Transcript

Preparing the Financial Preparing the Financial Records/Statements/Details- Records/Statements/Details- ECR/Valuable Register/Cash ECR/Valuable Register/Cash Book/Ledger/BRS/Receipt & Book/Ledger/BRS/Receipt &

Payment Account & Payment Account & Additional InformationAdditional Information

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Accounting basically means :The process of identifying, measuring, recording, classifying, summarising, analysing, interpreting and communicating the financial transactions and events in monetary terms.

OBJECTIVES OF ACCOUNTINGTo keep systematic records To ascertain the net effect of financial operation e.g. surplus or deficit To know the financial position of the institution for the Internal control To provide information to DGCA, MHRD and Parliament

Accounts broadly means reflection of

Receipts and Payments under the relevant & prescribed heads i.e. entering the classified Receipts & Payments and drawing Receipt & Payment Account , Income & Expenditure Account and Balance Sheet therefrom.

Receipts Payments Recoveries & Remittances

As and when a receipt is occurred or payment is made Voucher is to be created for each such transaction.

All these vouchers are to be entered in their respective control registers (valuable register in respect of receipts and expenditure control/advance register in respect of payments) before its required deposits and payments.

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CLASSIFICATION OF EXPENDITURE

The account will be classified under the broad classification heads indicating the expenditure programme-wise/activity-wise as per the heads precribed in the Budget estimates.

The correct classification of expenditure as well as receipt therefore, is of paramount importance and a pre-requisite for evaluation of the financial performance.

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Suitable instructions for ensuring proper classification may have to be issued to the subordinate offices for maintaining programme-wise expenditure details.

The bills submitted by the respective departments will be subjected to cent per cent scrutiny at the finance & accounts with reference to the transaction appearing in the supporting sub-voucher attached therewith so that correctness of the classification recorded is ensured and the results based thereon are reliable.

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Capital Expenditure and Revenue Expenditure

Capital Expenditure : All Non-recurring expenditure made for purchase of Capital (basically movable & immovable assets) items are called Capital Expenditure

For Example: Purchase of Land, Xerox Machine, UPS etc.

Revenue Expenditure : All Recurring expenditure for day to day maintenance of the Office are Revenue Expenditure

For example : Salary, Repair of equipment, Rent, Electricity charges, remuneration to staff etc.

IGNOU Regional CentreIGNOU Regional CentreBill Passing cum Expenditure Bill Passing cum Expenditure

Control RegisterControl Register

S. No.

Diary No. & Date of

Receipt of bill in

IGNOU, RC

Learner Support Centre where

from bill is

received

Name of Party/details of bill NO. & Date

Bill Amount

TDS

SD Net Amount Head of Account

Signature of AR/DR with

date

Cheque/DD No.

with date

Remarks

Valuable Register for Admission Valuable Register for Admission Section/Finance & Accounts Section/Finance & Accounts

Section at the Regional CentreSection at the Regional Centre

S. No. DD No. Date Amount

Bank Name

Name of Student

Programme

Date of Deposit

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CASH BOOK – FEES ACCOUNT/SALE OF FORM/OTHER RECEIPTS FROM STUDENTS

Month & Date

Vr. Particulars of receipts & from whom received

Receipt No.Chq/DD No.

Amt. Cash Bank Ledger folio.no

1-04-131-04-13 2R2R FeesFees 562134562134 10,00,0010,00,0000

-- IDBIIDBI 11

2-04-132-04-13 3R3R Sale of FormSale of Form 2645326453 5,0005,000 -- PNBPNB 22

3-04-133-04-13 4R4R Dup.I-CardDup.I-Card 8454184541 200200 -- SBISBI 33

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CASH BOOK REMITTANCE SIDECASH BOOK REMITTANCE SIDE

Month & Month & DateDate

Vchr.No.Vchr.No. ParticulaParticulars of rs of PaymentPayment

Chq.No/Chq.No/Advice Advice No.No.

Amt.Amt. CashCash BankBank Ledger Ledger Folio/PaFolio/Page No.ge No.

30-04-1330-04-13 9 P9 P Trnsfr. Trnsfr. To Hqtr.To Hqtr.

001001 10052001005200 -- IBIB 2424

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CASH BOOK – GRANT ACCOUNTCASH BOOK – GRANT ACCOUNTRECEIPTS SIDERECEIPTS SIDE

Month Month & Date& Date

Vchr.No.Vchr.No. Particulars Particulars of receipts of receipts & from & from whom whom receivedreceived

Receipt Receipt No.No.

Chq.No./Chq.No./

Credit Credit Adv.No.Adv.No.

AmtAmt CashCash BankBank Ledger Ledger Folio/PaFolio/Page No.ge No.

1-4-131-4-13 1-R1-R 11stst Qtrly. Qtrly. GrantGrant

112112 10000001000000 -- PNBPNB 55

30-4-1330-4-13 7-R7-R Int. from Int. from BankBank

120120 20002000 -- PNBPNB 66

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PAYMENT SIDEPAYMENT SIDE

Month Month & Date& Date

Voucher Voucher No.No.

Particulars Particulars of of paymentpayment

Chq.No.Chq.No. Amt.Amt. CashCash BankBank Ledger Ledger Folio/Page No.Folio/Page No.

2-4-132-4-13 3-P3-P RentRent 126567126567 1000010000 PNBPNB 77

5-4-135-4-13 4-P4-P Tel.ChrgsTel.Chrgs 824654824654 10001000 PNBPNB 77

All accounting units shall maintain the cash books, in the prescribed form i.e.

One for fee, Sale of Forms, other receipts

and another separately for applicable Plan & Non-Plan Grant Accounts.

As and when any receipt is occurred based on the deposit slips/credit advice by the Bank, a receipt voucher should be created and entered in the respective Cash Book.

Similarly if payment made by cheque/DD should be recorded in appropriate column on payment side after having created a voucher.

Any cash withdrawn by drawing self-cheques should be entered in the cash column on receipt side and appropriate bank column on payment side.

The Cash Book should be closed regularly at the end of the day on which a transaction occurs after having it completely checked.

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Bank Reconciliation StatementBank Reconciliation Statement A statement which reconciles the A statement which reconciles the

balance as per cash book and the balance as per cash book and the balance as per pass book showing all balance as per pass book showing all causes of difference between the twocauses of difference between the two

Causes of difference Causes of difference 1.1. Transaction that usually appear in the Transaction that usually appear in the

cash book, but not in the pass bookcash book, but not in the pass book2.2. Transactions that usually appear in the Transactions that usually appear in the

pass book, but not in the cash bookpass book, but not in the cash book

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Transactions that usually appear in Transactions that usually appear in the Cash Book but not in Pass the Cash Book but not in Pass

BookBook

Cheques/DDs deposited into bank but not Cheques/DDs deposited into bank but not yet collectedyet collected

Cheques/DDs issued but not yet Cheques/DDs issued but not yet presented for paymentpresented for payment

Cheques/DDs dishonored but no entry Cheques/DDs dishonored but no entry made in the cash bookmade in the cash book

Errors in the cash bookErrors in the cash book

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Causes of Errors Causes of Errors

Dr or Cr entry made twiceDr or Cr entry made twiceTransaction of Dr side entered on the Cr Transaction of Dr side entered on the Cr

side or vice versaside or vice versa In the case of more than one Bank A/c the In the case of more than one Bank A/c the

cheque/deposit is entered in the cheque/deposit is entered in the unconnected A/csunconnected A/cs

Error in BalancingError in Balancing

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Transactions that usually appear in Transactions that usually appear in the Pass Book but not in the Cash the Pass Book but not in the Cash

BookBook

Interest allowed by the BankInterest allowed by the BankAmounts collected/paid as per the Amounts collected/paid as per the

standing instructionsstanding instructionsBank ChargesBank ChargesErrors in the Pass bookErrors in the Pass book

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Causes of Errors in Pass BookCauses of Errors in Pass Book

Ommission of EntryOmmission of Entry

Recording of receipt & payment in the Recording of receipt & payment in the wrong side of A/cwrong side of A/c

Recording of receipt & payment which Recording of receipt & payment which belongs to some other A/cbelongs to some other A/c

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Format of Bank ReconciliationFormat of Bank Reconciliation Dr. Cr.Dr. Cr.

Balance as per cash bookBalance as per cash book AmtAmt --

Cheques issued but not paid by the Cheques issued but not paid by the bankbank

AmtAmt --

Interest given by the BankInterest given by the Bank AmtAmt --

Interest collected but not recorded in the Interest collected but not recorded in the Cash bookCash book

AmtAmt --

Cheque deposited but not collected by Cheque deposited but not collected by the Bankthe Bank

-- AmtAmt

Bank ChargesBank Charges -- AmtAmt

Errors in Cash Book/Pass BookErrors in Cash Book/Pass Book AmtAmt AmtAmt

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Amount received as per standing Amount received as per standing instructionsinstructions

AmtAmt --

Amount paid as per standing Amount paid as per standing instructionsinstructions

-- AmtAmt

Balance as per Pass bookBalance as per Pass book -- AmtAmt

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LedgerLedger

Ledger is a book containing all accounts Ledger is a book containing all accounts affected by various transactions in the affected by various transactions in the institution it could be termed as a classified institution it could be termed as a classified and summarized record of transactions and summarized record of transactions relating to all the head of Accounts.relating to all the head of Accounts.

LEDGERLEDGERRECEIPTS SIDERECEIPTS SIDE

Month & Month & DateDate

Vr. NoVr. No ParticularParticulars of s of receiptreceipt

GrantGrant FeesFees SOFSOF InterestInterest Other Other

FromFrom

StudentStudent

1-4-131-4-13 1-R1-R 11stst Qtrly. Qtrly. GrantGrant

10000001000000 55

1-4-131-4-13 2-R2-R FeesFees 10000001000000 99

2-4-132-4-13 3-R3-R Sale of Sale of formform

50005000 99

3-4-133-4-13 4-R4-R Dup.I.Dup.I.CardCard

200 10 200 10

7-4-137-4-13 7-R7-R Int. Int. BankBank

20002000 11 11

Cash book folio no.

LEDGER - PAYMENT SIDELEDGER - PAYMENT SIDE

Month & Month & DateDate

Vr.Vr.No.No.

Amt.Amt. RentRent Tel.ChargesTel.Charges RemittaRemittancesnces

Cash Cash Book Book Folio Folio No.No.

2-4-132-4-13 3-P3-P 1000010000 1000010000 22

5-4-135-4-13 4-P4-P 10001000 10001000 22

30-4-1330-4-13 9-P9-P 10052001005200 10052001005200 33

LEDGER MAINTENANCE

Head-wise Ledgers (for example T.A, Remuneration, etc.,) are to be maintained for all expenditure and for receipts (fees, sale of forms etc,) and thus each and every transaction are to be recorded in the ledgers mentioning the page no. in which the corresponding entry is made in the cash book. With the page no. of ledger.

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Monthly/Quarterly/Yearly Receipt & Monthly/Quarterly/Yearly Receipt & Payment AccountPayment Account

Basically subordinate unit’s accounts ends Basically subordinate unit’s accounts ends at the periodic preparation of Receipt & at the periodic preparation of Receipt & Payment Account which they are to send to Payment Account which they are to send to Headquarters Monthly/Quarterly/Yearly. Headquarters Monthly/Quarterly/Yearly. Only at the end of Financial year they are Only at the end of Financial year they are supposed to send the Additional information supposed to send the Additional information which are detailed aheadwhich are detailed ahead

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Accounting Systems

1.Cash Accounting- The cash basis accounting measures the flow of cash resources. It recognises transactions and events only when cash is received or paid.Financial statements produced under the cash basis of accounting cover cash receipts, cash disbursements, and opening and closing cash balances. A cash accounting system has the advantage of simplicity.Presently Regional centres are submitting Receipt and payment Account on cash basis and after additional information obtained from RC’s are merged at Hqrs, it is converted into Accrual Accounting.

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Accrual Accounting -

1.The accrual basis accounting recognises transactions and events when they occur irrespective of when cash is paid or received. 2. Revenues reflect the amounts that came due during the year, whether collected or not. 3. Expenses reflect the amount of goods and services consumed during the year, whether they are paid or not in that period. 4. The costs of assets are deferred and recognised when the assets are used to provide service.Expenses are the costs of goods and services consumed as well as any increase in liabilities or decrease in assets over the accounting period( e.g. depreciation and losses which can occur in the absence of any transactions also.

What & how the accounts are prepared at Headquarters

In this context, let us see the process as to what and how the accounts are prepared at headquarters.

Creation of vouchers in respect of receipt, occurs through cash/DD/IPO deposit, credit advice or receipt book and in respect of expenditure, occurs through cash/cheque/DD payment or debit advice. All these vouchers are to be routed through their respective control registers (valuable register in respect of receipts and expenditure control/advance register in respect of payments) before its respective deposit and payment.

Arranging the vouchers date/serial number-wise on a given date and checking them from the ODL generated Cash Book.

As the entries are automatically transferred to Ledgers. Hence the Trial Balance gets drawn there after.

Entering separately the quarterly accounts received from Regional Centers in MS-Excel after having the following check points :-

a) Opening Balances as on 1st April is as per the closing balance as on 31st March of the previous financial year

b) All Grants remitted by Hqrs are shown

c) Expenditure have been booked under proper heads

d) Recoveries made during the period have been duly remitted.

e) Head-wise/Sub-headwise totals are correct

f) Overall totalling is correct

g) The unspent balances tally with the Closing balances shown at the end of the respective period.

After carrying out, the checking of the subordinate office’s account / corrections (after the receipts of clarifications) the merger of accounting heads take place.

Preparation of quarterly Trial Balance, Income & Expenditure & Balance Sheet.

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All the above steps are for Monthly/Quarterly/Periodical Statements and at the end of respective financial year the cash accounts are converted to Accrual Accounts by adding the following additional information sought from the Schools, Divisions, Units.

1.Outstanding liabilities 2.prepaid expenses 3. Prior period expenses 4.Outstanding Income, if any 5.Closing stock held (Stationery, Study material ,Stamps, consumables and non-consumables stores etc.

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For this the following Additional For this the following Additional information is collected from information is collected from

Schools/Divisions/UnitsSchools/Divisions/Units

Prior Period Expenditure : : Expenditure made during the current year but pertains to previous financial year. For example salary for the month of March is paid in the month of April of next financial year

Prepaid income – – Any Income received in advance which pertain to next financial year ; for example – Fees /Rent received in advance

Prepaid Expenditure:: Any expenditure paid during the year the benefit of the same extends to next financial year-For Example- Insurance /Rent/AMC paid in advance

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Outstanding Expenditure/Pending Outstanding Expenditure/Pending ExpenditureExpenditure: : Any expenditure pertaining Any expenditure pertaining to the current year but not paid in the to the current year but not paid in the current financial year due to various current financial year due to various reasons like scarcity of fund/bills reasons like scarcity of fund/bills received late.received late.

Closing StockClosing Stock: : At the end of the At the end of the financial year (as on 31st March) some financial year (as on 31st March) some portion of the stationery / study material portion of the stationery / study material may be lying unused out of the stock may be lying unused out of the stock purchased during the year.purchased during the year.

Once the feeding of connected cash and accrual details is complete Receipt & Payment Account, Income and Expenditure Account , and Balance sheet are drawn.

The Annual Accounts so compiled is placed before Finance Committee ,BOM for its Approval.

After approval by the Finance Committee and BOM the Annual Accounts are sent to DGACR for Audit who in turn conducts Statutory Audit, points deficiencies, issues draft audit report, get clarifications and issues audit certificate.

The Finance & Accounts Division then gets the approval of Annual Accounts alongwith Audit Report from FC & BOM.

Once the approval is obtained the Annual Accounts of the particular year is printed and forwarded to MHRD for laying it in both the houses of Parliament.

THANKSTHANKS


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