Book 10 Account Final for 2077_new

C. Long answer questions 1. Draw the specimen of journal voucher showing its different parts. 2. What is meant by advance clearance? What are the conditions of clearing advance in government offices? Explain with example. 3. Write short notes on: a) Imprest fund b) Security deposit c) Budget release d) Petty cash fund PRACTICAL PROBLEMS(PP) PP-1 Following transactions of District Administration Office, Kaski are given to you: a) 2074-04-03 Issued a cheque of Rs. 10,000 for purchase of furniture. b) 2074-04-10 Issued a cheque of Rs. 50,000 for purchase of machinery. c) 2074-04-13 A cheque of Rs. 6,00,000 was issued for purchase of vehicle. d) 2074-04-25 Payment made by cheque Rs. 4,000 for electricity charges. e) 2074-05-10 Issued a cheque of Rs. 35,000 for purchasing a computer. f) 2074-05-24 Purchased dress materials to staffs for Rs. 10,000 and paid by cheque. g) 2074-05-25 Payment made by cheque Rs. 3,000 for communication charges and Rs. 1,000 for water supply charges. Required: Journal vouchers (AGF No. 10) PP-2 Following transactions relating to District Health Office, Palpa are given to you: a) 2074-05-10 Paid Rs. 25,000 for house rent by cheque No. 01349 b) 2074-05-15 Shankha Furniture Industry was paid Rs. 10,000 through cheque No. 01550 for purchase of office table. c) 2074-05-18 Water supply charges Rs.1,550 was paid to Nepal Khanepani Sansthan by cheque No. 02345. d) 2074-05-20 Paid salary Rs. 50,000 by cheque No. 01598. e) 2074-06-25 Issued a cheque of Rs. 19,000 for purchase of production materials. f) 2074-07-27 Purchased feeding materials for Rs. 7,000 and paid by cheque. g) 2074- 08-30 Purchased office materials of Rs. 11,000 and sports materials of Rs. 9,000 and paid by cheque. Required: Journal vouchers Journal Voucher 251

PP-3 Following transactions of an operating level government office are given: a) 2074-04-07 Issued a cheque of Rs. 10,000 to Accountant Miss Supriya Basnet as an advance for purchase of furniture. b) 2074 -04-27 Issued a cheque of Rs. 50,000 to Nayab Subba Mr. Ashish Thapa as an advance for purchase of plant and equipment. c) 2074-05-02 An advance of Rs. 14,000 is given to Section Officer for purchase of office Mrs. Sarika Kafle, materials through cheque No. 05948 d) 2074-05-20 Issued a cheque of Rs. 15,000 to Mr. Bindukar as an advance to purchase sports materials. e) 2074-06-01 Issued a cheque of Rs. 9,000 to Account Officer, Miss Amita shrestha as travelling expenses advance. Required: Journal vouchers (AGF No. 10) PP-4 Following are the transactions of an operating level government office provided to you: a) 2074-06-05 Issued a cheque of Rs. 10,500 to Section Officer, Mr. Binod Karki as an advance for purchase of production materials. b) 2074-06-17 Issued a cheque of Rs. 13,000 to Account Officer Miss, Manisha Karki as an advance for purchasing dress materials. c) 2074-06-30 An advance was given to Mr. Kamal Shrestha for purchasing computer Rs. 50,000. d) 2074-07-05 Issued a cheque of Rs. 10,000 in favour of house owner, Miss Sumnima Oli as an advance for house rent. e) 2074-07-10 A cheque of Rs. 18,000 was issued in favour of Kharidar Mr. Manoj Khatri, as an advance for purchasing fooding materials. Required: Journal vouchers PP-5 The following transactions of District Education Office, Mugu are given: a) 2074-08-01 Advance rent paid to house owner Mr. Pradhan through cheque for coming three months @ Rs.5,000 per month. b) 2074-08-05 Account Officer, Mrs. Prabha Karki was paid Rs. 14,000 in advance through cheque No. 34980 for purchase of production materials. c) 2074-08-09 Through cheque No. 34899, Rs. 24,000 was paid in advance to Storekeeper, Mr. Yonjan for purchase of food for military. d) 2074-08-13 Opened L/C in the name of Maruti Company for purchase of Maruti car of Rs. 9,00,000 for office use. e) 2074-08-17 Paid cash Rs. 1,20,000 to Accountant, Mr. Saroj Adhikari as an advance for buying motorcycle. Required: Journal vouchers (AGF No. 10) 252 Office Management and Accountancy

PP-6 Following transactions of District Health Office, Nuwakot are given: a) 2074-06-03 Account Officer, Miss Anupama Tiwari returned travelling expenses advance of Rs. 9,000 through bank due to postponement of her travelling programme and her advance cleared. b) 2074-06-09 Subba Krishna Man Tamrakar returned cash Rs. 15,000 to office which was taken for purchasing machinery and requested for advance clearance. c) 2074-06-25 Kharidar Gopal Man Pradhan returned advance of Rs. 1,00,000 which was taken for purchasing vehicle and his advance cleared. d) 2074-07-09 Accountant, Miss Rupa Adhikari returned cash Rs. 20,000 to office which was taken for purchasing uniform and cleared her advance. Required: Journal vouchers PP-7 Following transactions of a government office are given: a) 2074-04-13 Accountant, Miss Sujila Rai submitted the bill of Rs. 10,000 after purchasing the furniture and her advance was cleared. b) 2074-04-28 Nayab Subba, Mr. Ashish Khadka presented the expenditure bill of Rs. 50,000 after purchasing plant and equipment and his advance was cleared. c) 2074-05-21 Section Officer, Mrs. Rama Silwal submitted the expenditure bill of Rs. 1,25,000 taken for buying vehicle and her advance was cleared accordingly. d) 2074-05-29 Mr. Rajan Basnet presented a bill of Rs. 30,000 after purchasing computer and his advance was cleared. e) 2074-06-03 Miss Smriti Baniya submitted the statement of expenditure for other programme Rs. 13,000 and her advance was cleared accordingly. Required: Journal vouchers (AGF No. 10) PP-8 Following transactions of a government office are given: a) 2074-05-10 Section Officer, Mrs. Sarika Kafle presented the bill of Rs. 13,000 against the advance of Rs. 14,000 for purchase of office material and cash for balance amount and her advance was cleared. b) 2074-05-25 Kharidar, Shree Krishna Limbu submitted the bill of Rs. 45,000 and bank voucher of Rs. 5,000 after purchasing computer and printer and his advance was cleared. c) 2074-06-01 Mr. Ananda Dhakal submitted the bill of Rs. 20,000 after purchasing food materials and his advance of Rs. 22,000 was cleared after submitting the bank voucher for the surplus amount. Journal Voucher 253

d) 2074-06-09 Skill development and public awareness training and seminar expenses advance of Mr. Khanal Rs. 16,000 has been cleared against the bill of Rs. 15,000 and bank voucher of Rs. 1000. e) 2074-06-27 Mr. Anish Mahat submitted the bill of Rs. 1,15,000 for purchase of motorcycle and his advance Rs. 1,20,000 cleared by submitting the bank deposit slip of Rs. 5,000. Required: Journal vouchers PP-9 Following transactions are given: a) 2074-05-22 Mr. Bindukar presented the office material purchase bill of Rs. 17,000 against the advance of Rs. 15,000 and his advance was cleared by issuing cheque for the excess expenditure. b) 2074-05-29 Section Officer, Mr. Dilip Pandey presented the bill for purchase of feeding materials Rs. 28,000 against the advance of Rs. 25,000 and his advance cleared by issuing cheque for the insufficient amount. c) 2074-06-13 Cleared the computing machine purchase advance of Mr. Gopal Gupta of Rs. 18,000 on the basis of expenditure report of Rs. 19,000. d) 2074-07-09 Production material advance of Miss Januka Wagle of Rs. 30,000 was cleared by issuing cheque of Rs. 2,000. e) 2074-07-13 Office supplies advance of Ms. Benisha Hamal Rs. 10,000 cleared on the basis of expenditure report of Rs. 11,500. Required: Journal vouchers PP-10 Following transactions of an operating level government office are given: a) Kharidar Mr. Yogesh Kumal presented a bill of Rs. 7,000 after purchasing office materials and his advance cleared. b) Furniture purchase advance Rs. 20,000 of Mr. Mohan Mahat (Accountant) was cleared against the bill for purchase of furniture Rs. 17,000. c) Motorcycle purchase advance Rs. 1,20,000 of Mr. Himal Sharma has been cleared against the bill of Rs. 1,16,000 and bank voucher Rs. 4,000. d) Mr. Yogesh Rai submitted the repair expenses report of Rs. 4,000 and pay in slip for the balance of Rs. 500 and his advance cleared accordingly. e) Mr. Binod Shrestha submitted the bill of Rs. 8,000 after purchasing computer table and his advance Rs. 6,000 cleared by issuing cheque for the insufficient amount. Required: Journal vouchers 254 Office Management and Accountancy

PP-11 Following transactions of a government office were given to you: a) 2074-04-01 Received bank order of Rs. 1,00,000 for initial revolving fund as one sixth of the actual expenditure of last fiscal year. b) 2074-04-02 Received an initial imprest fund equal to one sixth of total budget expenditure Rs. 24,00,000 of last fiscal year. c) 2074-04-05 Received a bank order letter of Rs. 3,00,000 for initial imprest fund. d) 2074-05-07 Received bank order of Rs. 75,000 for additional revolving fund. e) 2074-04-01 Received Rs. 1,50,000 as revolving fund through bank transfer. f) 2074-04-01 Received Rs. 4,00,000 for revolving fund as bank transfer from the Treasury and Comptroller Office, Mugu. Required: Journal vouchers PP-12 Following transactions are given to you: a) 2074-05-02 Received budget release order and bank order for Rs. 2,50,000 for the actual expenditure of previous month. b) 2074-06-01 Received budget release order and bank order of Rs. 5,00,000 on the basis of monthly expenditure report. c) 2074-07-04 Received a bank order for Rs. 3,10,000 and budget release order for Rs. 2,50,000 for the expenditure of Aswin. d) 2074-08-02 District Education Office, Nuwakot received a bank order for Rs. 4,00,000 and budget release order for Rs.3,00,000 for the actual expenditure of Kartik. e) 2074-09-01 Received a bank order for Rs. 4,50,000 and a budget release order Rs. 5,00,000 for actual expenditure of the previous month. f) 2074-10-01 District Health Office, Solukhumbu received a bank order for Rs. 2,00,000 and budget release order for Rs. 1,50,000 for the actual expenditure of last month. Required: Journal vouchers PP-13 Following transactions of an operating level government office are given: a) Department of Education received Rs. 4,00,000 as revolving fund through Nepal Rastra Bank. b) Abudget release order has been received for the last month’s actual expenditure of Rs. 3,00,000. c) Received bank order of Rs. 1,00,000 as additional revolving fund. Journal Voucher 255

d) Received a bank order for Rs. 5,00,000 and a budget release order Rs. 6,00,000 for the actual expenditure of last month. e) Received a bank order of Rs. 4,50,000 and budget release order for Rs. 3,50,000 for the actual expenditure of last month. Required: Journal vouchers PP-14 Following transactions of District Tax Office, Bhaktapur are given to you: a) 2074-04-03 Established petty cash fund of Rs. 5,000 by issuing cheque No. 12594 in the responsibility of Junior Accountant, Miss Sujita Lamsal. b) 2074-05-10 Issued a cheque of Rs. 2,000 in the name of Accountant Mr. Sujan K.C. for establishment of petty cash fund. c) 2074-07-01 Issued a cheque for establishment of petty cash fund amounting Rs. 1,000. d) 2074-09-02 Established the petty cash fund in favour of the Storekeeper, Miss Ruja Chhetri amounting Rs. 5,000. e) 2074-12-02 Issued a cheque of Rs. 3,000 for establishment of petty cash fund and handed it over to the Petty Cashier Miss Juliya Magar. Required: Journal vouchers PP-15 Following transactions are given to you: a) 2074-05-03 Issued a cheque for reimbursement of following petty expenses made from petty cash fund: Taxi fare Rs. 195 Tea and coke Rs. 225 Telephone charges Rs. 200 Postal tickets Rs. 90 b) 2074-06-05 A cheque was issued for reimbursement of the following expenditures made out of petty cash fund: Refreshment Rs. 220 E-mail charges Rs. 120 Wages for repair Rs. 250 Tea and coffee Rs. 180 c) 2074-07-01 Issued a cheque of Rs. 700 for reimbursement of following petty expenses made by the petty cashier: Postal stamps Rs. 240 Bus fare Rs. 150 Newspaper Rs. 50 Electricity charges Rs. 260 d) 2074-08-09 The following expenses are submitted by the Petty Cashier for reimbursement: Water supply charges Rs. 200 Refreshment Rs. 260 Medical treatment Rs. 300 Repair expenses Rs. 190 The above petty expenses were reimbursed. Required: Journal vouchers 256 Office Management and Accountancy

PP-16 Following transactions are given to you: a) 2074-04-28 District Education Office, Mugu distributed salary through cheque after deducting Rs. 12,000 for provident fund, Rs. 10,000 for provident fund loan and Rs. 1,000 for income tax out of the total salary Rs. 66,000. b) 2074-05-27 Out of total salary Rs. 44,000 and dearness allowance Rs. 20,000, distributed by cheque after deducting Rs. 8,000 for provident fund and Rs. 1,800 for income tax. The deducted amounts were deposited into the concerned offices on next day. c) 2074-06-30 Salary for the month Rs. 77,000 (including government contribution) and local allowance Rs. 30,000 were distributed after deducting provident fund Rs. 14,000 and income tax Rs. 2,000. The deducted amounts were deposited into the concerned office on the same day. d) 2074-07-29 Issued a cheque of Rs. 69,500 for distribution of salary for the month after deducting Rs. 18,000 for provident fund, Rs. 10,000 for Tejarath Sapati and Rs. 1,500 for income tax. e) 2074-08-29 Salary for the month Rs. 50,000 (excluding government contribution) was distributed after deducting provident fund as per rules including government contribution and income tax Rs. 1,000. Required: Journal vouchers (AGF No. 10) PP-17 Following transactions of a government office were given to you: a) 2074-04-29 Out of total salary Rs. 1,10,000 and field allowance Rs. 30,000, distributed after deducting Rs. 20,000 for provident fund, Rs. 13,000 for provident fund loan and Rs. 2,000 for income tax by cheque. The deducted amounts were deposited into the concerned office on the following day. b) 2074-05-28 Issued a cheque of Rs. 71,500 for distribution of salary for the month after deducting Rs. 16,000 for provident fund and Rs. 500 for income tax. The deducted amounts were deposited in to concerned office on the same day. c) 2074-06-27 Salary for the month Rs. 1,65,000 (including government contribution) has been distributed through cheque after deducting provident fund Rs. 30,000 and Tejarath Sapati Rs. 10,000. d) 2074-07-28 Salary for the month Rs.1,40,000 (excluding government contribution) has been distributed after deducting provident fund as per rules including government contribution and Rs. 2,000 for income tax. Journal Voucher 257

e) 2074-07-29 Salary for the month Rs. 1,30,000 (excluding government contribution), and festival allowance Rs. 1,00,000 were distributed after deducting provident fund as per rules. Required: Journal vouchers PP-18 The following transactions of a government office are given: a) 2074d-04-01 Received loan Rs. 2,00,000 from District Health Office through bank. b) 2074-05-07 District Education Office received loan Rs. 1,00,000 from District Agricultural Office through bank. c) 2074-05-08 Loan Rs. 2,00,000 repaid to District Health Office through cheque. d) 2074-06-01 District Education Office Palpa repaid loan amount Rs. 1,00,000 to District Agriculture Office through bank. e) 2074-07-02 District Irrigation Office, Rasuwa requested and received loan of Rs. 75,000 from District Education Office through bank. Required: Journal vouchers PP-19 The following transactions of a government office are given: a) District Health Office, Nuwakot transferred Rs. 10,000 from the budget head salary to furniture. b) District Development Office, Chitwan transferred Rs. 25,000 from the budget head books and materials to machinery and equipment. c) District Education Office, Sarlahi transferred Rs. 20,000 from the budget head furniture to vehicles. d) District Agriculture Office, Tanahun transferred Rs. 50,000 to District Administration Office through bank. e) District Education Office, Rukum transferred Rs. 35,000 to District Health Office through bank . Required: Journal vouchers PP-20 The following transactions are given: a) 2074-04-25 Received the security deposit amount for construction of building from the contractor Mr.Ram Hari Dahal Rs. 20,000 and Mr.Hari Gopal Shrestha Rs. 22,000. b) 2074-07-30 Issued cheque of Rs. 1,90,000 in favour of contractor Ram Hari for payment of building construction after deducting 5% for security deposit. 258 Office Management and Accountancy

c) 2074-08-10 On completion of building construction, the security deposit amount of Rs. 30,000 refunded to contractor Mr. Ram Hari through cheque. d) 2074-09-01 Received the security deposit amount for construction of office building from the contractors Mr.Suraj Nepal, Saroj Baidhya and Nabin Thapa Rs. 15,000, Rs. 16,000 and Rs. 14,000 respectively. e) 2074-10-04 Issued a cheque of Rs. 95,000 in favour of the contractor for road pavement after deducting 5% for deposit. f) 2074-10-05 The security deposit amount of Rs. 17,000 refunded to the contractor Mr. Ashish Basnet through cheque. Required: Journal vouchers PP-21 Prepare journal vouchers of District Education Office, Baitadi from the following transactions.: a) 2074-04-01 Received Rs. 2,00,000 as revolving fund through Nepal Rastra b) 2074-04-05 Bank transfer. c) 2074-04-09 Mamata Furniture Industry was paid Rs. 18,000 for furniture purchase through cheque No. 094817. d) 2074-04-25 Section Officer, Mr. Ramakanta Silwal was paid Rs. 30,000 e) 2074-04-26 in advance for the purchase of computer by cheque No. 094818. f) 2074-04-30 Telephone charges Rs. 1,800 was paid to Nepal Telecom by cheque No. 094819. Computer purchase advance of Section Officer Mr. Ramakanta Silwal was cleared on the basis of bill of Rs. 28,000 and bank voucher of Rs. 2,000. Out of total salaries for the month Rs. 66,000, distributed by cheque after deducting provident fund Rs. 12,000 and income tax Rs. 1,600. The deducted amounts were deposited into concerned office on the same day. PP-22 Prepare journal vouchers of District Administrative Office, Solukhumbu from the following transactions: a) 2074-05-02 Received a bank order for Rs. 3,50,000 and budget release order Rs. 4,00,000 for the actual expenditure of last month. b) 2074-05-07 Issued a cheque of Rs. 7,000 for purchase of office supplies. c) 2074-05-09 Issued a cheque for Rs. 35,000 to Ms. Reshma Limbu, an Accountant as an advance for purchase of furniture. d) 2074-05-13 Miss Rajani Nepal submitted the bill for Rs. 15,000 after purchasing production material and her advance of Rs. 13,000 cleared by issuing a cheque for the insufficient amount. e) 2074-05-15 Issued a cheque of Rs. 1,500 for establishment of petty cash fund. f) 2074-05-30 Issued a cheque of Rs.69,000 for distribution of salary for the Journal Voucher 259

month after deducting Rs.18,000 for provident fund, Rs. 10,000 for Tejarath Sapati and Rs. 2,000 for income tax. PP-23 Prepare general vouchers of District Education Office, Dhankuta from the following transactions: a) 2074-07-02 Received a bank order for Rs. 3,00,000 and a budget release order for Rs. 2,75,000 for the actual expenditure of Aswin. b) 2074-07-05 Acheque of Rs. 5,000 was issued for the payment of communication charges. c) 2074-07-06 Section officer, Mr. Dilip Humagain returned a bank voucher of Rs. 10,000 to office which was taken for purchasing food materials and cleared his advance accordingly. d) 2074-07-10 Issued a cheque of Rs. 735 for reimbursement of following petty expenses paid by petty cash fund. Electricity charges Rs. 180 Tea and coffee Rs. 195 Taxi fare Rs. 210 Internet expenses Rs. 150 e) 2074-07-28 Out of the total salary Rs. 88,000 and allowance Rs. 40,000, distributed after deducting Rs. 16,000 for provident fund and Rs. 1,900 for income tax. f) 2074-07-30 The provident fund and income tax were deposited into concerned offices by cheque.  260 Office Management and Accountancy

Ref.N. (2) Particulars 9 BANK CASH BOOK(3bA)e ftLaebrCedmebobdblxsbaoaaeeheetpnnsfojruenaitc(lkkknnocad4trp.tieii)iccyo:ibnntvaaDbineessnegtarhhh.sttrgnhh.eO(bbktee5ahooBc)biccooiamaCocsjkklsoeanrpch...Cnusch(oi6cbnaadrte)osttipesavDhortnmekera(.crt7sa,eai)ontioCnhndftesra.bsfritao(nea8nrCBaet)ekddpahen.ircuNterkasnsposBd.ha(wa9rel)iiranlBlngacle. (10B).H.NE.(x1p1Ae) nBmduti.dt(u1gr2eeG)tiven Advance No.(15M)Disrc.(e1l6la)nCer.ous  post the various tranactions into bank (1C3l)eared A/c cash book. (14) Introduction (17) Every operating level government offices deal with a number of financial transactions daily. Such transactions are recorded first in journal voucher.According to the provision made under new accounting system, cash receipt and cash payment should be done through bank. However, there are more chances of misuse and misappropriation of cash items and thus requires proper control. Considering this fact, a ledger book is maintained in all government offices which is called bank cash book. It maintains the record of cash receipt and cash payment which are done either in cash or through cheque. Bank Cash Book 261

Concept and definition Bank cash book is a subsidiary ledger which is maintained mainly with a view to minimize the misuse and embezzlement of cash in government offices. It is also called multi-columned ledger as it contains altogether seventeen columns under five different accounts. The accounts maintained in bank cash book are cash account, bank account, budget expenditure account, advance account and miscellaneous account. Bank cash book is prepared on the basis of journal voucher. It is prepared under the format prescribed by the Office of the Auditor General i.e. AGF No. 5. Bank cash book is a multi-columned ledger prepared by the operating level government offices to keep records of cash and banking transactions to minimize the chances of misuse and manipulation of cash. Specimen of bank cash book The specimen of bank cash book is given below: Government of Nepal A.G.F.No.5 ……………Office/Department/Ministry Bank Cash Book Date Ref.N. Particulars Cash Bank Balance Budget Advance Miscellaneous Remarks Balance Expenditure (1) (2) (3) Dr. Cr. Dr. Cr. Ch.No. Bal. B.H.N. Amt. Given Cleared A/c No. Dr. Cr. (17) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) (16) Explanation of each columns contained in bank cash book is given below: S.N. Column Information to be written 1. Date The date of financial transaction is written. 2. Reference number The serial number or code number of journal voucher is 3. Particulars recorded. 4. Cash balance (Dr.) 5. Cash balance (Cr.) A brief narration of the transaction is mentioned. 6. Bank balance (Dr.) Cash or cheque received is recorded. Payment made in cash is recorded. 7. Bank balance (Cr.) Cash deposited into bank or when bank amount of bank 8. Cheque number order received is recorded. 9. Balance Payment made through cheque is recorded. The number of cheque issued for payment is recorded. The current amount of bank balance after each deposit or issue of cheque is shown. 262 Office Management and Accountancy

10. Budget head no. The head or subhead number of budgeted transaction if any is recorded. 11. Budget expenditure The amount of budget expenditure is mentioned including (Amount) advance. 12. Advance given An amount of advance paid to any person or institution in 13. Advance cleared and head is recorded. 14. Miscellaneous An amount of advance cleared from any person or (Account no.) institution is mentioned. 15. Miscellaneous (Dr.) The code number used for any miscellaneous transaction 16. Miscellaneous (Cr.) is recorded. 17. Remarks The debit amount of miscellaneous account i.e. account other than cash, bank, budget expenditure and advance is recorded. The credit amount of miscellaneous account i.e. account other than cash, bank, budget expenditure and advance is recorded. This column was originally used to mention the additional information of transaction which was not mentioned in other columns. Nowadays, in this column, the information relating to advance clearance of last year is mentioned. Objectives of bank cash book Following are the main objectives of preparing bank cash book:  To maintain the systematic record of cash and banking transactions.  To maintain the effective control over cash and minimize the chances of misuse and manipulation of it.  To provide financial information for preparation of financial reports and statements.  To facilitate in estimation of cash requirement and disbursement.  To disclose the position of cash and bank balance, budget expenditure, advance and other miscellaneous transactions. Importance of bank cash book Bank cash book is a major subsidiary book to be prepared by the operating level offices. Its importance for the office are described below: a. Effective control over cash Bank cash book maintains the systematic record of cash and banking transactions. All the cash and banking transactions of government offices are recorded in this Bank Cash Book 263

book. Thus, it helps to maintain the effective control over cash and minimizes the chance of misuse and embezzlement of cash. b. Estimation of cash requirement Cash is a major factor for the operation of an M Toffice. It is needed for day to day operation of emory ips an office. Its shortage or excess holding both  Effective control over cash are harmful for the office. Thus, it requires  Estimation of cash requirement to estimate the proper amount of cash  Supply of financial information requirement and disbursement. Bank cash  Detection and prevention of errors  Support in transfer of responsibility book helps to estimate the future requirement of cash in order to meet the budget expenditure. It also helps to estimate funds for future planning of an office. c. Supply of financial information Bank cash book provides various financial information to the concerned offices. It discloses the information about cash and bank balance, budget expenditure, advance payment and clearance etc. Thus, it facilitates for the preparation of various financial statements and reports. d. Detection and prevention of errors Bank cash book is prepared under double entry concept of accounting. It assumes the every transaction affects two sides i.e. debit and credit with equal amount. It is generally totalled and closed at the end of each month. A trial balance can be prepared to ascertain the arithmetical accuracy of the books of account. Hence, it helps to detect and prevent the accounting errors. e. Support in transfer of responsibility The government employees are transferred from one place to another or promoted to upper level. During the period of transfer or promotion, he/she should handover the financial responsibility to others. Bank cash book provides the details of all financial transactions. Thus, it makes easier in transferring responsibility. Types of account under bank cash book The various accounts maintained under bank cash book are described below: a. Cash account Cash account is the first account maintained in bank cash book. It has two columns i.e. debit and credit. The debit column is used to record cash receipts and the credit column is used to record payments made in cash. However, all the transactions of government offices are performed through cheque and it may not require to post in cash account. 264 Office Management and Accountancy

b. Bank account Memory Tips Bank account contains four columns i.e. debit, credit, cheque number and balance. All the  Cash account cash receipts through bank are recorded in  Bank account the debit column and all the payments made  Budget expenditure account by issuing cheque are recorded in the credit  Advance account column. The cheque number of the transaction  Miscellaneous account is mentioned in cheque number column. After posting of each banking transaction i.e. either on debit or credit, balance is determined and shown on balance column. c. Budget expenditure account The expenditures made on different budget heads are recorded on budget expenditure account. It has two columns i.e. budget head number column and amount column. Budget head number of transactions is shown in budget head number column and amount of related budget expenditure is shown in amount column. The amount of advance given in any budget head is also recorded in this account as it is also assumed as actual expenditure until its clearance. As it has a single column to record amount, the credit amount relating to expenditure if any, is shown in bracket. d. Advance account Advance account is the fourth account of bank cash book. It has two columns i.e. advance given and cleared column. The advance given to any person on particular head is recorded in advance given column and at the time of clearance, it is recorded in advance cleared column. e. Miscellaneous account The transactions which are not related to cash, bank, budget expenditure and advance account are recorded under miscellaneous account. It contains three columns i.e. account number, debit and credit column. The account number is recorded in account number column, the debit amount of transaction is recorded in the debit column and the credit amount of transaction is recorded in credit column. The transactions relating to imprest fund, budget release, petty cash fund, security deposit, loan, provident fund, income tax etc. come under this heading. Considerable points for preparation of bank cash book Following are the important points to be considered while preparing a bank cash book:  Firstly the journal vouchers should be prepared for all the financial transactions.  Before posting the transactions into bank cash book, the types of account i.e. cash account, bank account, budget expenditure, advance account or miscellaneous account should be identified.  The transactions should be posted in chronological order. Bank Cash Book 265

 The account debited in journal voucher should be posted in debit column of concerned account in bank cash book and the account credited in journal voucher should also be posted in credit column.  The transaction relating to advance given should be posted in three accounts i.e. budget expenditure, advance and bank account.  While clearing advance, the actual expenditure should be shown in budget expenditure account and the advance cleared amount should be kept in bracket under same account.  The transactions which are not related to cash, bank, budget expenditure and advance should be posted under miscellaneous account.  The transactions which do not affect the cash and bank balance like inter head transfer of budget should not be posted into bank cash book.  Every transactions should affect two accounts in bank cash book as it follows the principle of double entry book keeping system.  The trial balance should be prepared at the end of month to prove the arithmetical accuracy of books of account. Posting of transactions into bank cash book After preparation of journal voucher for all the financial transactions, they are posted into bank cash book. The types of journal voucher and their posting into bank cash book is mentioned below: a. Posting of general or budgeted transactions b. Posting of advance transactions c. Posting of miscellaneous transactions Posting of general or budgeted transactions The general or budgeted transactions include the payments made in different budget heads like salary, rent, furniture, machinery and equipment etc. While preparing journal voucher for general transaction, concerned budget head should be debited and Nepal Rastra Bank should be credited. Thus, it affects the budget expenditure account and bank account as follows: Ill-1 Prepare journal voucher of the following transaction and post it into bank cash book. 2074 - 04 -07 Issued a cheque of Rs. 5,000 for purchase of office supplies: Solution: Journal Voucher Date: 2074-04-07 a) Date Particulars L.F. B.H.No. Debit Rs. Credit Rs. Dr. B.E. Office related expenses 22311 5,000 Cr. Nepal Rastra Bank (Being cheque issued for purchase of office supplies) 5,000 266 Office Management and Accountancy

b) Bank Cash Book Ref. Cash Bank balance Budget Advance Miscellaneous Remarks Date Particulars Bal. Dr. Cr. Ch.N. expenditure Dr. Cr. Bal. B.H.N. Amt. A/c Dr. Cr. N. Given Cleared N. 2074- Issued cheque for purchase of office 5,000 22311 5,000 04-07 supplies Posting of advance transactions The transactions relating to advance should be recorded in journal voucher twice i.e. at the time of giving advance and at the time of clearing advance. The transactions should also be posted into bank cash book accordingly. It is discussed below: While giving advance At the time of giving advance to any official staff, name of the person receiving advance with the concerned budget head is debited and Nepal Rastra Bank is credited in journal voucher. Thus, it affects advance account, budget expenditure account and bank account as follows: Ill-2 Pass journal voucher for the following advance given transaction and post into bank cash book: 2074-04-09 Issued a cheque No. 5937 of Rs. 10,000 in favour of Nayab Subba, Mr. Raman Goyal as an advance for purchase of furniture. Solution: Journal Voucher Date: 2074-04-09 Date Particulars L.F. B.H.No. Debit Rs. Credit Rs. Dr. Subba, Mr. Raman Goyal 29311 Furniture advance 10,000 Cr. Nepal Rastra Bank 10,000 (Being cheque Issued to Subba Mr. Raman Goyal as an advance for purchase of furniture) Bank Cash Book Ref. Cash Bank balance Budget Advance Miscellaneous Remarks N. Bal. Dr. Cr. Ch.N. expenditure Date Particulars A/c Dr. Cr. Bal. B.H.N. Amt. N. Given Cleared Dr. Cr. 4-9 Issued cheque to Subba Mr. Raman Goyal as an advance for purchse of furniture 10,000 29311 10,000 10,000 Bank Cash Book 267

While clearing advance The amount of advance given to staff may be cleared under different conditions. It may be expenditure equal to advance, expenditure more than advance, expenditure less than advance or return of whole advance amount. Such clearance of advance is recorded in journal voucher and posted into bank cash book as follows: Ill-3 Pass journal vouchers for the following transactions and post them into bank cash book: a) If Subba Mr. Raman Goyal returned whole amount through bank voucher. b) If Subba Mr. Raman Goyal submitted the expenditure bill of Rs. 10,000. c) If Subba Mr. Raman Goyal submitted the furniture purchase bill of Rs. 9,000 and pay in slip for the balance amount. d) If Subba Mr. Raman Goyal submitted the statement of expenditure Rs. 12,000. e) If Subba Mr. Raman Goyal submitted the statement of expenditure Rs. 5,000 and his advance was cleared partially. Solution: a) Journal Voucher Date Particulars L.F. B.H.No. Debit Rs. Credit Rs. Dr. Nepal Rastra Bank 10,000 Cr. Subba Mr. Raman Goyal Furniture advance clearance 10,000 (Being furniture advance of Mr. Goyal cleared by returning whole amount) Bank Cash Book Ref. Cash Bank balance Budget Advance Miscellaneous Remarks N. Bal. Dr. Cr. Ch.N. expenditure Date Particulars A/c Dr. Cr. Bal. B.H.N. Amt. N. Given Cleared Dr. Cr. a) Mr. Goyal’s advance 10,000 29311 (10,000) 10,000 cleared returning whole Journal Voucher b) amount Date Particulars L.F. B.H.No. Debit Rs. Credit Rs. Dr. B.E. Furniture Cr. Subba Mr. Raman Goyal 29311 10,000 Furniture advance clearance (Being Mr. Goyal’s advance cleared on the basis 10,000 of expenditure bill) Bank Cash Book Ref. Cash Bank balance Budget Advance Miscellaneous Remarks N. Bal. Dr. Cr. Ch.N. expenditure Date Particulars A/c Dr. Cr. Bal. B.H.N. Amt. N. Given Cleared Dr. Cr. b) Mr. Goyal’s advance cleared 10,000 10,000 on the basis of expenditure 29311 (10,000) bill 268 Office Management and Accountancy

(c) Journal Voucher Date Particulars L.F. B.H.No. Debit Rs. Credit Rs. Dr. B.E. Furniture 29311 9,000 Dr. Nepal Rastra Bank Cr. Subba Mr. Raman Goyal 1,000 Furniture advance clearance (Being Mr. Goyal’s advance cleared on submission of 10,000 expenditure bill and pay in slip) Bank Cash Book Ref. Cash Bank balance Budget Advance Miscellaneous Remarks N. Bal. Dr. Cr. Ch.N. expenditure Date Particulars A/c Dr. Cr. Bal. B.H.N. Amt. N. Given Cleared Dr. Cr. c) Mr. Goyal’s advance 1,000 29311 9,000 10,000 cleared on the basis of (10,000) expenditure bill and pay in slip (d) Journal Voucher Date Particulars L.F. B.H.No. Debit Rs. Credit Rs. 29311 12,000 Dr. B.E. Furniture 10,000 Cr. Subba Mr. Raman Goyal 2,000 Furniture advance clearance Cr. Nepal Rastra Bank (Being Mr. Goyal’s advance cleared by issuing cheque for insufficient amount) Bank Cash Book Cash Bank balance Budget Advance Miscellaneous Remarks Bal. expenditure Date Ref. N. Particulars Ch. A/c Dr. Cr. N. Bal. B.H.N. Amt. N. Dr. Cr. Given Cleared Dr. Cr. d) Mr. Goyal’s advance 2,000 29311 12,000 10,000 cleared by issuing cheque (10,000) for insufficient amount (e) Journal Voucher Date Particulars L.F. B.H.No. Debit Rs. Credit Rs. Dr. B.E. Furniture 29311 5,000 5,000 Cr. Subba Mr. Raman Goyal Furniture advance clearance (Being Mr. Goyal’s advance cleared partially) Bank Cash Book Cash Bank balance Budget Advance Miscellaneous Remarks Bal. Dr. Cr. Ch.N. expenditure Date Ref. N. Particulars A/c Dr. Cr. Bal. B.H.N. Amt. N. Given Cleared Dr. Cr. 29311 5,000 d) Mr. Goyal’s advance (5,000) 5,000 cleared partially Bank Cash Book 269

Short Notes to Remember (SNR 9.1)  Though the advance given amount is not an actual expenditure, it is assumed as expenditure until its clearance and posted in budget expenditure account.  Whatever the condition of advance clearance is, the actual expenditure is shown outside the bracket and advance cleared amount is shown inside the bracket under budget expenditure account.  The amount of advance cleared always should be equal to the amount of advance given except in partial clearance. Posting of miscellaneous transactions The transactions other than cash, bank, budget expenditure and advance are called miscellaneous transactions. It includes imprest fund, budget release, petty cash fund, provident fund, income tax etc. While posting transactions related to miscellaneous head, if it is debited in journal voucher it should be posted in debit column of miscellaneous account and if it is credited in journal voucher, it should be posted in credit column of miscellaneous account. The process of posting miscellaneous transactions is made clear by the following illustrations: Ill-4 Following are the transactions of District Education Office, Kailali: a) Received a cheque for initial revolving fund equal to one sixth of the budget expenditure of Rs. 24,00,000 during the last fiscal year. b) Received bank order and budget release order for Rs. 2,00,000 for the expenditure of last month. c) The total salary Rs. 33,000 has been distributed after deducting provident fund Rs. 6,000 and income tax Rs. 2,000. d) The deducted amounts were deposited into concerned offices by cheque. e) Established the petty cash fund in favour of the Junior Accountant, Miss Anita Karki amounted Rs. 5,000. Required: a) Journal vouchers b) Posting into bank cash book Solution: Journal Vouchers a) Date Ref. N. Particulars L.F. B.H.No. Debit Rs. Credit Rs. a) Dr. Nepal Rastra Bank 4,00,000 Cr. Initial revolving fund 4,00,000 (Being bank order received for release of revolving fund) 21111 2,00,000 2,00,000 b) Dr. Nepal Rastra Bank 33,000 6,000 Cr. Budget release 2,000 (Being budget release order and bank order received) 25,000 c) Dr. B.E. Salary Cr. Provident fund Cr. Income tax Cr. Nepal Rastra Bank (Being cheque issued for distribution of salary) 270 Office Management and Accountancy

d) Dr. Provident fund 6,000 8,000 Dr. Income tax 2,000 5,000 Cr. Nepal Rastra Bank 5,000 (Being deducted amounts were deposited into concerned offices through cheque) e) Dr. Petty cash fund Cr. Nepal Rastra Bank (Being establishment of petty cash fund in favour of Junior Accountant, Miss Anita) b) Bank Cash Book Ref. Cash Bank balance Budget Advance Miscellaneous Remarks N. Bal. expenditure Date Particulars A/c Dr. Cr. Dr. Cr. Ch.N. Bal. B.H.N. Amt. Given Cleared N. Dr. Cr. a) Received bank order for 4,00,000 4,00,000 4,00,000 initial revolving fund b) Received bank order and budget release order for the expenditure of last 2,00,000 6,00,000 2,00,000 month 6,000 2,000 c) Issued cheque for 25,000 5,75,000 21111 33,000 6,000 distribution of salary 2,000 d) Deduction from 5,000 salary deposited into concerned offices 8,000 5,67,000 e) Establishment of petty 5,000 5,62,000 cash fund in favour of Junior Accountant Miss Anita Preparation of a trial balance Bank cash book is prepared by applying the principles of double entry system. After completion of posting all the journal vouchers into cash bank book, the trial balance can be prepared at the end of month in order to check the arithmetical accuracy. Its format is as follows: Trial Balance As on ………. S.N. Accounts L.F. Debit Rs. Credit Rs. 1. Cash account ××× ××× 2. Bank account ××× ××× 3. Budget expenditure account ××× 4. Advance account ××× - 5. Miscellaneous account............................................................................. ××× ××× ××× ××× Total.......................................................................................................... ××× Short Notes to Remember (SNR 9.2)  If there is difference of amount between advance given column and cleared column, a trial balance will not be equal and in such case, the difference of trial balance must be equal to the difference of advance given and cleared column. Bank Cash Book 271

Ill-5 The following are the financial transactions of District Education Office, Morang: a) Kartik 1 Bank balance Rs. 29,000. b) Kartik 3 Received budget release order and bank order for the actual expenditure of last month Rs. 2,30,000. c) Kartik 7 Issued a cheque for Rs. 10,000 to Rojina Furniture Center for purchasing furniture. d) Kartik 14 Issued a cheque of Rs. 25,000 in favour of Section Officer, Mr. Shrestha as an advance for purchase of machinery. e) Kartik 28 Distributed salary of the month through cheque after deducting Rs. 14,000 for provident fund and Rs. 2,000 for income tax, out of total salary including government contribution to staff provident fund of Rs. 77,000. Required: a) Journal vouchers b) Posting into bank cash book c) Trial balance Solution: Journal Voucher a) Date Particulars L.F. B.H.No. Debit Rs. Credit Rs. Kartik 3 Dr. Nepal Rastra Bank 2,30,000 2,30,000 Cr. Budget release Kartik 7 (Being budget release order and bank order received) 29311 10,000 Dr. B.E. Furniture 10,000 Cr. Nepal Rastra Bank (Being cheque issued to Rojina Furniture Centre for purchasing furniture) Kartik 14 Dr. Section Officer Mr. Shrestha 29511 25,000 Kartik 28 Machinery advance 25,000 Cr. Nepal Rastra Bank (Being cheque issued to Mr. Shrestha as advance for 21111 77,000 purchasing machinery) Dr. B.E. Salary 14,000 Cr. Provident fund 2,000 Cr. Income tax 61,000 Cr. Nepal Rastra Bank (Being distribution of salary after deducting provident fund and income tax) 272 Office Management and Accountancy

b) Bank Ca sh Book Ref. Cash Budget Advance Miscellaneous Remarks Date Particulars Bank balance expenditure Given Cleared A/c Dr. Cr. N. Bal. Bal. B.H.N. Amt. Dr. Cr. Dr. Cr. Ch.N. N. 7-1 a) Balance b/d 29,000 7-3 b) Budget release order and bank 2,59,000 order received 2,30,000 2,30,000 7-7 c) Furniture purchased and 10,000 2,49,000 29311 10,000 7-14 d) payment made by cheque Issued cheque to Mr. shrestha as an advance for purchase of 25,000 2,24,000 29511 25,000 25,000 machinery 7-28 e) Issued cheque for distribution of 61,000 1,63,000 21111 77,000 14,000 salary 2,000 Total 2,30,000 96,000 1,63,000 1,12,000 25,000 2,46,000 c) Trial Balance L.F. Debit Rs. Credit Rs. S. N. Accounts -- 1. Cash in hand ......................................................................................... 2. Cash at bank ......................................................................................... 2,30,000 96,000 3. Budget expenditure ............................................................................... 4. Advance ................................................................................................ 1,12,000 - 5. Miscellaneous......................................................................................... 25,000 - 2,46,000 Total........................................................................................................ 3,67,000 3,42,000 Closing of bank cash book All operating level offices have to close their bank cash book at the end of every month as well as at the end of every fiscal year. Therefore, monthly closing and yearly closing should be made by an office after preparing bank cash book. The short description relating to both types of closing is given below: - Monthly closing After getting the budget in the form of revolving fund or on four monthly basis by operating level office from central level offices, they have to submit a statement of bank cash book to their respective offices. It has to be done regularly at the end of each month. Bank cash book is such a book which provides detail information regarding revenue, expenditure and balance of cash and bank at the end of month. In order to close the bank cash book at the end of month, all the columns of bank cash book except bank balance are totaled to find out the result of each account. There a trial balance can be prepared for checking arithmetical accuracy. This procedure is known as monthly closing. Bank Cash Book 273

Yearly closing The fiscal year of all government offices starts from 1st Shrawn and ends at Ashadh last. So, all the government offices after preparing statements have to close their books of account at the end of fiscal year. As such, bank cash book is also closed at the end of Ashadh by passing closing voucher which is known as yearly closing of bank cash book. For this, first of all, it is necessary to close the petty cash fund depositing the remaining cash balance at bank. After that, all accounts like imprest fund, budget release, uncleared advance etc. are closed by preparing closing voucher. The closing is done by making all the columns totaled to find out the position of each account. After the bank cash book is closed, all operating level offices have to submit the bank cash book as well as other reports and statements to the central level offices. Short Notes to Remember (SNR 9.3)  Monthly closing is the process of closing bank cash book at the end of each month by making total of amount columns under all the accounts in order to get the financial information in each account.  Yearly closing is the process of closing bank cash book at the end of each fiscal year by closing all the accounts and passing closing voucher. REVIEW ILLUSTRATIONS Ill-6 The following are the financial transactions of District Education Office, Janakpur for the month of Shrawan 207: a) Shrawan 1 Received a bank order for initial imprest fund equal to one sixth of total budget expenditure Rs. 18,00,000 of last fiscal year. b) Shrawan 3 Issued a cheque of Rs. 20,000 for purchase of office supplies. c) Shrawan 7 Issued a cheque of Rs. 25,000 in favour of Section Officer, Mr. Rajan Kumal for purchase of office furniture. d) Shrawan 10 Issued a cheque of Rs.1,000 for establishment of petty cash fund in favour of Accountant, Miss Devika. e) Shrawan 18 Mr. Rajan Kumal presented a bill of Rs. 25,000 after purchasing furniture and his advance was cleared. f) Shrawan 24 Out of total salary of the month Rs. 1,32,000 including government contribution to provident fund and dearness allowance of Rs. 40,000, distributed by cheque after deducting Rs. 24,000 for provident fund, Rs. 15,000 for provident fund loan and Rs. 2,000 for income tax. g) Shrawan 25 The deducted amounts were deposited into concerned offices through cheque. Required: Posting into bank cash book 274 Office Management and Accountancy

Solution: Government of Nepal AGF. No. 5 District Education Office, Janakpur Bank Cash Book For the month of Shrawan Ref. Cash Bank balance Budget Advance Miscellaneous Remarks N. Bal. Cr. Ch.N. expenditure Date Particulars A/c Dr. Cr. Bal. B.H.N. Amt. N. Dr. Given Cleared Dr. Cr. 4-1 Bank order received for revolving fund release 3,00,000 3,00,000 3,00,000 4-3 Issued a cheque for purchase of office supplies 20,000 2,80,000 29311 20,000 4-7 Furniture purchased advance given to Section Officer, Mr. Rajan Kumal 25,000 2,55,000 29311 25,000 25,000 4-10 Issued a cheque for establishment 1,000 2,54,000 1,000 of petty cash fund 4-18 Mr. Rajan Kumal’s advance cleared 29311 25,000 25,000 (25,000) 4-24 Issued cheque for distribution of salary and allowance 1,31,000 1,23,000 21111 1,32,000 24,000 41,000 21113 40,000 15,000 4-25 Deducted amounts were deposited 2,000 into concerned offices through cheque 82,000 24,000 15,000 2,000 Total 3,00,000 2,18,000 82,000 2,17,000 25,000 25,000 42,000 3,42,000 Ill-7 The following are the financial transactions of District Health Office, Mugu: a) Ashwin 1 Received loan Rs. 40,000 from District Education Office, Humla. b) Ashwin 3 Payment made by cheque Rs. 10,000 for dress materials. c) Ashwin 4 Received a bank order for Rs. 14,00,000 and a budget release order Rs. 13,50,000 for actual expenditure of last month. d) Ashwin 6 Opened L/C in the name of Toyata Company Japan for purchase of motor car of Rs. 10,00,000 for office use. e) Ashwin 9 Paid Rs. 5,000 for house rent by cheque. f) Ashwin 14 Section Officer, Mrs. Priya Rana presented the machinery purchase bill of Rs. 30,000 against the advance of Rs. 28,000 and her advance was cleared by issuing cheque for the excess expenditure. g) Ashwin 20 Repaid loan Rs. 40,000 to District Education Office, Humla h) Ashwin 25 Issued a cheque of Rs. 53,000 for distribution of salary for the month after deducting Rs. 12,000 for provident fund and Rs. 1,000 for income tax. Required: Posting into bank cash book Bank Cash Book 275

Solution: Government of Nepal AGF. No. 5 District Health Office, Mugu Bank Cash Book For the month of Aswin Ref. Cash Bank balance Budget Advance Miscellaneous Remarks N. Bal. Cr. Ch.N. expenditure Date Particulars A/c Dr. Cr. Bal. B.H.N. Amt. N. Dr. Given Cleared Dr. Cr. 6-1 a) Loan received 40,000 40,000 40,000 6-3 b) Issued cheque for dress 10,000 30,000 21121 10,000 13,50,000 6-4 c) materials 50,000 6-6 d) Received bank order and 14,00,000 14,30,000 6-9 e) budget release order 10,00,000 4,30,000 29411 10,00,000 10,00,000 Opened L/C in the name of 5,000 4,25,000 22121 5,000 Toyata Company Paid rent by cheque 6-14 f) Section officer Mrs. Priya 2,000 30,000 28,000 6-20 g) Rana’s advance cleared 40,000 4,23,000 29511 (28,000) 6-25 h) Loan repaid to District 53,000 40,000 Education Office 3,83,000 12,000 Issued cheque for distribution 21111 66,000 1,000 of salary 3,30,000 Total 14,40,000 11,10,000 3,30,000 10,83,000 10,00,000 28,000 40,000 14,53,000 Ill-8 Following transactions are given to you a) Chaitra 1 Bank balance Rs. 20,000. b) Chaitra 3 Received bank order for Rs. 2,50,000 and budget release order for Rs. 3,00,000 for the expenditure of Falgun. c) Chaitra 9 Mr. Janak returned travelling expenses advance of Rs. 5,000 through bank due to postponement of his travelling programme and his advance cleared. d) Chaitra 14 Issued a cheque for the reimbursement of following petty expenses; Communication charges Rs. 90 Tea and coke Rs. 200 Wages Rs. 300 Taxi fare Rs. 210 e) Chaitra 24 Issued a cheque of Rs. 76,000 to the contractor for the construction of road after deducting 5% contract tax. f) Chaitra 25 Payment made by cheque Rs. 6,000 for water supply charges and Rs. 3,000 for telephone charges. g) Chaitra 29 Total salary of the month Rs. 99,000 (including government contribution) and local allowance of Rs. 20,000 were distributed through cheque after deducting Rs.18,000 for P.F. and Rs. 1,500 for income tax. Required: Posting into bank cash book 276 Office Management and Accountancy

Solution: Government of Nepal AGF. No. 5 ………… Office/Department Bank Cash Book For the month of Chaitra Ref. Cash Bank balance Budget Advance Miscellaneous Remarks N. Bal. expenditure Date Particulars Dr. Cr. Dr. A/c Cr. Ch.N. Bal. B.H.N. Amt. Given Cleared N. Dr. Cr. 20,000 12-1 a) Opening balance b/d 12-3 b) Received bank order and budget 2,50,000 2,70,000 50,000 3,00,000 5,000 2,75,000 22612 (5,000) 12-9 c) release order 5,000 1 2 - d) Mr. Janak’s advance cleared 22112 90 14 Issued cheque for reimbursement 22711 200 2,74,200 21111 300 of petty cash fund 22311 210 1 2 - e) Issued cheque to contractor for 800 1,98,200 29611 80,000 4,000 construction of road 24 Issued cheque for water supply 76,000 1,89,200 22111 6,000 18,000 1 2 - f) charges and telephone charges 9,000 22112 3,000 1,500 99,500 25 89,700 21111 99,000 21112 20,000 1 2 - g) Issued cheque for distribution of 29 salary and allowance Total 2,55,000 1,85,300 89,700 2,03,800 5,000 50,000 3,23,500 Key Terms Advance account – account used to maintain the record of advance given and cleared transactions. Bank account – account use to record the banking transactions Bank cask book – multi-columned ledger prepared by operating level offices Budget expenditure account – account used to maintain the record of transactions relating to budget expenditure. Cash account – account used to record the transactions relating to cash receipt and cash payment. Miscellaneous account – account used to keep the record of transactions other than cash, bank, budget expenditure and advance. Monthly closing – process of totalling all the amount columns of all the accounts of the bank cash book. Yearly closing – process of closing all the accounts at the end of fiscal year by preparing closing voucher. Bank Cash Book 277

A. Very short answer questions 1. What is bank cash book? 2. Write is the AGF No. of bank cash book. 3. How many accounts are there in bank cash book? 4. State the columns maintained under bank balance of bank cash book. 5. Why is bank cash book called multi columned ledger? 6. How many columns are there in a bank cash book? 7. Which accounts are affected in bank cash book while giving advance? B. Short answer questions 1. Define bank cash book and explain its importance for government offices. 2. Mention the considerable points for preparing bank cash book. 3. What do you mean by closing of bank cash book? Describe the way of closing it. C. Long answer questions 1. Define bank cash book and explain the various accounts maintained in it. 2. “Bank cash book is also called multi-columned ledger.” Justify this statement. PRACTICAL PROBLEMS(PP) PP-1 Following information relating to Land Revenue Office, Saptari are given: a) 2074-04-01 Received a bank order for Rs. 2,00,000 as initial revolving fund release. b) 2074-04-03 Issued a cheque number 0954 of Rs. 10,000 for purchase of office materials. c) 2074-04-09 Issued a cheque of Rs. 16,000 to Subba, Mr. Saroj Thapa as an advance for purchase of furniture. d) 2074-04-16 Established the petty cash fund in favour of the Accountant , Miss Sujata Thapa amounting Rs. 5,000 through cheque. e) 2074-04-26 Out of total salary for the month Rs. 88,000, deducted provident fund Rs.16,000 and income tax Rs.1,500 and balances were distributed through cheque. Required: a) Journal vouchers b) Posting into bank cash book Ans: b) Bank balance Rs. 98,500 PP-2 Prepare journal vouchers from the following transactions and post them into bank cash book of District Health Office, Kaski: a) 2074-04-02 Received a bank order of Rs. 3,00,000 for initial imprest fund release. b) 2074-04-04 Issued a cheque in favour of Kharidar, Mamata Kandel as an advance Rs.35,000 for purchase of computer. 278 Office Management and Accountancy

c) 2074-04-07 Purchased furniture for Rs. 5,000 and issued cheque for the same. d) 2074-04-10 Created petty cash fund of Rs. 5,000 through cheque No. 19456. e) 2074-04-30 Out of total salary for the month Rs.1,10,000 distributed after deducting provident fund Rs. 20,000 and income tax Rs.2,000 through cheque. PP-3 Ans: Bank balance Rs. 1,67,000 Pinrteopbaraenjkoucarsnhalbvoooukcohferasgforovmernthmeefnotlloofwficine:g transactions and post them Ashwin 1 Balance at bank Rs. 25,000. Ashwin 3 Received budget release order and bank order for the actual expenditure of last month Rs. 2,10,000. Ashwin 17 Issued a cheque of Rs. 79,000 to Account Officer, Mrs. Purnima Lama for purchase of production materials. Ashwin 26 A cheque of Rs. 3,000 was issued for payment of electricity charges. Ashwin 28 Issued a cheque of Rs. 78,000 for distribution of salary for the month after deducting Rs. 18,000 for provident fund and Rs. 3,000 for income tax. Ashwin 29 Account Officer, Mrs. Purnima Lama presented the bill of Rs. 79,000 after purchasing the production materials and her advance cleared. PP-4 Ans: Bank balance Rs. 75,000 Post the following transactions into bank cash book of District Education Office, Morang: Marga 1 Balance at bank Rs. 20,000 Marga 4 Received budget release order and bank order for the actual expenditure of last month Rs. 1,50,000. Marga 10 Issued a cheque of Rs. 20,000 to Section Officer, Mr. Amit Phuyal for purchase of photocopy machine. Marga 21 Paid Rs. 7,000 for rent by cheque no. 3598 Marga 22 Section Officer, Mr. Amit Phuyal presented the bill of Rs. 20,000 after purchasing photocopy machine and his advance cleared Marga 29 Issued a cheque of Rs. 62,000 for distribution of salary for the month after deducting Rs. 14,000 for provident fund and Rs. 1,000 for income tax. Ans: Bank balance Rs. 81,000 PP-5 Prepare bank cash book from the following transactions of District Health Office, Sunsari: Kartik 1 Balance at bank Rs. 13,000. Kartik 3 Received bank order for Rs. 2,50,000 and budget release order for Rs. 3,25,000. Bank Cash Book 279

Kartik 17 Issued a cheque of Rs. 17,000 as travelling program expenses advance to Mr. Adhikari. Kartik 19 Mr. Adhikari returned travelling expenses advance of Rs. 17,000 through bank due to postponement of his travelling program and his advance is cleared. Kartik 29 Total salary for the month Rs. 1,43,000 (including government contribution) has been distributed through cheque after deducting P.F.Rs. 26,000 and income tax Rs. 2,500. Kartik 30 The deducted amounts were deposited into concerned offices through cheque. PP-6 Ans: Bank balance Rs. 1,20,000 From the following transactions of District Education Office, Bhaktapur for the month of Poush 2074, prepare bank cash book:: Poush 1 Bank balance Rs. 40,000. Poush 2 Received bank order for Rs. 1,90,000 and budget release order for Rs. 2,40,000. Poush 11 Issued a cheque of Rs. 22,000 in favour of Mr. Anup Karki as an advance for purchase of furniture. Poush 13 Mr Anup Karki returned advance of Rs. 22,000 to office through pay- in-slip and his advance cleared. Poush 28 Out of total salary for the month Rs.1,15,500 (including government contribution) distributed after deducting provident fund Rs. 21,000 and income tax Rs. 2,200. Poush 29 The deducted amounts were deposited into concerned office through cheque. Ans: Bank balance Rs. 1,14,500 PP-7 The following transactions are given: The following transactions are given: Bhadra 1 Balance at bank Rs. 50,000 Bhadra 2 Received bank order for Rs. 1,50,000 and budget release order for Rs. 1,25,000. Bhadra 9 Issued a cheque of Rs. 1,25,000 to Nayab Subba, Miss Deepa as an advance for purchase of motorcycle. Bhadra 15 Issued a cheque of Rs. 12,000 for purchase of office materials. Bhadra 19 Miss Deepa Lama presented the bill for purchase of motorcycle of Rs. 1,30,000 against the advance of Rs. 1,25,000 and her advance cleared by issuing a cheque for the insufficient amount. Bhadra 23 The following expenses made out of petty cash fund were reimbursed by issuing cheque: Repair and maintenance wages Rs. 200 Postage Rs. 210 Required: Posting into bank cash book Ans: Bank balance Rs. 57,590 280 Office Management and Accountancy

PP-8 Post the following transactions into bank cash book of District Education Office, Nuwakot: Falgun 1 Balance at bank Rs. 13,000 Falgun 4 Received a bank order for Rs. 1,25,000 and budget release order for Rs.1,00,000 Falgun 13 Issued a cheque of Rs. 30,000 to Storekeeper, Miss Dristi Ranjit as an advance for purchase of computer Falgun 16 The following expenses made from petty cash fund were reimbursed by issuing cheque: Newspaper Rs. 310, Tea and coke Rs. 215 Falgun 24 Miss Dristi Ranjit presented the bill for purchase of computer of Rs. 35,000 against the advance of Rs. 30,000 and his advance cleared by issuing cheque for excess expenditure. Falgun 27 Paid Rs. 5,000 through cheque no. 4896 for wages incurred for repair and maintenance. Ans: Bank balance Rs. 97,475 PP-10 Based on the following transactions, develop bank cash book (A.G.F. No. 5) of District Administration Office, Palpa for the month of Jestha: Jestha 2 Received a bank order of Rs. 2,00,000 equal to last month’s expenditure Jestha 3 Provident fund Rs. 10,000 and income tax Rs. 2,000 were deposited into concerned offices by cheque. Jestha 10 Issued a cheque of Rs. 22,000 to Accountant, Mr. Kapil Khadka as an advance for purchase of uniform. Jestha 14 Issued a cheque of Rs. 80,000 in favour of the contractor for the building construction. Jestha 17 Accountant, Mr. Kapil Khadka submitted the bill of Rs. 20,000 and bank voucher of Rs. 2,000 after purchasing uniform and his advance cleared. Jestha 25 Machinery purchase advance of Mr. Rana Rs. 23,000 was cleared against the bill for purchase of machinery Rs. 25,000. Ans: Bank balance Rs. 86,000 PP-11 Based on the following transactions, develop a bank cash book of District Education Office, Solukhumbu for the month of Baishakh: Baishakh 1 Received a bank order of Rs. 2,40,000 equal to last month’s expenditure. Baishakh 3 Purchased a motorcycle for Rs. 1,15,000 and issued a cheque for the same. Baishakh 7 Issued a cheque of Rs. 18,000 to Section Officer, Miss Sunita Basnet as an advance for purchase of fooding materials. Baishakh 16 Issued a cheque of Rs. 65,000 in favour of the Contractor, Mr. Hari for the road construction. Bank Cash Book 281

Baishakh 19 Section Officer, Miss Sunita Basnet submitted the bill of Rs. 17,000 and bank voucher Rs. 1,000 after purchasing feeding materials and cleared her advance. Baishakh 27 Mr. Hamal presented the furniture purchase bill of Rs. 4,000 and his advance cleared partially. Ans: Bank balance Rs. 43,000 PP-12 Post the following transactions into bank cash book of District Education Office, Mugu for the month of Bhadra 2074: Bhadra 1 Received loan Rs. 20,000 from District Health Office. Bhadra 3 Issued a cheque of Rs. 5,000 for fuel for vehicles. Bhadra 5 Received a bank order for Rs. 2,25,000 and budget release order Rs. 2,00,000 for actual expenditure of last month. Bhadra 10 Repaid the loan amount Rs. 20,000 to District Health Office by cheque. Bhadra 19 Mr. Manoj Sharma presented the bill for the purchase of machinery of Rs. 30,000 against the advance of Rs. 27,000 and his advance cleared by issuing a cheque for the insufficient amount. Bhadra 28 Out of total salary Rs. 85,000 and dearness allowance Rs. 20,000, distributed after deducting Rs. 15,000 for provident fund and Rs. 5,000 for tejarath sapati. Ans: Bank balance Rs. 1,32,000  282 Office Management and Accountancy

10 BUDGET SHEET Chapter Learning Objectives After studying this chapter, the readers will be able to :  define budget sheet and state its importance for government office.  describe the parts of budget sheet along with their usefulness.  post the transactions into budget sheet. Introduction Under the provision of new accounting system of government of Nepal, operating level offices make expenditures on various budget heads. Such expenditures should be made within the limitation of budget. The main objective of government is to maintain effective control over budget. For this purpose, each operating level office prepares a statement every month containing different heads of expenditure in columnar form which is known as budget sheet. It is a budgetary ledger to be prepared by government offices to show the annual appropriation, budget release and budget expenditures. Budget sheet provides the information about annual budget, budget release and budget expenditures in each budget head. It is considered as the effective tool for recording, controlling and reporting purpose. It is prepared with the help of journal vouchers and submitted to the concerned central level offices. It is prepared under the prescribed format of AGF No. 8. Budget Sheet 283

Concept and definition Budget sheet is a budgetary account of operating level government offices. It is a statement of annual appropriation, budget release and budget expenditure maintained under new accounting system. Budget sheet is a budgetary tool for all operating level government offices to maintain control over budget. It release and expenditures incurred under different budget heads and subheads. It is prepared with the help of journal vouchers of each financial transactions. It is prepared and submitted to the central level office at the end of each month. It is prepared under the prescribed format of AGF No 8. Budget sheet is a budgetary ledger to be prepared by operating level government offices in order to maintain the effective control over budget by providing information about annual budget, budget release and budget expenditures. Short Notes to Remember (SNR 10.1)  Budget sheet is prepared after preparation of journal vouchers.  While preparing budget sheet, all the columns may not be used at a time. The offices can use all or required columns of budget head as per the requirement.  It is a statement of annual appropriation, budget release and budget expenditure of operating level government offices. Importance of budget sheet The importance of budget sheet are given below.  It provides information about annual budget, budget release and budget expenditure under different budget heads.  It supplies the required information to the central level offices whether the operating level offices have spent budget within limitation or not.  It gives information about budget release, budget transfer and additional budget release during the period.  It serves as an important financial tool for controlling budget.  It facilitates for the preparation of various financial statements and reports.  It helps in preparation of budget and running financial administration. Parts of budget sheet A budget sheet contains the following three parts: Annual appropriation part Annual appropriation part is the first and upper part of budget sheet. It shows the total amount of budget approved for a fiscal year and its allocation under different 284 Office Management and Accountancy

budget heads and sub-heads. It determines the maximum limit of budget more than which the amount cannot be spent by the concerned offices. This part is filled up with the help of approval letter related to declaration of annual appropriation, sent by concerned central level offices of government. It does not require to prepare journal voucher to fill up in this part. It also maintains the record relating to supplementary budget release, inter office and inter head transfer of budget. Budget release part Budget release part is the second and middle part of the budget sheet. The information of total amount of budget release received out of the annual appropriation from the concerned central level is shown in this part. It shows the amount of budget release in each head and sub-heads till the date of its preparation. The information relating to imprest fund, supplementary budget release, additional imprest fund and inter head and inter office transfer of budget are also recorded in it. It is necessary to prepare journal voucher for the budget release transactions before posting them into budget sheet. While showing the amount of imprest fund, it is shown only in total column as it is provided without mentioning the budget head. It is closed at the end of each fiscal year by depositing the remaining amount in consolidated fund. The surplus budget on each head is shown within bracket in the concerned column. Budget expenditure part Budget expenditure part is the last and lower part of the budget sheet. All the expenditures made on different budget heads and sub-heads are recorded in this part. This part provides information about total amount of budget expenditures made out of release received under different heads and sub-heads. It also records the transactions relating to advance given and cleared. While giving advance, it keeps the record assuming actual expenditure until its clearance. While clearing advance, the actual expenditure is shown outside the bracket and amount of advance is shown inside the bracket. The petty cash expenses are recorded at the time of reimbursement. It does not record the transactions which are not related to budget heads. Thus, the transactions like establishment of petty cash fund, provident fund, income tax, citizen investment fund, loan, security deposit etc. are not recorded in it. In this part also, journal vouchers are required to be prepared for all the transactions. This part is closed at the end of each month making the total of each budget head. The total of previous month is added with the current month’s total to determine the grand total of each budget head till the preparation date. Budget Sheet 285

Rules for preparing budget sheet Following are the rules or procedures to be followed for preparing budget sheet :  Annual appropriation of budget should be recorded in annual appropriation part without preparing journal voucher.  Inter head transfer of budget and additional budget release should also be shown in annual appropriation part.  The amount of revolving fund and additional revolving fund should be recorded in budget release part only in total column as it has no allocation of budget.  The transactions related to budget expenditure should be recorded in budget expenditure part in order to date.  Advance given transaction should also be recorded in budget expenditure part assuming actual expenditure until and unless it is cleared.  While clearing the advance, the amount of actual expenditure should be shown outside the bracket and advance given amount should be kept inside the bracket.  The transactions relating to petty cash fund should be recorded only at the time of reimbursement.  Finally, the total of each column in budget release and budget expenditure part for a month should be obtained and added with the total till the last month to get the grand total till the period. Ill-1 You are provided the following information of District Education Office, Palpa: B.H. No. Budget head/sub-heads Annual budget Rs. Expenses upto Ashwin Rs. 21111 Salary......................................................................... 4,29,000 95,000 21121 Uniform....................................................................... 1,40,000 30,000 22112 Communication........................................................... 24,000 29311 Furniture..................................................................... 96,000 75,000 29511 Machinery................................................................... 2,00,000 2,00,000 5,00,000 Total............................................................................ 4,24,000 13,65,000 Kartik 1 Received budget release order for the actual expenditure of Ashwin and bank order for the same. Kartik 4 Issued a cheque of Rs. 15,000 for purchase of uniform. Kartik 9 Issued a cheque for Rs. 12,000 in favour of Nayab Subba , Mr. Shrestha as an advance for purchase of furniture. Kartik 18 Cleared Mr. Shrestha’s furniture purchase advance against the bill for purchase of the same. Kartik 29 Issued a cheque of Rs. 26,000 for distribution of salary for the month after deducting Rs. 6,000 for provident fund and Rs. 1,000 for income tax. Required: a) Journal vouchers b) Posting into budget sheet 286 Office Management and Accountancy

Solution: Journal Voucher Date: Kartik 4 a) Particulars L.F. B.H.No. Debit Rs. Credit Rs. Date 21121 Dr. B.E. Uniform 15,000 Cr. N.R. Bank (Being cheque issued for purchase of uniform) 15,000 Journal Voucher Date: Kartik 9 Date Particulars L.F. B.H.No. Debit Rs. Credit Rs. Dr. Nayab Subba Mr. Shrestha 29311 12,000 Furniture advance 12,000 Cr. N.R. Bank (Being cheque issued to Mr. Shrestha as an advance for purchase of furniture) Journal Voucher Date: Kartik 18 Date Debit Rs. Credit Rs. Particulars L.F. B.H.No. 29311 12,000 Date Dr. B.E. Furniture Cr. Nayab Subba Mr. Shrestha 12,000 b) Furniture advance clearance (Being Mr. Shrestha’s furniture purchase advance cleared) Journal Voucher Date: Kartik 29 Particulars L.F. B.H.No. Debit Rs. Credit Rs. 33,000 6,000 Dr. B.E Salary 21111 1,000 Cr. Provident fund 26,000 Cr. Income tax Cr. N.R. Bank (Being cheque issued for distribution of salary for the month) Government of Nepal AGF No.8 District Education Office, Palpa Budget Sheet Budget Head/Sub-heads Salary Uniform Communication Furniture Machinery 21111 B.H. No 13,65,000 4,29,000 21121 22112 29311 29511 Appropriation for the year 1,40,000 96,000 2,00,000 5,00,000 95,000 Budget transfer Release Date R.N. Particulars Total 30,000 24,000 75,000 2,00,000 7-1 Release upto Ashwin 4,25,000 7-4 Issued cheque for purchase of dress 15,000 15,000 materials Expenditure 7-9 Issued cheque to Mr. Shrestha as an advance 12,000 12,000 12,000 for purchase of furniture (12,000) 7-18 Mr. Shrestha’s advance 12,000 12,000 cleared (12,000) 7-29 Issued cheque for 33,000 33,000 distribution of salary Total expenditure of Kartik 60,000 33,000 15,000 Budget Sheet 287

Closing of budget sheet Operating level government offices close their budget sheet at the end of each month and finally at the end of the year after closing books of account. Thus, the budget sheet is closed in the following way: Monthly closing The process of closing the budget sheet at the end of each month is known as monthly closing. Monthly closing of budget sheet is done mainly with a view to determine the total amount of budget release and total amount of budget expenditure on different budget heads and sub-heads till the date. In order to close the budget release part, first of all the budget release on different heads and sub-heads for the current month are added. Then, the budget release under different budget heads and sub-heads up to previous month are added with the total of current month so that the total amount of budget release on different budget heads and sub-heads till the date are ascertained. In budget expenditure part too, same procedure is followed to make the monthly closing. Under this, the budget expenditures made on different budget heads and sub-heads for the current month is obtained. The total expenditure upto the previous month is added with the current month’s total to obtain the total amount of budget expenditure till the date. For monthly closing, journal vouchers are not required. Yearly closing The process of closing budget sheet at the end of each fiscal year by making closing voucher after closing all the books of account is called yearly closing of budget sheet. While closing the budget sheet on yearly basis, the total amount of budget expenditure is deducted from the total amount of budget released to find out the surplus if any. The surplus budget if any, is either deposited into consolidated fund or transferred to the next year. While making closing, total amount of budget release on different budget heads and sub-heads are shown inside the bracket. Similarly, the total amount of budget expenditure on different budget heads and sub heads are also shown inside the bracket that makes the budget release and budget expenditures equal. Short Notes to Remember (SNR 10.2)  The closing of annual appropriation part of budget sheet is not required.  The yearly closing of budget sheet is made by preparing closing voucher. 288 Office Management and Accountancy

Ill-2 The following information and transactions are given to you: B.H. Budget head/sub-head Annual budget Expenditure Expenditure of No. Rs. upto Falgun Chaitra Rs. Salary.......................................................................... 21111 Dearness allowances.................................................. 3,00,000 Rs. 22,000 21113 Water supply and electricity charges........................... 1,00,000 2,00,000 8,000 22111 Office related expenses............................................... 1,20,000 9,000 22311 Machinery.................................................................... 2,40,000 70,000 11,000 29511 Total............................................................................. 4,00,000 85,000 35,000 1,60,000 11,60,000 3,00,000 85,000 8,15,000 Baishakh 1 Received a bank order and budget release order for the actual expenditure of last month. Baishakh 10 Issued a cheque of Rs. 20,000 to Mr. Sharma as an advance for purchase of machinery. Baishakh 15 Paid by cheque Rs. 5,000 for electricity charges. Baishakh 18 Mr. Sharma submitted the bill for Rs. 18,000 and bank voucher of Rs. 2,000 after purchasing machinery and cleared his advance. Baishakh 25 Issued a cheque of Rs. 10,000 for purchase of office materials. Baishakh 30 Out of total salary including government contribution to provident fund Rs. 22,000 and dearness allowance of Rs. 8,000, distributed after deducting provident fund Rs. 4,000 and income tax Rs. 800. Required: Posting into budget sheet with monthly closing AGF No.8 Solution: Government of Nepal ……………….. Office Budget Sheet Budget Head/Subhead Salary Dearness Water supply Office Machinery allowance and electricity expenses B.H. No. Appropriation for the year 11,60,000 21111 29511 3,00,000 21113 charges 22311 4,00,000 1,00,000 2,40,000 22111 1,20,000 Release Budget transfer Total 2,00,000 70,000 85,000 1,60,000 3,00,000 Date R.N. Particulars 8,15,000 22,000 8,000 9,000 11,000 35,000 1-1 Release upto Chaitra 2,22,000 78,000 94,000 1,71,000 3,35,000 85,000 Release of Baishakh 9,00,000 Release upto Baishakh Budget Sheet 289

1-10 Issued cheque to Mr. Sharma 20,000 20,000 as an advance for purchase of 18,000 (20,000) machinery 1-15 Paid electricity charges by cheque 5,000 5,000 Expenditure 1-18 Mr. Sharma’s advance cleared 18,000 (20,000) 1-25 Purchased office material and 10,000 10,000 paid by cheque 1-30 Issued cheque for distribution of 30,000 22,000 8,000 salary and allowances Total expenditure of Baishakh 63,000 22,000 8,000 5,000 10,000 18,000 Total expenditure upto Chaitra 9,00,000 2,22,000 78,000 94,000 1,71,000 3,35,000 Total expenditure up to Baishakh 9,63,000 2,44,000 86,000 99,000 1,81,000 3,53,000 REVIEW ILLUSTRATIONS Ill-3 Post the following information and transactions into budget sheet of District Education Office, Rasuwa: B.H. No. Budget head/sub-head Annual budget Rs. 21111 Salary.............................................................................................................................. 3,60,000 21112 Local allowance............................................................................................................... 1,00,000 22111 Water supply and electricity charges............................................................................... 2,00,000 22311 Office related expenses.................................................................................................. 1,50,000 22121 House rent ...................................................................................................................... 3,00,000 29311 Furniture.......................................................................................................................... 1,60,000 Total ................................................................................................................................ 12,70,000 Shrawan 2 Received a bank order Rs. 2,00,000 as initial revolving fund release through bank transfer. Shrawan 5 Issued a cheque of Rs. 13,000 for purchase of office materials. Shrawan 9 Issued a cheque of Rs. 20,000 to Mr. Sohan Pant, Section Officer as an advance for purchase of furniture. Shrawan 26 Payment made by cheque Rs. 5,000 for water supply charges. Shrawan 27 Issued a cheque of Rs. 5,000 for establishment of petty cash fund. Shrawan 30 Out of total salary for the month of Rs. 66,000, distributed after deducting provident fund Rs. 12,000 and income tax Rs. 2,000. 290 Office Management and Accountancy

Solution: Government of Nepal AGF No.8 District Education Office, Rasuwa Budget Sheet Budget head/Sub head 12,70,000 Salary Local Water Office House Furniture B.H. No. Allowance supply and expenses Rent Appropriation for the year 21111 electricity 29311 3,60,000 21112 22311 22121 1,60,000 Budget transfer 1,00,000 charges 1,50,000 3,00,000 Date R.N. Particulars 22111 2,00,000 Release Total 4-5 Issued cheque for 13,000 13,000 4-9 purchase of office Expenditure 4-26 materials 20,000 5,000 20,000 4-30 5,000 20,000 Furniture purchase 66,000 66,000 – 5,000 13,000 – Ill-4 advance given to Mr. 1,04,000 66,000 Sohan pant Issued cheque for water supply charges Issued cheque for distribution of salary Total expenditure of Shrawan Post the following information and transactions into budget sheet of District Health Office, Bhaktapur: B.H. No. Budget head/sub-head Annual budget Expenditure upto Kartik Rs. Rs. 21111 Salary............................................................................ 4,80,000 1,60,000 21121 Uniform ......................................................................... 50,000 10,000 22112 Communication charges................................................ 1,80,000 60,000 22521 Production material........................................................ 2,00,000 50,000 29411 Vehicles......................................................................... 6,00,000 1,00,000 29511 Machinery...................................................................... 2,50,000 1,50,000 Total............................................................................... 17,60,000 5,30,000 Marga 3 Received a bank order and budget release order for the actual expenditure of last month. Marga 4 Purchased dress materials for Rs. 30,000 and paid by cheque. Marga 13 Kharidar, Mr. Binay Lamichhane returned production material purchase advance of Rs. 10,000 through bank and his advance cleared. Marga 19 Issued a cheque for reimbursement of following petty expenses E-mail and Trunk charges Rs. 300, Wages Rs. 200. Marga 23 Mr. Bikash Thapa presented the bill for the purchase of machinery of Rs. 30,000 against the advance of Rs. 28,000 and his advance cleared by issuing a cheque for the excess expenditure. Budget Sheet 291

Solution: Government of Nepal AGF No.8 District Health Office Budget Sheet Budget head/Sub head Production Salary Uniform Communication material Vehicles Machinery charges services B.H. No. 21121 22521 29411 29511 50,000 22112 2,00,000 6,00,000 2,50,000 Appropriation for the year 17,60,000 21111 1,80,000 Budget transfer 4,80,000 50,000 Release Date R.N. Particulars Total 1,60,000 10,000 60,000 (10,000) 1,00,000 1,50,000 8-3 Release upto Marga 5,30,000 (10,000) 8-4 Issued cheque for purchase 40,000 of office materials 30,000 30,000 8-13 Kharidar Binay Lamichhane’s (10,000) advance cleared Expenditure 8-19 Reimbursement of petty cash 500 200 300 fund 8-23 30,000 30,000 Mr. Bikash’s advance cleared (28,000) (28,000) Total expenditure of Marga 22,500 200 30,000 300 2,000 5,52,500 1,60,200 40,000 60,300 1,00,000 1,52,000 Total expenditure upto Marga Ill-5 Post the following information and transactions into budget sheet of Department of Education: B.H. No. Budget head / sub-heads Annual budget Expenditure upto Expenditure of Rs. Falgun Rs. Chaitra Rs. 21111 Salary....................................................... 2,40,000 1,50,000 20,000 22311 Office related expenses ........................... 96,000 60,000 7,000 22121 House rent................................................ 1,08,000 72,000 9,000 22212 Repair and maintenance.......................... 50,000 25,000 5,000 29511 Machinery................................................. 6,00,000 2,00,000 50,000 29611 Public construction................................... 5,00,000 3,00,000 50,000 Total.......................................................... 15,94,000 8,07,000 1,41,000 Baishakh 1 Received a bank order and budget release order of Rs. 1,41,000 for expenditure of last month. Baishakh 7 Issued a cheque of Rs. 38,000 in favour of the contractor for road pavement after deducting 5% contract tax. Baishakh 13 Section Officer, Mr. Shrestha submitted the bill for Rs. 5,000 after purchasing office supplies and his advance of Rs. 6,000 is cleared after submitting the bank voucher for the surplus amount. Baishakh 24 The budget of Rs. 5,000 was transferred from the head rent to repair and maintenance. Baishakh 30 Issued a cheque of Rs. 45,000 for distribution of salary for the month after 292 Office Management and Accountancy

deducting Rs. 10,000 for provident fund and Rs. 2,000 for income tax. The deducted amounts were deposited into concerned office on the same day. Baishakh 31 Opened L/C in the name of Korea Trading Company for purchase of printing machine for Rs. 40,000. Solution: Government of Nepal AGF No. 8 Department of Education Budget Sheet Budget head/Sub head Public construction Salary Office House Repair and and capital expenses rent maintenance Machinery improvement B.H. No Appropriation for the year 15,94,000 21111 22311 22121 22212 29511 29611 2,40,000 96,000 1,08,000 50,000 6,00,000 5,00,000 Release Budget transfer Total 1,50,000 60,000 (5,000) 5,000 2,00,000 3,00,000 20,000 7,000 50,000 50,000 Date R.N. Particulars 8,07,000 72,000 25,000 1,41,000 1,70,000 67,000 9,000 5,000 2,50,000 3,50,000 1-1 Release up to Chaitra 9,48,000 81,000 30,000 Release of Baishakh Release up to Baishakh 1-7 Issued cheque to contractor for road pavemnet 40,000 40,000 1-13 Section Officer Mr. Shrestha 5,000 5,000 (6,000) Expenditure advance cleared (6,000) 1-30 Salary distributed 57,000 57,000 1-31 Opened L/C in the name of Korea Trading Company 40,000 40,000 Total expenditure of Baishakh 1,36,000 57,000 (1,000) 81,000 30,000 40,000 40,000 Total expenditure upto Baishakh 10,84,000 2,27,000 66,000 2,90,000 3,90,000 Key – upper part of budget sheet used to show the total approved Terms amount of annual budget and its allocation on different Annual appropriation part heads and sub-heads. Annual closing – process of equalising total budget release with total budget Budget expenditure part expenditures at the end of fiscal year by preparing closing Budget release part voucher. Budget sheet – lower part of budget sheet used to show the record of expenditure made under different heads and sub-heads including advance. – middle part of budget sheet used to show the release of budget made by central level office on the basis of last month expenditure. – budgetary ledger prepared by operating level offices to maintain effective control over budget. Budget Sheet 293

A. Very short answer questions 1. What is budget sheet? 2. Write the AGF number of budget sheet. 3. State the parts of budget sheet. 4. What is annual appropriation of budget? 5. Why is budget sheet prepared? B. Short answer questions 1. What do you mean by budget sheet ? State any five advantages of preparing budget sheet in government offices. 2. Define budget sheet and mention six procedures for preparing budget sheet. 3. How is budget sheet closed ? Explain its monthly closing and annual closing. C. Long answer questions 1. Why is budget sheet prepared in government office? Describe its parts along with their usefulness. 2. Define budget sheet and write any six differences between bank cash book and budget sheet. PRACTICAL PROBLEMS(PP) PP-1 Post the following information and transactions into budget sheet of District Health Office, Palpa: Bhadra 1 The annual appropriation and expenditure upto Shrawan are shown below: B.H. No. Budget head/sub heads Annual budget Expenses upto Rs. Shrawan Rs. 21111 Salary................................................................................. 22311 Office related expenses...................................................... 2,40,000 20,000 22121 House rent.......................................................................... 96,000 6,000 29311 Furniture............................................................................. 12,000 29511 Machinery........................................................................... 1,44,000 10,000 2,00,000 50,000 4,00,000 Total.................................................................................. 10,80,000 98,000 Bhadra 3 Received a bank order and budget release order of Rs. 98,000 for expenditure of Shrawan. Bhadra 5 Issued a cheque of Rs. 5,000 for purchase of office materials. Bhadra 16 Issued a cheque of Rs. 20,000 in favour of Section Officer, Mr. Yogesh Shrestha as an advance for purchase of machinery. Bhadra 29 Out of total salary for the month of Rs. 19,800 distributed after deducting provident fund Rs. 3,600 and income tax Rs. 500. Bhadra 30 Section Officer, Mr. Yogesh Shrestha presented the bill of 20,000 after purchasing machinery and his advance cleared. 294 Office Management and Accountancy

PP-2 Post the following information and transactions into budget sheet: Ashwin 1 Annual budget and expenditure upto Bhadra were given below: B.H. No. Budget head/sub-heads Annual Expenses budget Rs. upto Bhadra 21111 Salary....................................................................................... 21121 Uniform..................................................................................... 4,00,000 Rs. 22111 Water supply and electricity charges........................................ 1,08,000 72,000 22122 Other rent................................................................................. 1,32,000 15,000 29411 Vehicles.................................................................................... 2,40,000 22,000 5,00,000 40,000 Total.......................................................................................... 13,80,000 1,00,000 2,49,000 Ashwin 2 Received a bank order and budget release order for the expenditure of last month. Ashwin 7 Issued a cheque of Rs. 8,000 for purchase of dress materials. Ashwin 10 Issued a cheque for Rs. 25,000 in favour of Mr. Gupta as an advance for purchase of vehicle. Ashwin 26 Mr. Gupta presented the bill of Rs. 22,000 after purchasing vehicle and his advance cleared. Ashwin 30 Out of total salary Rs. 33,000 (including government contribution) distributed after deducting provident fund for Rs. 6,000 and income tax Rs. 1,000. PP-3 Post the following information and transactions into budget sheet: B.H. Budget head / sub-heads Annual Expenditure Expenditure No. budget Rs. upto Ashwin of Kartik Rs. Salary............................................................................. 21111 Communication charge .................................................. 4,00,000 Rs. 30,000 22112 Repair and maintenance................................................ 72,000 80,000 6,000 22212 Production materials and service................................... 10,000 22521 Furniture......................................................................... 1,20,000 18,000 10,000 29311 Total............................................................................... 2,00,000 50,000 3,00,000 30,000 1,06,000 10,92,000 50,000 2,00,000 3,78,000 Marga 2 Received a bank order and budget release order for the expenditure of last month. Marga 5 Issued a cheque for Rs. 13,000 to Accountant, Miss Rojina Sharma as an advance for the purchase of office furniture. Marga 7 Issued a cheque of Rs. 6,000 for purchase of production materials. Marga 13 Miss Rojina Sharma presented the bill of Rs. 7,000 and her advance was cleared by issuing cheque for the excess expenditure. Marga 29 Issued a cheque of Rs. 21,500 for distribution of salary for the month after deducting Rs. 5,000 for provident fund and Rs. 1,000 for income Budget Sheet 295

PP-4 tax. The deducted amounts were deposited into concerned office on the same day. Post the following transactions into budget sheet: B.H. No. Budget head/sub-heads Annual budget Rs. Expenditure upto Expenditure of Magh Rs. Falgun Rs. 21111 Salary................................................. 5,00,000 22312 Feeding materials............................... 1,40,000 2,00,000 40,000 22311 Office related expenses...................... 1,80,000 56,000 10,000 22711 Miscellaneous expenses.................... 75,000 15,000 29411 Vehicles.............................................. 72,000 25,000 5,000 9,00,000 1,00,000 Total.................................................... 17,92,000 2,00,000 1,70,000 5,56,000 Chaitra 1 Received a bank order and budget release order for the expenditure of last month. Chaitra 5 An advance for Rs. 90,000 is given to Mr. Nepal, Section Officer for purchase of motorcycle through cheque. Chaitra 16 Issued a cheque Rs. 3,000 for purchase of feeding materials. Chaitra 15 Section Officer, Mr. Nepal presented the bill of Rs. 95,000 after purchasing motorcycle and his advance cleared by issuing cheque for the excess amount. Chaitra 29 Issued a cheque of Rs. 30,000 for distribution of salary for the month after deducting Rs. 7,000 for provident fund and Rs. 1,500 for income tax. The deducted amounts were deposited to concerned offices on the following day. PP-5 Post the following information and transactions into budget sheet: B.H. Budget head/Sub-heads Annual No. budget Rs. Salary...................................................................................................................................... 21111 Fuel.......................................................................................................................................... 6,50,000 22211 Medicine.................................................................................................................................. 2,40,000 22531 Books and materials................................................................................................................ 22313 Machinery and equipment....................................................................................................... 96,000 29511 Total......................................................................................................................................... 1,24,000 15,00,000 26,10,000 Shrawan 2 Received a bank order for Rs. 3,00,000 for initial revolving fund release. Shrawan 5 Issued a cheque of Rs. 5,000 for establishment of petty cash fund in favour of Junior Accountant, Miss Rubina Tamang. Shrawan 13 An advance is given to the Section Officer, Mr. Bhaju Pradhan for purchase of books and sport materials by cheque Rs. 9,000. 296 Office Management and Accountancy

Shrawan 17 A cheque of Rs. 10,000 was issued for payment of purchase of medicine. Shrawan 20 Section Officer, Mr. Bhaju Pradhan submitted the bill of Rs. 8,000 and bank voucher of Rs. 1,000 after purchasing books and sport material and cleared his advance. Shrawan 31 A cheque issued for reimbursement of petty cash fund for the following expenses: Wages Rs. 290, Transportation charge for medicine purchase Rs. 310 PP-6 Post the following information and transactions into budget sheet: B.H. No. Budget head/Sub- heads Annual budget Rs 21111 Salary................................................................................................................ 7,20,000 22112 Communication charge...................................................................................... 2,40,000 22311 Office related expenses..................................................................................... 1,50,000 22521 Production materials and service...................................................................... 3,00,000 29311 Furniture............................................................................................................ 1,00,000 Total................................................................................................................... 15,10,000 Shrawan 1 Received a bank order letter of Rs. 2,00,000 for initial imprest fund release. Shrawan 4 Petty cash fund for Rs. 1,000 created in the responsibility of Assistant Accountant, Miss Ramala Subba. Shrawan 12 Issued a cheque for Rs. 12,000 to Storekeeper, Mr. Bhupal Rai as an advance for purchase of production materials. Shrawan 25 Payment made by cheque Rs. 7,000 for telephone charges. Shrawan 27 Mr. Bhupal Rai submitted the bill of Rs. 10,000 and bank voucher for balance amount after purchasing production materials and his advance cleared. Shrawan 30 Following expenses made from petty cash fund were reimbursed by issuing a cheque: Postage Rs. 90 Pen and ink Rs. 260 E-mail charges Rs. 190. PP-7 You are given the following information: Ashwin 1 The annual appropriation and expenditure upto Bhadra are shown below: Budget head/Sub- heads Annual budget Rs. Expenditure upto Bhadra Rs. Salary ............................................................................ 6,00,000 90,000 1,92,000 32,000 Office related expenses .................................................... ........ 2,00,000 20,000 Production materials and service .................................. 3,00,000 50,000 12,00,000 4,00,000 Furniture........................................................................ 24,92,000 5,92,000 Public construction ....................................................... Total ............................................................................. Budget Sheet 297

Ashwin 2 Received a bank order and budget release order for the actual expenditure of last month Ashwin 7 Issued a cheque to Kharidar, Mr. Rupesh Hamal for Rs. 8,000 an advance for purchase of production materials. Ashwin 10 Received security deposit amount for construction of bridge from the Contractor, Mr. Abuj Karki Rs. 25,000 and Mr. Manoj Tamang Rs. 26,000. Ashwin 20 Kharidar, Mr. Rupesh Hamal returned production material purchase advance through bank voucher and his advance cleared. Ashwin 30 Issued a cheque of Rs. 2,37,500 in favour of the contractor for construction of bridge after deducting 5% contract tax. Required: Posting into budget sheet.  298 Office Management and Accountancy

11 MONTHLY Chapter STATEMENTS Learning Objectives After studying this chapter, the readers will be able to :  define monthly statements and mention their types.  write the meaning and objectives of statement of expenditure.  prepare the statement of expenditure.  state the meaning of statement of outstanding advance.  mention the objectives of bank reconciliation statement.  define the statement of government revenue and statement of security deposit. Introduction Under new accounting system of government of Nepal, each operating level offices require to prepare a number of financial statements and reports periodically. Such statements and reports should be submitted to the central level offices regularly in order to report on financial matters. The statements which are prepared by operating level offices on monthly basis are called monthly statements. Every operating level office is supposed to prepare and submit such statements to respective central level offices at the end of each month. These statements provide financial data and information regarding budget release, budget expenditure, uncleared amount of advance, amount of governmental revenue, amount of security deposit received etc. According to the nature and types of monthly statement, they provide different financial information. Monthly statements include statement of expenditure, statement of outstanding advance, bank reconciliation statement, statement of governmental revenue and statement of security deposit etc. Monthly Statements 299

Concept and definition Monthly statements are the financial statements be prepared by all operating level government offices at the end of month and submitted to the central level offices. According to the nature of financial transactions, different monthly statements are prepared in government offices. These statements include statement of expenditure, monthly statement of outstanding advance, bank reconciliation statement, statement of governmental revenue and statement of security deposit. These statements provide information for various purposes. They support to maintain financial discipline and control over the financial activities of operating level offices. Monthly statements are the financial documents prepared by the operating level government offices on monthly basis and submitted to the concerned central level offices disclosing the various financial data and information. Importance of monthly statements Monthly statements are very important financial documents to be prepared by operating level offices on regular basis. Those statements provide various useful financial data and information. Though the different monthly statements provide different financial information, common importance of all types of monthly statement can be studied under the following points: a. Source of financial data and information M emory Tips According to the nature of monthly statements, they provide various financial data and  Source of financial data and information information. It includes budget release,  Controlling over budget budget expenditure, balance of budget, cash  Easy for auditing balance, bank balance etc. They also provide  Better evaluation of government jobs information relating to uncleared amount of  Effective financial decision  Administrative tool advances, position of fund, total amount of governmental revenue etc. Thus, the monthly statements are considered as the sources of financial data and information. b. Controlling over budget Monthly statements help to maintain control over budget. It gives clear information about the annual appropriation, budget release, amount spent and information about advance clearance. With the help of information provided by such statements or reports, all operating level offices make expenditures under various budget heads and sub-heads within the limitation of budget. 300 Office Management and Accountancy