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Commercial/Business Accounting

Business accounting is the accounting system used by business organizations to record
all financial transactions relating to the business. The prime objective of commercial
accounting is profit and it is prepared on the basis of Generally Accepted Accounting
Principles (GAAP) and regulations of organization itself.
Differences between Government Accounting and Commercial/ Business Accounting

Government Accounting Commercial Accounting
Government accounting is maintained Commercial accounting is maintained
for the use of government offices and for the use of business organizations
general public. and its owners.
The main purpose of commercial
The main purpose of government
accounting is to provide accounting is to generate profit and
administrative and financial service to prepare financial statement to know
profit or loss and the financial position
general public.
of the business
Government accounting strictly
follows the budgeting system of Commercial accounting has its own
budgeting and estimation.
government.
Government accounting is classified Commercial accounting does not have
into two levels i.e. central level provision of central and operating
accounting and operating level
accounting. levels.
Office of Auditor General audits Independent and professional
the book of accounts in government registered auditor audits the books of
accounting. account in commercial accounting.

Government accounting is prepared Commercial accounting is prepared
on cash basis. Credit transactions on accrual basis, that implies cash as
are not recorded in government well as credit transactions. Both are
accounting. recorded in commercial accounting.

New Accounting System

Accounting system being used in Nepal i.e. Syaha Shresta Pranali , Form Shresta
Pranali and Bhuktani Shresta Pranali, proved incomplete, unsuitable and lacked
uniformity. Due to these all, need of complete and uniform accounting system was
felt. In other words, existing accounting system could not keep all revenues and
expenditures of the government in a systematic and scientific way. In this situation, to
make recommendation for a systematic and scientific accounting system, an account
committee was formed on Magh 20, 2017 B.S. The committee headed by Account
General and other members of the committee were:

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