Grade 10 Notes of Government Accounting|| Accountancy

Government Accounting

1.Meaning of Government Accounting

Government accounting is the systematic process of collecting, recording, classifying, summarizing, analyzing, interpreting and communicating financial transactions of government offices.

It mainly deals with:
1.Revenue collection
2.Utilization of public expenditure

It is used by ministries, departments, constitutional bodies, and both central and operating level offices.

2.Objectives of Studying Government Accounting

1.Define government accounting and its features
2.Differentiate government and business accounting
3.Explain the new accounting system
4.Differentiate central and operating level accounting
5.Describe functions of Auditor General, FCGO and Treasury Office
6.Define audit and explain its types and importance
7.Describe development of auditing in Nepal
8.Differentiate internal and final audit

Difference Between Government and Business Accounting

New Accounting System

3.Introduction

The new accounting system was introduced in 2019/20 B.S. It is scientific, uniform, and based on the double-entry system.

4.Objectives of New Accounting System

1.Maintain systematic financial records
2.Limit expenditure within budget heads
3.Supply data for budget preparation
4.Provide updated fund information
5.Facilitate financial reporting
6.Safeguard public property
7.Make audit easy
8.Support planning and decisions

5.Features of New Accounting System

1.Based on double entry
2.Uniform and simple
3.Emphasis on banking transactions
4.Budget head code system
5.Central and operating level classification
6.Use of prescribed forms
7.Internal and final audit provision
8.Cash basis only
9.Transparent system

Level of Government Accounting

6.Central Level Accounting

Maintained by ministries and departments.

1.Records budget received
2.Releases budget to operating offices
3.Prepares central reports

7.Operating Level Accounting

Maintained by district and local offices.

1.Receives budget
2.Spends within budget heads
3.Submits reports to central office

8.Difference Between Central and Operating Level

Constitutional and Financial Bodies

9.Office of the Auditor General

1.Conducts final audit
2.Audits government corporations
3.Prescribes forms
4.Examines books anytime
5.Submits annual report

10.Office of Finance Comptroller General

1.Prepares central accounts
2.Implements accounting forms
3.Maintains consolidated fund
4.Directs treasury offices
5.Records irregularities

11.Treasury and Comptroller Office

1.Releases budget
2.Conducts internal audit
3.Supervises district offices
4.Collects revenue reports
5.Ensures surplus deposit

Auditing

12.Meaning of Audit

Audit is systematic examination of financial records to ensure accuracy and reliability.

13.Development of Auditing in Nepal

1.1828 B.S. Kumari Chowk Adda
2.2016 B.S. Office of Auditor General
3.2031/32 new audit forms
4.2047 & 2072 Constitutions continued system

14.Types of Audit

14.1.Internal Audit

1.Conducted by internal staff
2.Continuous
3.Detects errors early

14.2.Final Audit

1.Conducted by Auditor General
2.Year-end
3.Legal requirement

15.Internal Audit vs Final Audit

16.Importance of Audit

1.Detects fraud and errors
2.Shows true financial position
3.Helps tax determination
4.Builds credibility
5.Aids planning
6.Fulfils legal requirement

Budget Expenditure Heads

17.Key Terms

1.Government accounting
2.New accounting system
3.Central level accounting
4.Operating level accounting
5.Auditor General
6.FCGO
7.DTCO
8.Internal audit
9.Final audit
10.Consolidated fund

Important Questions 

1.Define Government Accounting and give 5 differences with Business Accounting

Answer:
Government accounting is the systematic process of recording, classifying, summarizing, analyzing, and communicating financial transactions of government offices, showing revenue collection and expenditure utilization.

Differences:

2.What is the New Accounting System? Write 5 objectives

Answer:
New Accounting System: Scientific, uniform, double-entry accounting system introduced in 2019/20 B.S. to improve government accounting.

Objectives:
1.Maintain systematic financial records (cash & store)
2.Limit expenditure within approved budget heads
3.Provide financial data for budget preparation
4.Provide updated info about public funds
5.Facilitate preparation of financial statements

3.List 5 features of the New Accounting System

Answer:
1.Double-entry based system
2.Simplicity and uniformity nationwide
3.Emphasis on banking transactions
4.Budget head-based classification
5.Use of prescribed forms (AGF forms)

4.Differentiate Central Level Accounting and Operating Level Accounting (5 points)

5.Write 5 functions of Office of the Auditor General (OAG)

1.Perform final audit of all government offices and corporations (>50% govt share)
2.Consult on auditor appointments for govt-owned firms
3.Prescribe uniform accounting forms
4.Examine books/documents anytime
5.Submit annual audited report to the President

6.Write 5 functions of Treasury and Comptroller Office (DTCO)

1.Release initial imprest and monthly budget
2.Supervise district offices on financial matters
3.Collect monthly revenue statements
4.Perform internal audit of district offices
5.Ensure surplus budget deposited in consolidated fund

7.Define Audit. Differentiate Internal vs Final Audit (5 points)

Audit: Systematic examination of books/records to ensure accuracy, reliability, and compliance with laws.

8.Importance of Auditing (5 points)

1.Detects and prevents frauds and errors
2.Shows true financial position
3.Helps determine correct tax
4.Builds credibility and trust
5.Aids planning and decision making

9.Budget Head Codes – Important Examples

10.Briefly explain development of auditing in Nepal

1.1828 B.S. – Kumari Chowk Adda established
2.2016 B.S. – Office of Auditor General established
3.2031/32 – New audit forms introduced
4.2047 & 2072 Constitutions – Continued constitutional status
5.2048 Auditing Act and 2063 Company Act – Strengthened auditing

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