Chapter 12: Store Accounting

12.1 Concept, Meaning, and Importance of Store Accounting

In government and business offices, a large portion of the annual budget is spent on purchasing physical goods, stationery, furniture, computers, machinery, and vehicles.

• Definition: Store Accounting is the systematic process of keeping quantitative and financial records of all consumable and durable physical goods purchased, received, stored, issued/distributed, written off, and remaining in stock in an office, using the prescribed forms of the 400 Series (AGF No. 401 to 418) approved by the Office of the Auditor General.

Importance and Objectives of Store Accounting

1. Protection Against Misuse, Theft, and Loss: Maintains exact accountability for every item purchased by the office.
2. Shows Exact Stock Position: Reveals the opening balance, receipts, issues, and closing balance of every item at any time.
3. Prevents Over-Stocking and Under-Stocking: Helps the storekeeper know when to reorder goods so daily office work is never halted and public funds are not locked in idle inventory.
4. Facilitates Physical Verification and Annual Inspection: Enables the annual Store Inspection Committee (AGF No. 411) to verify whether physical items match ledger records and identify damaged or obsolete goods requiring auction or write-off.
5. Smooth Handover-Takeover: Ensures complete accountability when a storekeeper or office chief is transferred or promoted.

12.2 Classification of Store / Goods

In Nepal’s Government Store Accounting System, all physical goods are classified into two categories based on their durability and lifespan:

12.3 Major Forms Used in Store Accounting (400 Series)

According to the revised AGF 400 Series, the core documents and ledgers used in Store Accounting are:

1. Store Requisition Form / Demand Form (AGF No. 401)

• Purpose: Prepared by a section or employee whenever goods are needed from the store (or need to be purchased from the market).
• Process: The demanding employee fills in the item name, specification, and quantity, signs it, gets the recommendation of the Storekeeper (who checks whether the item is available in stock or must be purchased from the market), and obtains approval from the Head of Office.

2. Purchase Order (AGF No. 402)

• Purpose: When demanded goods are not available in the store and the Head of Office approves market purchase on AGF No. 401, the office issues a formal Purchase Order (AGF No. 402) instructing the selected vendor/supplier to supply the specified goods within a stipulated date at the agreed rate and terms.

3. Store Entry Report / Dakhila Report (AGF No. 403)

• Purpose: When goods ordered via AGF No. 402 (or received via transfer/grant) arrive at the office along with the seller’s tax invoice/bill, the storekeeper inspects the quality, specification, and quantity of the goods and prepares the Store Entry Report / Dakhila Report (AGF No. 403) to formally enter the goods into the Store Ledger (AGF 407 or 408). Without a Dakhila Report, the Accounts Section cannot pay the supplier’s bill!

4. Store Release / Transfer Report (AGF No. 404)

• Purpose: Used when durable or consumable store items are handed over or transferred from one government office to another government office free of cost.

5. Store Ledger for Consumable Goods (AGF No. 407)

• Purpose: Separate pages are maintained for each type of consumable item (e.g., A4 Paper, Ballpens, Toner), showing Receipts from AGF 403, Issues/Consumption from AGF 401, and Remaining Balance in quantity, rate, and amount.

6. Store Ledger for Non-Consumable / Capital Goods (AGF No. 408)

• Purpose: Maintains permanent records of durable assets (Computers, Vehicles, Furniture), including manufacturer, model number, serial/engine number, specification, country of origin, useful life, acquisition cost, additions, write-offs, and current physical condition.

7. Bin Card (AGF No. 409) and Store Subsidiary Ledger (AGF No. 412)

• Bin Card (AGF No. 409): Attached directly to each storage rack/bin in the storehouse showing quantity received, issued, and remaining.
• Store Subsidiary Ledger (AGF No. 412): Tracks durable items (laptop, table, chair, vehicle) issued to a specific employee so they remain accountable until returned.

8. Store Inspection Report (AGF No. 411)

• Purpose: Every government office must form a Store Inspection Committee at least once a year (at the end of the fiscal year) to physically inspect all consumable and durable store items and submit the Store Inspection Report (AGF No. 411) to the Head of Office, identifying:
  • Goods in good working condition vs. goods needing repair.
  • Obsolete or unserviceable goods that should be auctioned or written off.
  • Any discrepancy between physical stock and Store Ledger balances.

12.4 Specimen Format of Store Requisition Form (AGF No. 401) and Dakhila Report (AGF No. 403)

Specimen: Store Requisition Form (AGF No. 401)

• Demanded by: Section Officer | Recommended by: Storekeeper (“Available in store / Need to purchase from market”) | Approved by: Head of Office.

Specimen: Store Entry / Dakhila Report (AGF No. 403)

12.5 CDC Textbook Exercises & SEE Practice Questions

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

1. What is Store Accounting?
2. Write the names of any four forms used in Store Accounting with their AGF numbers.
3. What is a Dakhila Report (Submission/Entry Report)?
4. Write any two points of importance of Store Accounting.

Group B: Short Answer Questions (5 Marks Each)

1. What is Store Accounting? Write any four uses/importances of it.
2. Differentiate between Consumable (Non-durable) Store Ledger (AGF 407) and Non-consumable (Durable) Store Ledger (AGF 408) in five points.
3. Explain the purpose and importance of: (a) Store Requisition Form (AGF 401), (b) Purchase Order (AGF 402), and (c) Store Inspection Report (AGF 411).

Worked answers to these exercises are in Chapter 12 Solutions.