Page 186 - Account 10

v. To Safeguard Physical Properties
Government invests lots of its scarce resources in various properties and assets like
machinery, furniture, land, buildings, vehicles, etc. So such various assets are received
and used in the organizations. This accounting has objectives to maintain the store record
of such assets when received and used.
vi. To Make Auditing Simple and Economical
New accounting system uses accounting forms uniformly in every office of all over
the country. This uniformity has made the auditing works simple and economical.
vii. To Help in Preparation of Periodical Reports and Statements
Government officials need to prepare various types of reports and statements at the
end of every fiscal year to inform the people how the taxes paid by the people have been
expensed and what the economical situation of the country.

viii. To Help in Planning and Decision Making
New accounting system provides reliable financial data to the concerned authority.
It helps to prepare different plans and policies and to take right decisions.

Points to Remember

i. To keep proper record ii. To make expenditure within the budget limit
iii. To provide information for the preparation of iv. To provide information about funds
budget
v. To safeguard physical properties vi. To make auditing simple and economical
vii. To help in preparation of periodical reports viii. To help in planning and decision making
and statements

5. Characteristics/Features of New Accounting System
The important characteristics/features of the New Accounting System are discussed
as below:
i. Based on the Principle of Double Entry Book Keeping System
New Accounting System is completely based on the principle of double entry system.
Double Entry Principle refers to the recording of a transaction with double effect with
same monetary value, i.e. it is debited once in one account and the same is credited on the
other account with the same value. Under New Accounting System, all the government
transactions are recorded twice by showing their two effects: debit and credit. It helps to
detect and prevent errors and frauds.

ii. Simplicity and Uniformity
This system is simple to understand and use. Before the introduction of New
Accounting System, there were multi form of systems causing difficulty in auditing and
proper evaluation of financial projects. Similarly, it was difficult for the personnel to
understand the accounting of an office when they were transferred from one office/place

186 Aakar’s Office Practice and Accountancy - 10 Government Accounting System 187