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ii. Accounting equation approach
There is an accounting equation of assets, liabilities, expenses and income (revenue).
Under this approach the entries are made according to the equation.
The equation is:
Assets + Expenses = Capital + Revenue + Liabilities.

Debit Credit
Increase of Assets, Expenses and Losses Decrease of Assets, Expenses and Losses
Cash, furniture, land and building, computer, Dr. What comes in
machinery, etc. Cr. What goes out
Decrease of Capital, Revenue and Liabilities Increase of Capital, Revenue and Liabilities

7. Treasury Single Account (TSA)
At present, Nepal Government applied the Treasury Single Account (TSA) system.
TSA is related to the management of public funds thereby to enhance the efficiency and
effectiveness of public financial management.

Treasury Single Account (TSA) is a bank account or a set of linked bank accounts through
which the government transaction i.e. all receipts and payments and get a consolidated
view of cash position at the end of each day.
TSA was initiated for making public sector financial transaction (like; financial planning,
expenditure management and cash management) more realistic with the help of simple,
economic, effective and transparent system. It also aims to make the treasury system of
Government of Nepal in line with internationally practiced treasury system and make
it more development friendly with the application of the modern tools. Treasury Single
Account (TSA) system supports aggregate fiscal discipline, optimum use of resources and
effective service delivery.
Under this accounting system, the Operating Level Office receives the details statement
of allocation of budget and an authorization letter from the central level office. The
Operating Level Office manages for spending the budget and spends the budget within
the limitation of budget under the different budget heads and subheads. The Operating
Level Office spends the budget, collect the bills, prepare statements and request to the
District Treasury and Comptroller’s Office to prepare the cheque for deducting from the
account of concerned office. After that, the District Treasury and Comptroller’s Office
verifies the bills and draws the cheque and returns the cheque, bills and statements to the
related office. After that, the related office distributes the cheque to the concerned parties.

Key Point TSA system is an unified structure of government accounts where all
receipts and payments are transacted through single bank account with
strong electronic linkages among spending units and monitoring agencies
that gives a daily consolidated picture of government funds so as to have
an efficient use of cash.

216 Aakar’s Office Practice and Accountancy - 10 Journal Voucher 217