Unit – 1
Introduction
1. What is Government Accounts?
The accounts maintained by the three levels of Governments in India namely: The
Central Govt, State Govts and Local Govts to record and maintain a track of their
transaction is known as Govt Accounts.
2. Mention the forms of Govt Accounts.
a. Revenues.
b. Advances and loans.
c. Recoveries of loan granted by Govt.
3. What are objectives of Govt Accounting?
a. To record all the financial transaction of Govt.
b. To record the Revenue and Expenditure of the Government.
c. To control govt expenditure, does not exceed the limits predetermined by the budgets.
d. To ensure that the govt expenditure is incurred as per the procedures, policies and
rules of the Govt.
e. To avoid the misuse or misappropriation of Govt properties through systematic
records. This includes cash and stores also.
f. To facilitate the auditing of books and accounts.
g. To provide ready data for the decisions by the govt.
h. To help in the preparation of financial statements and reports.
i. To facilitate the preparation future budget.
4. What are the features of Govt Accounts?
a. Explains fund utilization: Government Accounts explain the utilization of funds to
achieve the objective of social benefit and is not aimed at knowing profit or loss
position.
b. Compliance Factors: Govt Accounts are prepared to comply with or fulfill the
procedures, policies and rules and regulations of the Govt.
c. System of recording Double Entry System: All Govt Accounts are recorded and
maintained under double entry system.
d. Creation of Budget heads: The various expenses are classified and brought under
specific budget heads.
e. Budgetary control: The Budgets are used as yardsticks to compare with actual
expenses and achieve the cost control.
f. Banking / Banks are the medium of Transactions: All the Govt transaction are
supposed to be carried out through the banks only leaving very exceptional cases.
g. Regular Audits: The Accounts maintained by all Govt offices are subject to audit by
the concerned Govt department of audit.
5. Differences between Govt Accounting and Commercial / Private Accounting.
Sl no. Head Govt Accounting Private Accounting
1 Meaning Accounts are known as Govt Accounts are known as
, Accounting. Commercial Accounting.
2 Objective To know the use of fund to To know the profit / loss and
achieve social benefit. financial position.
3 Budget Govt Accounting strictly Private accounts may or may
Adherence follows the budgets. not follow budgets strictly.
4 Method / Follows cash basis / method. Follows accrual method.
Basis of
Recording
5 Scope Financial and non-financial Only financial information.
information.
6 Levels of Govt Accounting follows two No such multiple levels are
Accounting levels, namely Central level followed.
and operating level.
7 Rules and Governmental rules and Accepted Accounting
provisions provisions are strictly Principles or Accounting
observed. Standards are observed.
8 Auditing Audit is conducted by the Auditor is conducted by a
Auditor General official of professional Auditor.
govt.
6. How many parts are there in Govt Accounting?
There are three parts in Govt Accounting:
Consolidated Fund.
Public Account Fund.
Contingency Fund.
7. What are three stages of Govt Accounting?
a. Collection.
b. Processing.
c. Reporting.
8. What is the scope of Govt Accounting?
a. Scope of Government accounting is General Administration.
b. It includes financial and non-financial information.
9. What is the origin of Govt Accounting in India?
Govt Accounts were maintained from Ancient times in India. Kautilya’s Arthashastra had
defined procedure of maintenance of Govt Accounts.
10. What are the factors for evaluating Government Accounting?
a. Transparency in public Administration.
b. Accountability in public Administration.
c. Implementation of Internal Auditing.
d. Efforts in External public Auditors.
e. Performance based and multi-year budgeting activities.
f. Efforts in Govt Accounting and Auditing.
, g. Transition to integrated Accounting in the public sector with the impact of
Technology.
11. What is the purpose of Govt Accounting?
To carry out financial transactions of Govt in a timely, efficient and reliable manner.
12. How is income classified and sub-classified in Govt accounting?
a. Tax Revenue.
Taxes on income and expenditure.
Taxes on capital expenditure and property.
Taxes on commodity and services.
b. Non-Tax revenues.
Interest Receipts.
Divided and Profit.
Other Incomes.
13. How is expenditure classified?
a. General Services.
Administrative Service.
Defence Services.
Servicing of Debts.
Fiscal Services.
b. Social Services.
c. Economic Services.
d. Grant-in-Aid and Contributions.
14. What are the Principles of Accounting?
a. Responsibility for Govt Accounting: This lies with Audit and Accounts Department
other than Railways, defence and transactions outside India.
b. System of Accounting: The Govt usually follows single entry of accounting. In some
cases, where the arithmetical accuracy is to be ascertained double entry principle is
followed.
c. Commercial Enterprises under public sector: Double entry system under mercantile
basis is followed in case of commercial enterprises under public sector. This is to
ascertain the profit / loss and financial position of such enterprises.
d. Classification of Income and Expenditure:
Incomes Expenses
Tax Revenue Non-Tax Revenue
Social General Economic Grant in Aid &
Services Services Services Contributions
, e. Consolidated Transaction: In Govt Accounting, initially the transactions are
recorded under various heads of accounts and later consolidated to show the results
for a period.
f. Technical Accounts: The accounts of Govt are prepared under Single Entry but in
order to prepare a set of accounts Double Entry System is followed. The technical
accounts include Journal and Ledger.
15. What is Fiscal Transparency?
Fiscal Transparency refers to the publication of information or data on how Govt raise,
spend and manage public resources.
16. What are four pillars of Fiscal Transparency or Fiscal Transparency code?
a. Fiscal Reporting [Pillar i].
b. Fiscal Forecasting & Budgeting [Pillar ii].
c. Fiscal Risk Analysis & Management [Pillar iii].
d. Resource Revenue Management: This is to establish a transparent framework for the
establishment and use of public revenue.
17. How accounts act as a tool of fiscal transparency?
a. Accounts provide reliable data of public revenue.
b. Accounts provide reliable data of public expenditure.
c. The comparisons can be made about the fiscal budget and actuals to know the
deviation.
d. An account strengthens the fiscal transparency.
e. Such accounts help in monitoring and achieving improving the fiscal policy in future.
18. Explain the three types of the Govt.
a. Consolidated Fund of India: It is the account of the revenue of the Govt of India
receiving money through the various tax and non-tax revenue sources and the
expenses incurred excluding exceptional items. For ex: Direct taxes, Indirect taxes,
Dividend and Profits from public Sector undertaking and so on.
b. Public Account: A Public Account is an Account which shows the funds received on
behalf of Govt of India. Public Accounts Funds do not belong to the Govt but have to
be ultimately refunded to the persons who deposited those funds. For ex: Provident
Fund, Small savings A/c and so on.
c. Contingency Funds: A contingent fund of India is an imprest fund for the nation and
enables the Govt to meet unforeseen expenditure which can’t wait for the approval of
Parliament. For ex: Expenditure during natural Disasters like floods and famines.
19. What is Government Accounting?
It’s the scientific procedure of collecting, classifying, recording, summarizing and
interpreting all the financial transactions i.e. revenue and expenditure of all govt offices.
20. State the meaning of Govt in Financial Rule and Explain Rules.
a. The Audit report of Govt societies or Autonomous bodies should be placed on the
table of House i.e. Parliament legislature.
Introduction
1. What is Government Accounts?
The accounts maintained by the three levels of Governments in India namely: The
Central Govt, State Govts and Local Govts to record and maintain a track of their
transaction is known as Govt Accounts.
2. Mention the forms of Govt Accounts.
a. Revenues.
b. Advances and loans.
c. Recoveries of loan granted by Govt.
3. What are objectives of Govt Accounting?
a. To record all the financial transaction of Govt.
b. To record the Revenue and Expenditure of the Government.
c. To control govt expenditure, does not exceed the limits predetermined by the budgets.
d. To ensure that the govt expenditure is incurred as per the procedures, policies and
rules of the Govt.
e. To avoid the misuse or misappropriation of Govt properties through systematic
records. This includes cash and stores also.
f. To facilitate the auditing of books and accounts.
g. To provide ready data for the decisions by the govt.
h. To help in the preparation of financial statements and reports.
i. To facilitate the preparation future budget.
4. What are the features of Govt Accounts?
a. Explains fund utilization: Government Accounts explain the utilization of funds to
achieve the objective of social benefit and is not aimed at knowing profit or loss
position.
b. Compliance Factors: Govt Accounts are prepared to comply with or fulfill the
procedures, policies and rules and regulations of the Govt.
c. System of recording Double Entry System: All Govt Accounts are recorded and
maintained under double entry system.
d. Creation of Budget heads: The various expenses are classified and brought under
specific budget heads.
e. Budgetary control: The Budgets are used as yardsticks to compare with actual
expenses and achieve the cost control.
f. Banking / Banks are the medium of Transactions: All the Govt transaction are
supposed to be carried out through the banks only leaving very exceptional cases.
g. Regular Audits: The Accounts maintained by all Govt offices are subject to audit by
the concerned Govt department of audit.
5. Differences between Govt Accounting and Commercial / Private Accounting.
Sl no. Head Govt Accounting Private Accounting
1 Meaning Accounts are known as Govt Accounts are known as
, Accounting. Commercial Accounting.
2 Objective To know the use of fund to To know the profit / loss and
achieve social benefit. financial position.
3 Budget Govt Accounting strictly Private accounts may or may
Adherence follows the budgets. not follow budgets strictly.
4 Method / Follows cash basis / method. Follows accrual method.
Basis of
Recording
5 Scope Financial and non-financial Only financial information.
information.
6 Levels of Govt Accounting follows two No such multiple levels are
Accounting levels, namely Central level followed.
and operating level.
7 Rules and Governmental rules and Accepted Accounting
provisions provisions are strictly Principles or Accounting
observed. Standards are observed.
8 Auditing Audit is conducted by the Auditor is conducted by a
Auditor General official of professional Auditor.
govt.
6. How many parts are there in Govt Accounting?
There are three parts in Govt Accounting:
Consolidated Fund.
Public Account Fund.
Contingency Fund.
7. What are three stages of Govt Accounting?
a. Collection.
b. Processing.
c. Reporting.
8. What is the scope of Govt Accounting?
a. Scope of Government accounting is General Administration.
b. It includes financial and non-financial information.
9. What is the origin of Govt Accounting in India?
Govt Accounts were maintained from Ancient times in India. Kautilya’s Arthashastra had
defined procedure of maintenance of Govt Accounts.
10. What are the factors for evaluating Government Accounting?
a. Transparency in public Administration.
b. Accountability in public Administration.
c. Implementation of Internal Auditing.
d. Efforts in External public Auditors.
e. Performance based and multi-year budgeting activities.
f. Efforts in Govt Accounting and Auditing.
, g. Transition to integrated Accounting in the public sector with the impact of
Technology.
11. What is the purpose of Govt Accounting?
To carry out financial transactions of Govt in a timely, efficient and reliable manner.
12. How is income classified and sub-classified in Govt accounting?
a. Tax Revenue.
Taxes on income and expenditure.
Taxes on capital expenditure and property.
Taxes on commodity and services.
b. Non-Tax revenues.
Interest Receipts.
Divided and Profit.
Other Incomes.
13. How is expenditure classified?
a. General Services.
Administrative Service.
Defence Services.
Servicing of Debts.
Fiscal Services.
b. Social Services.
c. Economic Services.
d. Grant-in-Aid and Contributions.
14. What are the Principles of Accounting?
a. Responsibility for Govt Accounting: This lies with Audit and Accounts Department
other than Railways, defence and transactions outside India.
b. System of Accounting: The Govt usually follows single entry of accounting. In some
cases, where the arithmetical accuracy is to be ascertained double entry principle is
followed.
c. Commercial Enterprises under public sector: Double entry system under mercantile
basis is followed in case of commercial enterprises under public sector. This is to
ascertain the profit / loss and financial position of such enterprises.
d. Classification of Income and Expenditure:
Incomes Expenses
Tax Revenue Non-Tax Revenue
Social General Economic Grant in Aid &
Services Services Services Contributions
, e. Consolidated Transaction: In Govt Accounting, initially the transactions are
recorded under various heads of accounts and later consolidated to show the results
for a period.
f. Technical Accounts: The accounts of Govt are prepared under Single Entry but in
order to prepare a set of accounts Double Entry System is followed. The technical
accounts include Journal and Ledger.
15. What is Fiscal Transparency?
Fiscal Transparency refers to the publication of information or data on how Govt raise,
spend and manage public resources.
16. What are four pillars of Fiscal Transparency or Fiscal Transparency code?
a. Fiscal Reporting [Pillar i].
b. Fiscal Forecasting & Budgeting [Pillar ii].
c. Fiscal Risk Analysis & Management [Pillar iii].
d. Resource Revenue Management: This is to establish a transparent framework for the
establishment and use of public revenue.
17. How accounts act as a tool of fiscal transparency?
a. Accounts provide reliable data of public revenue.
b. Accounts provide reliable data of public expenditure.
c. The comparisons can be made about the fiscal budget and actuals to know the
deviation.
d. An account strengthens the fiscal transparency.
e. Such accounts help in monitoring and achieving improving the fiscal policy in future.
18. Explain the three types of the Govt.
a. Consolidated Fund of India: It is the account of the revenue of the Govt of India
receiving money through the various tax and non-tax revenue sources and the
expenses incurred excluding exceptional items. For ex: Direct taxes, Indirect taxes,
Dividend and Profits from public Sector undertaking and so on.
b. Public Account: A Public Account is an Account which shows the funds received on
behalf of Govt of India. Public Accounts Funds do not belong to the Govt but have to
be ultimately refunded to the persons who deposited those funds. For ex: Provident
Fund, Small savings A/c and so on.
c. Contingency Funds: A contingent fund of India is an imprest fund for the nation and
enables the Govt to meet unforeseen expenditure which can’t wait for the approval of
Parliament. For ex: Expenditure during natural Disasters like floods and famines.
19. What is Government Accounting?
It’s the scientific procedure of collecting, classifying, recording, summarizing and
interpreting all the financial transactions i.e. revenue and expenditure of all govt offices.
20. State the meaning of Govt in Financial Rule and Explain Rules.
a. The Audit report of Govt societies or Autonomous bodies should be placed on the
table of House i.e. Parliament legislature.
