Accountancy · Chapter 11
Study notes aligned to the official NEB syllabus.
The accounting system used in government offices to maintain scientific and systematic records of financial transactions is called government accounting. Government accounting is one of the branches of the accounting system. It systematically and scientifically records the incomes and expenditures of all government offices, including ministries, departments, and operating level offices.
a. No concern with profit / loss: Government offices are established for public welfare. Therefore, all the financial activities carried out by such offices do not have a profit or loss motive.
b. Guided and controlled by budget: Government accounting is fully guided and controlled by the government budget. Expenditures are made according to the budget approved by the government for a fiscal year.
c. Based on double entry system: The double entry system maintains records of every transaction by showing its double effect, i.e. debit and credit, which helps maintain arithmetical accuracy.
d. Based on financial act and rules: Government accounting maintains all books of account according to the financial acts and rules of the government.
e. Tax as the principal source of revenue: Tax is the major source of government accounting. Direct and indirect taxes are computed and recorded in government accounting.
a. Systematic and scientific record of financial transactions: The main objective of government accounting is to record the day to day financial transactions of government offices in chronological order, following government rules and regulations.
b. Expenditure controlled on the basis of budget: All government expenditure, whether developmental or administrative, is controlled on the basis of the budget approved by parliament.
c. To control misuse of government properties: It helps in the proper recording of government properties like machinery, furniture, computers, typewriters, stationery, and other materials, and has mechanisms to safeguard and control them.
d. Provide necessary information: Government accounting provides necessary and reliable information to prepare the progress report of the government.
In Nepal, the origin of the government accounting system may be traced back to the Lichhavi and Malla periods. Before that, the government was neither accountable to the public nor had many transactions to be accounted for. In that period, records of government revenues and expenditures were maintained in traditional ways.
The sources of government revenue were collected from voluntary labour tax (shraman), property tax (jhara tax), and trusts (guthis) in the Lichhavi period (as stated in the source). Later, due to the development of trade and industry, customs duty and business tax also became sources of income in the Malla regime.