Debit and Minus Credit
§ Minus Credit or Minus Debit is the Unique feature of Indian Railways Accounting system.
§ Probably, nowhere in the World, the Minus Debit or Minus Credit is operated.
§ Let's go into the necessity/object of operation of the Minus Credit.
§ When an employee goes on transfer, one unit transfers the Civil Grant of an employee to another unit.
§ In this case, Minus Credit is operated in the Journal entries instead of Debit. The object is to avoid budgeting effect. Let's check the transactions
§ Example: Unit 'A' transfer the HBA Debit balance Rs.1,00,000/- of employee X to Unit 'B' on his transfer.
Journal entry in the books of Outward Unit 'A':
Credit - HBA head - Rs. 1,00,000
Minus Credit - Transfer Divisional Unit 'B' - Rs. 1,00,000
(Transferring employee X's HBA Debit balance Rs. 1,00,000 to unit B)
Journal entry in the books of Inward Unit 'B'
Credit - Transfer Divisional Unit 'A' - Rs. 1,00,000
Minus Credit - HBA head - Rs. 1,00,000
(Accepting the Debit balance of HBA of Mr X in his books)
§ With the above transactions, Debit balance of HBA in the books of Unit 'A' is reduced and to that extent, debit balance of HBA in the books of Unit 'B' is added.
§ Though, it is a Debit balance, the transactions are effected through minus credit to avoid budgeting effect twice (one at Grant of HBA at unit A and another at accepting the Debit at Unit B)
Some More examples of operation of Minus Debit and Minus Credit
1. Clearance of Cheques & Bills - Minus Credit
2. Clearance of Remittance Into Bank - Minus Debit
3. Intra Railway Transfer Transactions among Divisions in a Zonal Railway - Transfer Divisional head operated - Minus Debit and Minus Credit
4. Rectification of errors in accountal of transactions before closure of Books.
5. Write back adjustments