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Government Accounting

1. Write the meaning of government accounting.

Ans:-Government accounting systematically and scientifically records the all revenues and expenditures of the government offices including ministries, departments and operating level offices. It includes revenues and expenses data which facilitates for the preparation of budgets for the future.

2. Write any four features of governmental accounting.

Ans:-The four features of government accounting are given below:

a. Based on financial acts and rules:-Government account should be strict on the provisions made on finance act and rules.

b. Based on double entry concept:-Government accounting is based upon double entry concept of bookkeeping. It assumes that every financial transaction affect two sides i.e. the debit and credit. Thus, every transaction under government accounting is recorded considering dual effect.

c. Based on budget system:-All the financial transactions under government accounting are based under budget system. They are classified and recorded under various budget head and subheads. It helps to keep control over the budget.

d. Emphasis on banking transaction:-All government transactions are supposed to be performed through banks. All revenues are collected in bank account and expenditures are paid through bank.

3. Write brief any four objective/importance of governmental accounting of Nepal.

Ans:-The objectives of accounting system of government of Nepal are given below:

a. To keep record of government transactions:-The major objective of government accounting is to keep systematic and proper record of governmental transactions. The government accounting keeps correct records of the financial transaction of government offices as per rules and regulation.

b. To keep control over budget:-The government prepares budget every year. It includes the estimation of government revenue and expenditures. The government accounting aims to keep proper control over budget.

c. Provide information required for annual report:-Communicating the information is one of the important objectives of government accounting. Every government has to prepare and communicate the annual report to its public.

d. To make the auditing simple and economical:-The government accounting maintains the complete and systematic record of the governmental revenue and expenditures. All the books of accounting are audited to ensure the following of accounting principles and other financial rules and provisions.

4. State any five features of new accounting system.

Ans:-The five features of new accounting system are as follows:

a. Based on double entry system:-New accounting system is based on modern double entry system of book-keeping.

b. Cash basis accounting:-All transactions are measured in terms of money. All receipts are recorded when they received and all payments are recorded when they are paid.

c. Uniformity:-New Accounting System has brought uniformity simplicity and flexibility in government accounting.

d. Banking transaction:-It emphasizes on bank transaction, i.e. all cash transactions are made through the bank.

e. Controlled by budget:-New accounting system facilitates budgetary control. No governmental expenditure can make more than the allocated budget amount.

5. Mention any five objectives of New Accounting System.

Ans:-The following are the five objectives of New Accounting System:

a. To record financial transactions of government.

b. To ensure that limitations of budgets are properly observed.

c. To provide correct information on the use and results of financial operation of various funds, loans, investment and assets etc.

d. To facilitate auditing and make auditing less expensive.

e. To provide information for preparing annual budget and periodical financial reporting.

6. Briefly write any 5 importance of New Accounting system.

Ans:-The 5 importance of New Accounting system are as under:

a. To provide financial data and information for preparing effective budget.

b. To make auditing simple and economical.

c. To ensure budgetary control as it does not allow for over expenditure and saves the government fund.

d. To keep records of past economic activities of the government.

e. To inform people about the revenue and expenditure of government.

7. State any four differences between government accounting and commercial accounting.

Ans:-The four differences between government accounting and commercial accounting are as follows:

Bases of DifferenceGovernment AccountingCommercial Accounting
UseIt is used to record revenues and expenditures of the government.It is used to record financial transactions of business firms to determine the amount of profit or loss.
CommunicationIt provides information relating receipts, disposition and transfer of public by legal provisionsIt provides information about the firm’s performance and financial condition.
BasisIt is based on the cash basis of accounting system.It is based on cash and accrual basis of accounting system.
Auditing processGovernment accounts are audited by the constitutional body i.e. office of the Auditor’ general.Commercial accounts are audited by the professional persons licensed as auditors.

8. Write in brief the meaning of central level of accounting.

Ans:-The accounting system maintained by the central level government offices is known as central level of accounting. It maintains the record of budget received from ministry of finance and release made to operating level offices. Journal voucher, ledger, subsidiary books, bank statement, etc. are the books of account to be maintained under central level accounting.

9. Write short notes on Shyaha and Dhapot.

Syaha:-Syaha was used to record the original record of transaction like journal. It was prepared in ‘T’ shape made by folding and pressing the papers meant to record transaction. The book was also called sixteen columns Shyaha. And left side or part of the paper was used for the recording revenue income and right side or part of the paper was used to record the expenditures.

Dhapot:-Dhapot was a final summarized statement of all the transactions of a project or job in a period. It was like a balance sheet of today. It was prepared to present the summary of the governmental financial position during a certain period.

10. What do you understand by capital subsidy? Who are eligible for such subsidy?

Ans:-According to decision of government of Nepal gives order to reconstruction of infrastructure and to improve capital natures assets subsidy is called capital subsidy. Following are the eligible to receive these types of subsidy:

a. Subsidies to public corporations

b. Subsidies to local bodies

c. Subsidies to service oriented institutes