Railway Accounts Department Examinations

Showing posts with label AG Suspense. Show all posts
Showing posts with label AG Suspense. Show all posts

Wednesday, October 11, 2023

Transfer & Remittance Transactions - Books - Accounts Code Chapter 4 - Remittance Transactions (India)

 

Transfer & Remittance Transactions  


  • Source: Chapter 4 of Accounts Code 

 


Differences between

Transfer Transactions

Remittance Transactions

Between 


  1. Divisions in Zonal Railway 

  2. Zonal Railways in IR  

  3. Revenue & Capital or vice versa

Between 


  1. Railways & Other Central Govt Depts (like Defence) 

  2. Railways & State Govts. 

Heads Operated: 


  1. Transfer Divisional 

  2. Transfer Railways 

  3. Transfer Railways Revenue 

  4. Transfer Railways Capital

Heads operated: 


  1. PAO Suspense 

  2. AG Suspense

  3. M-Remittances 

  4. Reserve Bank Suspense

Operation  through: 


  1. TC - Transfer Certificates - Issue & acceptance by various units

  2. Contra transactions (Between Revenue & Capital or Vice Versa)

Operation through: 


  1. Advice of Clearance by various Accounts Offices 

  2. Memo of Clearance by RBI

Clearance: 


Through Book adjustments by preparing Journal entries within Railways itself

Clearance:

 

  1. By RBI - Operation of Deposit with RBI A/c 

  2. Cheque Payments: 

Transfer Transactions  


  • All Inter railway transactions are technically known as "Transfer Transactions"


  • Book Adjustment: As a general rule all transactions between two different accounting units in the same railway or between two railways (excluding company worked railways) should be settled by book adjustment (i. e. not by actual payment or recovery of cash).


  • Transfer transactions - Examples:  Pay & Allowance, Transfer of PF balances and other advances, Fuel debits, POH debits, IRFA debits, IRCA debits, IRFC debits, Stores debits, Adjustment mema, Transfer of credits, Earnings debits/credits


  • Transfers between any two accounting units within the same railway should be effected by means of Transfer Certificates (A. 406) 


  • The unit initiating a transfer should prepare the Transfer Certificates (A.406) in duplicate, send one copy duly supported by the initial accounts records or vouchers in which the details of the transactions are set forth to the unit to which the transaction pertains and retain the other copy as the office copy.

 

  • Acceptance of Transfer Certificates.-The responding Accounts Office i. e., the accounting unit which receives the Transfer Certificate, should accept the transfer in the accounts of the same month in which the transfer is proposed in the Transfer Certificate. 


  • The Transfer Certificates for cash transactions should be accepted without demur. (without objections)


  • Inter-Railway Transfers.-All transfer transactions between Railways (excluding Railways worked by Company) will be adjusted by means of Transfer Certificates.   


  •  301 A - It is the duty of the Accounts Officer 


  1. Outward - To transfer to other accounts circles the items pertaining to them which originate in his circle, and


  1. Inward - To adjust in his books of account the items of expenditure or receipts pertaining to his own circle and transferred to him by other Accounts officers;  




  •  401 A - All Inter / Intra Railway transactions are technically known as “ Transfer Transactions” 


  • 402  AI - As a general rule all transactions between two different accounting units in the same railway or between two railways should be settled by book adjustment (i. e. not by actual payment or recovery of cash). 


  • Para 406 AI says....


  • Transfers between any two accounting units within the same railway should be effected by means of Transfer Certificates (A. 406) 

 

  • The unit initiating a transfer should prepare the Transfer Certificates (A.406) in duplicate,  

  

  • Send one copy duly supported by the initial accounts records or vouchers in which the details of the transactions are set forth to the unit to which the transaction pertains 

 

  • And retains the other copy as the Office copy 


Methodology


Originating  unit 

 

  • Collect vouchers from executive 

  • Prepare TCs - Transfer Certificates

  • Attachment original vouchers with TCs

  • Send to Books Section with the JV 


Books Section 

 

  • To see whether the transaction pertains to other field units of Home Railway

  • If so, register the TC and allot a number to it

  • Send the TC to other field units with the original vouchers

  • Watch its acceptance through monthly reconciliation


Receiving Section 


  • Verifies the voucher received

  • Accept the TC if the transaction pertains to them

  • Return the TC if the transaction does not pertain to them


  • E-Recon - Dispensing the manual exchange of TD/TCs among the different Zonal Railways/Divisions at the Reconciliation meetings.

  • E-Recon meant for Transfer transactions among various Accounting units such as Zonal Railways/Divisions only.  Outturn JVs, rectification of errors & other adjustments which does not involve transfer to other units are to be dealt  only in IPAS -Integrated Payroll & Accounting System.  


  • E-Recon full form -  Electronic Reconciliation.


  • An Online Transfer Transaction web based Portal - Introduced on 01.04.2011. 

 

  • Exclusively developed to process the Intra and Inter Railway Transfer transactions through online.  

 

  • Transfer Transactions fall under two categories namely “Cash” and “Adjustment”.

 

  • Cash: Cash transactions originate through CO7s, wherein Transfer Divisional allocations are fed on account of expenditure incurred or recoveries affected on behalf of Other Rlys/Divisions/ Unit Accounts Offices, which will subsequently be transferred to the respective units. 

 

  • Adjustments: Adjustment transactions originate through JVs, whereby Drs/Crs on account of works carried out in our workshops, material assistance rendered on requisition, CRRMs, etc., for other Rlys/Divisions/Unit Accounts Offices raised against the respective units.

 

  • TD/TCs of cash items  - Downloading the cash data from IPAS and uploading into E-Recon.

 

  •  TD/TCs of non-cash items - Entering the key information of the Dr/Cr proposed to be raised. 

 

  • The vouchers required to be sent are scanned, saved as PDF files and uploaded to eRecon as attachment to the respective TD/TCs.

 

  • After uploading is over, the TD/TCs are approved by the Source Unit. 

 

  • Immediately after the approval, the Destination Units can view the TD/TCs in their systems.  

 

  • If the destination units confirm that the Dr/Cr pertains to their units, the TD/TC gets accepted and the subsequent JV prepared and approved for their accountal in General Books. 


  • Disputes/differences of opinions in regard to acceptance of a TC etc. are resolved by the Presiding Officer in the Quarterly Reconciliation Meetings. In E-Recon, a  provision also exists for presiding officer but in electronic mode. 


Advantages


  1. Maintain the Transfer Transactions efficiently, accurately, quickly and within target dates. 


  1. Avoids reconciliation meetings at the end of each quarter and preceding month (i.e., February) attended by large number of officers/staff which involve substantial time and financial implications besides acrimonies and disputes amongst the participating staff 


  1. To reduce the time consumed in the physical transfer of vouchers.


  1. To avoid delay for the expenditure to be accounted in the same month of incurrence, thereby to ensure more realistic comparison of expenditure with reference to Budget Proportion of a Month.

 

  1.  Ways and means to be authorised on actual basis.

 

  1. Generation of Account Current has been advanced drastically.


  1. Reduced the unavoidable TA/DA of staff and movement of documents from one accounting unit to another.


  1. Avoided considerable delay in accepting the TD/TCs by the destination unit.


  1. Simultaneous accounting of Dr/Cr by both source and destination units by preparing JVs on both sides.


  1. Since reasons for rejection of an Inward TD/TC are recorded and rejection of Outward TD/TC are immediately known to the Source Unit, the source unit can take necessary rectification measures such as passing on requisite information to the Rejected Unit or raising of TD/TC on the connected unit.


Differences between

Intra Railway

Inter Railway

Between Divisions in zonal Railway

Between Zonal Railways in IR

Minus Debit / Minus Credit

Contra Debit / Contra Credit

Journal entry in Initiating Division A


Division B A/c Dr - xxx  

      To  erstwhile Demand No.4 Cr  xxx


Journal entry in the Responding Division B


Erstwhile Demand No.4 A/c Dr   xxx 

Division A A/c              Minus Dr xxx

Journal entry in Initiating Railway SCR


WR A/c Dr - xxx  

      To  erstwhile Demand No.4 Cr  xxx


Journal entry in the Responding Railway WR


Erstwhile Demand No.4 A/c Dr   xxx 

      To SCR A/c                       Credit xxx


Remittance Transactions 



Between

Railways & other 

GovtDepts

Outward

Inward

Remarks

Cheque/ DD

PAO Suspense

PAO Suspense

All Depts in Central Govt

(except Postal & Defense)

Cheque/ DD

AG Suspense

AG Suspense

State Governments

Adjustments through RBI

M - Remittance

Reserve Bank Suspense

Postal & Defense


  • AG Suspense example is Police Warrants issued by the State Govts.

  • PAO Suspense example is PRS tickets sold at Post Offices & CISF/BSF/IB warrants 



SN

Name 

Purpose

Initially Booked as

Cleared to 

Showing always balance of 

Balance represents

1

RBS – Reserve Bank Suspense

Operated for settling INWARD transactions from other Accounts Officers     

(Except for C& B and RIB)


Debit or Credit

RBD – Reserve Bank Deposit Final Head

Debit or Credit

Un settling inward transactions

2

PAO Suspense 

For the settlement  of inter departmental  and  inter govt. transactions (other than defense and postal) arising in the  books of  Railway  Accounts Offices 

Debit or Credit

RBD – Reserve Bank Deposit Final Head

Debit or Credit

Unsettled inter governmental or inter departmental transactions

3

AG Suspense

For the settlement  of transactions with State Govts. 

Debit or Credit

RBD – Reserve Bank Deposit Final Head

Debit or Credit

Un settled State Govt transactions

4

M Remittances

For Adjustment of Outward transactions with Postal & Defense only

Debit or Credit

RBD – Reserve Bank Deposit Final Head

Debit or Credit

Un settled O/W transactions with Postal & Defense

RBD – Reserve Bank Deposit


Accountal of  Government Money as a Final Head

Debit or Credit

-

Debit (Always) –overall as Govt.

In Railways:

Debit (favorable)

Credit (un favorable)




RESERVE BANK SUSPENSE AND RESERVE BANK DEPOSIT


Reserve Bank Suspense (RBS) :

  • It is a suspense head operated for settling INWARD transactions from other Accounts Officers      ( Except for Cheques & Bills and Remittance into Bank)


  • As and when, the ADVICES received, the RBS A/c is debited ( in case of receipts) or credited (  in case of expenditure).


  • On receiving "CLEARANCE MEMO" from RBI-Reserve Bank of India, the a/c in RBS is cleared by contra Debit or credit to Reserve Bank Deposit (RBD).


  • All balances under RBS should be NIL at the end of the financial year i.e., 31st March.  If any balance is left over, the same should be transferred to MAR (if debit balance) or to Deposit Misc (if credit balance) as the case may be.


Journal entries:


example: Receiving Debit from  Accounts Officer of Other Depts.


1) On receipt of ADVICE ( Debit ) from the other Accounts Officer  


Concerned Revenue Demand        Dr.xxxx

To Reserve Bank Suspense (RBS)    Cr              xxxx

( Booking of expenditure to respective Demand and simultaneously placed under RBS for clearing due from RBI)


2) On receipt of CLEARANCE MEMO from RBI-Reserve Bank of India


Reserve Bank Suspense (RBS)      Dr xxxx

To Reserve Bank Deposit (RBD)    Cr xxxx

(Clearing balance in RBS duly debited and credited to Railway Central Fund i.e., RBD- Reserve Bank Deposit)





Reserve Bank Deposit: 


  • The original name is "Deposit with Reserve Bank" Major Head 8675.


  • It is a Railway Central Fund in the Books of Reserve Bank of India - CAS- Central Accounts Section at Nagpur.


  • It is operated to record, the "Clearance Memo" which are received from RBI in clearance of transactions intimated either by :- 

  1. PFA’s for the transactions originating in Railway Books and are to be settled through RBI. 

  2. In clearance of transactions which are intimated by other Accounts Officers to the RBI. 

  3. The clearances of RIB-Remittances Into Bank  and C&B- Cheques & Bills ( through PSB suspense - Public Sector Bank Suspense)


  • The Balance under RBD is closed to "GOVERNMENT" at the end of the year i.e., 31st March.


  • RBD is reconciled with the General Books. 


  • It is determined for ascertaining Net drawal position of the Indian Railways as a whole.  


  • If Debit balance, it is favorable being Cash receipts are more than Cash payments.  If Credit balance, it is vice versa.



Differences Between

RBS - Reserve Bank Suspense 

RBD - Reserve Bank Deposit

1. Operated only for INWARD transactions

1. Operated for both INWARD & OUTWARD transactions

2. Operated for settling Inward transactions from other Accounts Office i.e., Defence, P&T etc

2. Operated for adjustment of transactions i.e., clearance of C&B, RIB and transactions settled with Non-Rly depts as well as outward transactions raised by FA&CAOs against other depts.

3. Nature of the Head is "SUSPENSE" in the books of Railways

3. Nature of the Head is FINAL i.e., "Railway Central Fund" in the books of RBI/CAS/Nagpur.

4. Until the transaction is adjusted, this Head bears the transaction.  Once the transaction is adjusted to RBD, the balance under this Head is cleared.

4. With the operation of this Head, the adjustment of transaction is over, thereby affecting the balance of Railway Deposit in RBI/CAS/Nagpur.

5. Clearance: All the items under this head should be cleared at the end of the year.  If any balance is left over, the same is transferred to MAR (debit balance) or Deposit Misc (Credit balance) as the case may be.

5. Clearance: The balance under this Head should  be transferred to GOVERNMENT at the end of the year i.e., March, 31st.



PAO Suspense / AG Suspense 


  • Full form: Pay & Accounts Officer Suspense / Accountant General Suspense

  • Source: Chapter 4 of Accounts Code (Para No. 457 A)

  • It is one of the Suspense Heads operated in Indian Railways in respect of its transactions with other Central Govt Depts / State Govts. 


  • For the settlement  of inter departmental  and  inter governmental transactions (other than defense and postal) arising in the  books of  Railway  Accounts Offices, PAO  suspense/AG suspense  head is operated. 


  • Pay and Accounts officers / Accountant Generals will not settle transactions with railways through the Reserve Bank and vice-versa. All their dues will be paid/received at weekly intervals on cash basis i. e., by cheques or Government drafts.


  • Journal entries of PAO/AG


1) When a Claim is preferred  


PAO/AG Suspense        Dr.               xxxx

To Service Head/Earning Head    Cr              xxxx

( Claim is preferred on Central GovtDept or State Govt for rendering services to them by Railways)


2) On receipt of Cheque/Demand Draft


Remittance Into Bank A/c      Dr xxxx

To PAO/AG Suspense          Cr xxxx

(On Receipt of Cheque/Demand Draft and cleared the PAO/AG Suspense Head)


  • The balance under this  head is  exhibited on  the Liabilities  Side of the  Balance Sheet of Indian  Railways.  




M Remittances

  • It is a Suspense Head operated to record the outward inter governmental transactions (Debits / Credits) vide Advanced Schedules raised by the Railways and pending clearance by RBI. 


  • On issue of Advance Schedules (say Debit), Appropriate Service Head is credited and M-Remittance A/c is debited. 


Journal entry

Date

Particulars

Debit

Credit

--

M Remittances A/c Dr

Rs.20,000


----

    To Demand No. A/c  Cr


Rs. 20,000


  • On Receipt of Memo of clearance from RBI, for the above Debit, the suspense Head is credited and the Deposits with RBI Head is debited 

Journal entry 

Date

Particulars

Debit

Credit

--

Reserve Bank Deposit  A/c Dr

Rs.20,000


----

    To M Remittance  Cr


Rs. 20,000


Net Entry 

Date

Particulars

Debit

Credit

--

Reserve Bank Deposit A/c Dr

Rs.20,000


----

    To Demand No. A/c  Cr


Rs. 20,000


  • Examples: M&M vouchers (Military & Miscellaneous vouchers) pertaining to Defense Dept. Rent of Buildings occupied by Postal Dept.  


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