or loss of the firm. 2. To know the true financial position of the business firm. Examples of Provision 1. Provision for bad and doubtful debts 2. Provision for depreciation 3. Provision for discount on debtors Differences between Reserve and Provision S.no Basis Reserve Provision 1. Objectives Reserve is created to strengthen the financial condition of business. It is created to meet anticipated losses or liabilities. 2. Creation It is an appropriation of profit. It is charged against the profit. 3. Distribution It can be distributed as dividend to the shareholders. It is not available for distribution among the shareholders. Accounting for Incomplete Records (Single Entry System) Meaning of Single Entry System The incomplete, unscientific, unsystematic and traditional system of dealing with the financial transaction which maintains the cash book and personal ledger and ignores the duel effect of a transaction is called Single Entry System. Features of Single Entry System 1. Incomplete recording system 2. No fixed rules 3. Maintain cash book 4. Maintain personal accounts 5. Lack o uniformity Merits of Single Entry System 1. It is simple and easy. 2. It is economical in use. 3. It is suitable for small business, 4. Easy to calculate profit and loss. 5. Saving of time. Demerits of Single Entry System 1. Unscientific and Unsystematic 2. Incomplete recording system 3. Lack of arithmetic accuracy 4. Fails to provide true profit and loss 5. Fails to provide true financial position 6. More chance of frauds and errors Differences between Single Entry System and Double Entry System S.no Single Entry System Double Entry System 1. It is incomplete recording system. It is complete recording system. 2. It maintains only cash and some personal transaction. It maintains all transaction either it is related to personal, real and nominal account. 3. It is suitable only for smaller business having limited number of transaction. It is suitable for a large business having more capital and large number of transaction. 4. Determination of true profit or loss and financial position is impossible. Determination of true profit or loss and financial position is possible through preparation of financial statement. 5. It is not acceptable for tax purpose. It is acceptable for tax purpose. Government Accounting Meaning of Government Accounting Government Account is the process of systematic recording, analyzing, classifying, summarizing, communicating and interpreting monetary transaction of government bodies. It deals with the collection of revenue and funds and expenditure for public welfare. Objectives/Importance of Government accounting 1. To record the financial transaction of government offices. 2. To provide financial data and information. 3. To keep control over the budget. 4. To help preparing annual report. 5. To make job of auditing easier. Features/Characteristics of Government Accounting 1. It is guided and controlled by budget. 2. IT is based on double entry system. 3. It prefers banking transaction. 4. It follows government rules and regulation Differences between Government Accounting and Commercial Accounting S.no Basis Government Accounting Commercial Accounting 1. Based on budget It is based on budget and controlled by budget. It is not based on budget. 2. Maintain by It is maintained by government offices. It is maintained by commercial organization. 3. Accounting Basis It is maintained on cash basis. It is maintained on cash as well as accrual basis. 4. Rules and act It follows government rules and act. It follows rules of GAAP. Types of Accounting System used in Nepal 1. Wasil Banki Sresta Pranali 2. Syaha Sresta Pranali 3. Farm Sresta Pranali 4. Bhuktani Sresta Pranali Wasil Banki Sresta Pranali Wasil Banki Sresta Pranali is very simple book or statements of recording of government revenue and expenditure. All revenue and expenditure can be recorded in a sheet. Sheets were divided into 2 parts. On left hand side all revenues were recorded and on right hand side all expenditure were recorded in classified manner. It was suitable for small or temporary office. Since it was kept under single entry system. Syaha Sresta Pranali It is an important recording system which was propounded by Karidar Gaunawant in 1936 B.S. It was reliable, better and systematic than Wasil Banki Sresta Pranali. In this system revenue as well as their expenditure and their total and balance also could be shown on the same paper. Syaha Sresta Pranali A. Syaha (J) 1. Nagadi/Cash 2. Jinsi/Property 3. Dharuati B. Awarje (L) 1. Income awarje 2. Expenditure/ Vinjalik Awarje C. Dhapot (B) 1. Job ending 2. Month Ending 3. Year ending Farm Sresta Pranali Farm (Form) Sresta Pranali was introduced in 1968 B.S to meet the requirement of city and terai areas of Nepal. It was felt to bring in use the various types of forms due to increasement in volume of financial transactions. Such system was called Farm Sresta Pranali. In Farm Sresta Pranali fifty one different forms were used to record the different repetitive transactions. The following major forms are used in Farm Sresta Pranali:- 1. Day book of cashier 2. Ten days report 3. Fifteen days report 4. Monthly cash book, etc Bhuktani Sresta Pranali New Accounting System (NAS) of Government of Nepal It may be defined as the present accounting system of government of Nepal which was suggested by ‘Accounting Committee 2017’ for systematic recording of government’s financial transaction. Objectives of New Accounting System 1. To provide financial statistics and data for preparation of financial report. 2. To maintain effective control budget and get the good result of operation. 3. To control the historical data under different budget heads. 4. To safe guard the physical property of the government. Importance of New Accounting System 1. It reflects the summary of financial transaction. 2. It is helpful for preparation of budget. 3. It is helpful for controlling the budget. 4. It is helpful for auditing. Feature and Characteristics of New accounting System 1. It is based on double entry system. 2. It gives emphasis on banking transaction. 3. It keeps account under budget head. 4. It is changeable and can be changed as per need. 5. It maintains secrecy of accounting information. Level of New Accounting System 1. Central Level Accounting 2. Operating Level Accounting Meaning of Central Level Accounting Central Level Accounting means the accounting maintained by central level offices. Central level offices are those government offices which received their budget from the ministry of finance and release the budget to their respective operating offices. The ministry, departments and constitutional bodies fall under central level offices. Meaning of Operating Level Accounting The accounting system adopted by operating level offices is called Operating Level Accounting. Operating level offices refers for those government branch or regional offices which receives budget from central level offices and make expenditure accounting to the prescribed budget heads. The operating level of government offices are responsible towards their central level offices and have to submit the statement of expenditure to them. Statement of Expenditure (AGF no.13) Meaning Statement of expenditure is one of the monthly statements to be prepared by operating level offices at the end of each month that discloses the information about total budget release, total expenditure, annual budget, balance of budget, cash balance, bank balance, etc. Parts of Expenditure Report 1. Part showing the position of budget 2. Part showing the position of fund Advantages 1. It helps to evaluate the performance of operating level offices in terms of budget expenditure, budget release and balance of budget. 2. It acts as an administrative tool for preparing rules and regulation and implementation of various government activities. 3. It facilitates auditing by providing evidential information regarding appropriation, expenditure, surplus budget and un-cleared advance. Bank Cash Book (AGF no.5) Meaning Bank Cash Book is a multi-column ledger maintained by each government offices in order to avoid chances of misuse, misappropriation and embezzlement of cash, which records the cash receipts and payments made through bank during a certain period on the basis of their corresponding journal vouchers. Importance 1. It helps to know the amount of cash balance, bank balance, budget expenditure, advance given and cleared at any time after each transaction. 2. It helps to maintain the record of cash and banking transaction. 3. It helps in planning to cash requirements and disbursement. 4. It helps in preparation of audit report and other financial statement. Budget Sheet Meaning Budget Sheet is a format prescribed by government of Nepal for operating level offices to record and controls the budget expenditure with allocated budget showing annual appropriation, budget release and monthly expenditure. Importance 1. It provides the information about budget transfer. 2. It is important for the information of annual appropriation, budget release and budget expenditure. 3. It gives the actual information about the budget release for the operating level offices. 4. It helps the operating level offices to make expenditure within budget limit. Petty Cash Fund Define Petty Cash Fund Petty Cash Fund is a fund which is credited under the responsibility of an employee by each government offices in order to make the payment of small directly in cash such as newspaper, postage, stamp, bus fare, etc. Importance and Advantage of Petty Cash Fund 1. It facilitates the recording of payment of small expenditure. 2. It helps to maintain effective control over misuse and manipulation of cash. 3. It helps to determine the total amount of expenditure made in small head during a certain period. 4. It reduces the work load of main cashier.
Posted on: Fri, 23 May 2014 05:49:48 +0000
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