Page 180 - Account 10

1. Introduction
The accounting system maintained in government office is known as Government
Accounting. Ministries, Departments and operating level offices of different districts
are government offices. Government Accounting is concerned with keeping records
of government revenues and their proper utilisation in different developmental and
administrative works. It provides all the necessary financial information for decision
making, formulation of future plans, budgets and policies.
Financial administration is an essence of an organization, whether it is government or
non-government. Accounting provides the entire financial information to the financial
management by identifying, recording, classifying and summarizing the financial
transactions, and interpreting their results. Then the general management takes decisions
on the basis of such information, specially in financial matters. Thus, accounting is an
important portion of every organizational entity, which identifies records, classifies and
summarizes the financial transactions and interprets the results thereof.
It is the compulsory duty of the government of every country to maintain rule and order
and peace and security to develop every sector on the equitable basis and establish and
develop the sound defense system and maintain due stability in all the sectors of the
national economy in the country. For this, the government establishes various ministries,
departments, constitutional bodies and a number of sub-ordinating offices under them.
It also conducts various government activities through these offices and sometimes some
special projects are also conducted in different sectors of social life. A number of financial
resources are used in the conduct of such regular activities and the special projects. The
government should make a number of systematic records of the financial activities in
order to see the performance efficiency, control fraud and leakage of resources, see the
application of the budgetary rules in controlling expenditures and so forth. It is the
government accounting, which helps the government to satisfy all such objectives. Thus,
a government accounting refers to the accounting used in government offices to satisfy
the objectives of controlling the government expenses and financial resources, measuring
the efficiency of the government offices and projects, and to determine the accountability
of the concerned authority in the conduct of such activities.
In this regard, Oshisami & Dean have defined government accounting as: “The process
of recording, analysing, classifying, summarising, communicating and interpreting financial
information about government in aggregate and in detail, reflecting all transactions involving the
receipt, transfer and disposition of government funds and property.”

In conclusion, we can say that government accounting is the branch of accounting of
the systematic process of recording, classifying, summarizing, analysing, presenting,
interpreting and communicating the financial transactions of all government offices for
effective utilization of resources.

Key Point Government accounting is the systematic and scientific process of
recording, classifying and summarizing the government revenue and
expenditure for the proper utilization of public fund in development and
administrative works.

180 Aakar’s Office Practice and Accountancy - 10 Government Accounting System 181