Page 185 - Account 10

In this way, the New Accounting System of Government of Nepal may be defined as the
accounting system recommended by ‘The Accounting Committee 2017’ for systematic
recording of government revenue and expenditure preparing statements of those records
and summarising all the government statements so as to facilitate the preparation and
implementation of government budget, economic planning and utilization of government
properties in the welfare of the people.
New Accounting System of Government of Nepal was viewed to avoid the drawbacks of
the previous accounting systems and has become successful in doing so. It has brought
a revolution in the field of accounting. Being an indispensable part of the financial
administration of Government.

Key Point The New Accounting System is the accounting system based on double
entry book-keeping system recommended by the `Accounting Committee
1017’ for systematic recording of government revenue and expenditure.

4. Objectives of New Accounting System
New Accounting System of Government has a number of objectives, from the
recording of the financial transactions of the government to the observation of utilisation
of resources and efficiency of the government office. The objectives of the New Accounting
System, as determined by ‘The Account Committee 2017’, are as follows:
i. To Keep Proper Record
The main objective of New Accounting System is to keep the records of the financial
accounts properly. All financial transactions of government office must be recorded in
their respective accounts promptly. There is greater possibility of misuse of cash income
and expense which should be controlled by accounting system.
ii. To Make Expenditure within the Budget Limit
The Government of Nepal allocates a fixed amount for each organization as its
budget. The organization can not spend more than what has been spent. New Accounting
System does not allow any government organization to exceed the limit fixed by budget.
There is an instrument called `Budget sheet’ to control the expenses by limiting to the
budget through it.
iii. To Provide Information for the Preparation of Budget
The objective of New Accounting System is to provide information which helps to
prepare the coming year’s budget. For the preparation of budget of new year, government
needs actual financial information of income and expense of previous year. Under this
system, monthly statements and statement of expenditures help to provide financial
information for the preparation of budget.

iv. To Provide Information about Fund
This accounting has objectives to inform that whether income is generated as per
estimated or not, how much is available and for different jobs and projects and how much
progress is made, whether released funds have been reached to the destination or not can
be known from New Accounting System.

184 Aakar’s Office Practice and Accountancy - 10 Government Accounting System 185