Chapter 10: Revenue Accounting

10.1 Concept and Meaning of Government Revenue Accounting

Government Revenue refers to the total public income collected by the government (Federal, Provincial, and Local) from citizens and business entities through compulsory taxes (such as Income Tax, VAT, Customs Duty, Excise Duty) and non-tax sources (such as administrative service fees, passport/license fees, royalties, fines, penalties, dividends, and grants) without any direct repayment obligation.

• Revenue Accounting: Revenue Accounting is the systematic process of collecting public revenues, issuing official receipts, recording daily collections in prescribed forms, depositing the collected funds into the designated Revenue Bank Account (Consolidated Fund), and submitting monthly and annual revenue statements to the superior office and Treasury Comptroller Office (DTCO/PTCO).
• Legal Responsibility: The Head of Office holds the ultimate legal responsibility for maintaining accurate revenue records and getting them audited.

10.2 Revenue Classification and 5-Digit Revenue Accounting Codes

To standardize computerized revenue tracking in the Revenue Management Information System (RMIS) of FCGO, every revenue source is assigned a 5-digit Revenue Accounting Code. The main revenue code categories are:

10.3 Forms Used in Revenue Accounting (100 Series)

1. Cash / Receipt Slip (AGF No. 101): Issued immediately to the taxpayer/service-seeker as official proof when cash or cheque is received at the office counter.
2. Daily Revenue Book (AGF No. 102): Records all AGF No. 101 receipts issued throughout the day in chronological order to find the daily total revenue under each revenue code.
3. Revenue Journal Voucher (AGF No. 103): Double-entry voucher used to journalize revenue collection and deposit into the Revenue Bank Account (Consolidated Fund).
4. Revenue Bank Cash Book (AGF No. 108): Multi-column ledger showing daily revenue received, amount deposited into the bank, and remaining cash waiting to be deposited.
5. Monthly Statement of Revenue (AGF No. 109): Monthly summary statement of revenue collected and deposited into the Consolidated Fund.

10.4 Process of Revenue Accounting & Banking Arrangement

The revenue accounting cycle follows 6 sequential steps:

1. Collection of Revenue & Issuance of Receipt (AGF 101) OR Direct Bank Voucher / Electronic Payment (RMIS / ConnectIPS).
2. Posting to Daily Revenue Book (AGF 102) at the close of each working day.
3. Mandatory Bank Deposit into Consolidated Fund: Any cash collected at the office counter cannot be spent directly by the office; it must be deposited into the designated commercial bank’s Revenue Account on the same day or the very next working day.
4. Preparation of Revenue Journal Voucher (AGF 103) and Revenue Bank Cash Book (AGF 108).
5. Automatic Transfer via Treasury Single Account (TSA) to the Government’s Consolidated Fund.
6. Monthly and Annual Reporting:
   • Monthly Revenue Report (AGF 109): Must be submitted to the superior office and District Treasury Comptroller Office (DTCO) within 7 days after the end of every month.
   • Annual Revenue Statement: Must be submitted within 35 days after the end of the fiscal year for Final Audit by the Office of the Auditor General.

10.5 Rules & Solved Example of Revenue Journal Voucher (AGF No. 103)

Rules for Passing Revenue Journal Entries

• Case A: When revenue is collected in cash at the office and deposited into the Bank later:
  1. On collection of cash:
     • Dr. Cash Account
     • Cr. Revenue Code Account (e.g., Cr. 14221 Passport Fee)
  2. On depositing collected cash into the Revenue Bank Account:
     • Dr. Bank (Consolidated Fund) Account
     • Cr. Cash Account
• Case B: When the taxpayer deposits revenue directly into the Bank (or via Online RMIS voucher):
  • Dr. Bank (Consolidated Fund) Account
  • Cr. Concerned Revenue Code Account

Solved Example

Question: Pass Revenue Journal Vouchers (AGF No. 103) for the District Administration Office, Kathmandu:

1. 2083/04/05: Collected Rs. 25,000 in cash for Passport Fee (Code 14221) as per Receipt Nos. 101–105.
2. 2083/04/06: Deposited the cash collected on 2083/04/05 (Rs. 25,000) into Rastriya Banijya Bank Revenue Account as per bank voucher.
3. 2083/04/12: Received bank deposit voucher of Rs. 15,000 deposited directly by service-seekers for fines and penalties (Code 14311).

Solution:

10.6 CDC Textbook Exercises & SEE Practice Questions

Group A: Very Short Answer Questions (1 Mark Each)

1. What is Revenue Accounting System?
2. Who is responsible for maintaining revenue records up to getting the final audit done in a government office?
3. Within how many days after the end of a month must a revenue-collecting office submit the monthly revenue statement to the superior office?
4. Who conducts the internal audit of revenue accounts of Federal Government offices?
5. Under which revenue code is recovered audit irregularity deposited?
6. What is the AGF number of the Revenue Journal Voucher?

Group B & C: Short and Long Answer Questions (5 & 8 Marks)

1. What is a Revenue Accounting Code? Write any five revenue codes with their titles. (5 Marks)
2. Explain the step-by-step process of Revenue Accounting in Nepal. (8 Marks)
3. Review how banking arrangements (TSA and online payment) are used in Revenue Accounting in Nepal. (8 Marks)

Worked answers to these exercises are in Chapter 10 Solutions.