Chapter 11 Solutions: Accounting of Government Expenditure
Answers to the Chapter 11 exercises. Each answer is as long as its marks call for: a sentence or two for 1 mark, and full working for the numerical problem.
Group A: Very Short Answer Questions (1 Mark Each)
1. Write the AGF numbers of Journal Voucher, Budget Sheet, Bank Cash Book, and Statement of Expenditure.
Journal Voucher = AGF No. 203, Budget Sheet = AGF No. 208, Bank Cash Book = AGF No. 209, and Statement of Expenditure = AGF No. 210.
2. What are the 5-digit budget sub-head numbers for Employee Remuneration, Office Supplies, and Machinery & Equipment?
Employee Remuneration = 21111, Office Supplies and Stationery = 22311, and Machinery and Equipment = 31122.
3. Why is a Budget Sheet (AGF No. 208) prepared?
A Budget Sheet is prepared to keep budgetary control: it records the annual appropriation, releases and expenditure under each budget head so that spending never exceeds the approved budget.
Group B & C: Short and Long Numerical Questions (5 & 8 Marks)
1. Practice Problem (Journal Voucher & Bank Cash Book): Prepare Journal Vouchers (AGF No. 203) and post them into a Bank Cash Book (AGF No. 209) for District Health Office, Lalitpur for Mangsir 2083:
- 2083/08/03: Paid Rs. 15,000 for Water and Electricity (22111) by payment order.
- 2083/08/08: Purchased computers and printers (31122) for Rs. 85,000 through payment order.
- 2083/08/15: Issued payment order of Rs. 30,000 as advance to Storekeeper Mr. Bikash Gurung for purchasing office stationery (22311).
- 2083/08/24: Mr. Bikash Gurung submitted stationery purchase bills of Rs. 34,000; his advance was cleared and the excess Rs. 4,000 was paid by payment order.
- 2083/08/29: Distributed monthly salary of Rs. 3,30,000 (21111 including government EPF contribution) after deducting EPF Rs. 60,000 and Social Security Tax Rs. 3,000, and deposited the deducted amounts to the concerned offices on the same day.
Part 1: Journal Vouchers
Government of Nepal
District Health Office, Lalitpur
Journal Voucher (AGF No. 203)
| Date | J.V. No. | Particulars | Budget Sub-head No. | Debit (Rs.) | Credit (Rs.) |
|---|---|---|---|---|---|
| 2083/08/03 | 1 | Dr. B.E. Water and Electricity Cr. TSA (DTCO) / Bank Account (Being water and electricity bill paid by payment order) | 22111 | 15,000 | 15,000 |
| 2083/08/08 | 2 | Dr. B.E. Machinery and Equipment Cr. TSA (DTCO) / Bank Account (Being computers and printers purchased through payment order) | 31122 | 85,000 | 85,000 |
| 2083/08/15 | 3 | Dr. Advance Storekeeper Mr. Bikash Gurung A/C Cr. TSA (DTCO) / Bank Account (Being advance given to Storekeeper Mr. Bikash Gurung for purchasing office stationery) | (22311) | 30,000 | 30,000 |
| 2083/08/24 | 4 | Dr. B.E. Office Supplies & Stationery Cr. Advance Storekeeper Mr. Bikash Gurung A/C Cr. TSA (DTCO) / Bank Account (Being advance of Mr. Bikash Gurung cleared against stationery bills of Rs. 34,000 and the excess Rs. 4,000 paid by payment order) | 22311 | 34,000 | 30,000 4,000 |
| 2083/08/29 | 5a | Dr. B.E. Employee Remuneration Cr. Employees Provident Fund (EPF) A/C Cr. Social Security Tax A/C Cr. TSA (DTCO) / Bank Account (Being Mangsir salary distributed after deducting EPF and Social Security Tax) | 21111 | 3,30,000 | 60,000 3,000 2,67,000 |
| 2083/08/29 | 5b | Dr. Employees Provident Fund (EPF) A/C Dr. Social Security Tax A/C Cr. TSA (DTCO) / Bank Account (Being deducted EPF and Social Security Tax deposited to the concerned offices) | — | 60,000 3,000 | 63,000 |
Working notes for the vouchers:
- Voucher 4 (Case 3C, bill more than advance): the whole bill
34,000is the budget expenditure; the advance of30,000is cleared; the shortfall34,000 - 30,000 = 4,000is paid by payment order. - Voucher 5a: net salary paid =
3,30,000 - 60,000 - 3,000 = 2,67,000. The EPF of60,000is 20% of the basic salary of3,00,000(10% deducted from employees plus the 10% government contribution included in the Rs. 3,30,000).
Part 2: Bank Cash Book
Under the Treasury Single Account system, the DTCO releases exactly the amount of each payment order, so each release is shown on the Debit side of the Bank column and, as the other half of the entry, on the Credit side of the Miscellaneous column. Nothing passes through cash, so the Cash columns are left out. Following the chapter’s posting rules, an advance given is entered in the Budget Expenditure column, and when it is cleared only the difference between the bill and the advance (34,000 - 30,000 = 4,000) is added there.
Government of Nepal
District Health Office, Lalitpur
Bank Cash Book (AGF No. 209)
Fiscal Year: 2083/84 | Month: Mangsir
| Date | J.V. No. | Particulars | Bank Dr. (Rs.) | Bank Cr. (Rs.) | Bank Balance (Rs.) | Budget Sub-head No. | Budget Expenditure (Rs.) | Advance Given (Rs.) | Advance Cleared (Rs.) | Misc. Account | Misc. Dr. (Rs.) | Misc. Cr. (Rs.) |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2083/08/03 | 1 | Budget release and payment for water and electricity | 15,000 | 15,000 | 0 | 22111 | 15,000 | Budget Release | 15,000 | |||
| 2083/08/08 | 2 | Budget release and payment for computers and printers | 85,000 | 85,000 | 0 | 31122 | 85,000 | Budget Release | 85,000 | |||
| 2083/08/15 | 3 | Budget release and advance to Mr. Bikash Gurung | 30,000 | 30,000 | 0 | 22311 | 30,000 | 30,000 | Budget Release | 30,000 | ||
| 2083/08/24 | 4 | Advance cleared; budget release and payment of the excess bill | 4,000 | 4,000 | 0 | 22311 | 4,000 | 30,000 | Budget Release | 4,000 | ||
| 2083/08/29 | 5a | Budget release; net salary paid after deductions | 3,30,000 | 2,67,000 | 63,000 | 21111 | 3,30,000 | Budget Release EPF Social Security Tax | 3,30,000 60,000 3,000 | |||
| 2083/08/29 | 5b | EPF and Social Security Tax deposited | 63,000 | 0 | — | EPF Social Security Tax | 60,000 3,000 | |||||
| Total for Mangsir | 4,64,000 | 4,64,000 | 0 | 4,64,000 | 30,000 | 30,000 | 63,000 | 5,27,000 |
Answer:
- Budget expenditure for Mangsir: Rs. 4,64,000, made up of 21111 Employee Remuneration Rs. 3,30,000, 22111 Water and Electricity Rs. 15,000, 22311 Office Supplies & Stationery Rs. 34,000 (
30,000 + 4,000) and 31122 Machinery and Equipment Rs. 85,000. - Budget released: Rs. 4,64,000, equal to the expenditure, so the bank (TSA) balance at the end of Mangsir is nil.
- Advance: Rs. 30,000 given and Rs. 30,000 cleared, so no advance remains uncleared.
- Miscellaneous accounts: EPF and Social Security Tax were credited Rs. 63,000 when deducted and debited Rs. 63,000 when deposited, so both are closed; the Rs. 4,64,000 credited to Budget Release matches the budget expenditure.
Check: 15,000 + 85,000 + 30,000 + 4,000 + 3,30,000 = 4,64,000, and Bank Cr. 15,000 + 85,000 + 30,000 + 4,000 + 2,67,000 + 63,000 = 4,64,000.