Differences between MAR & Deposit Miscellaneous

5 marks question -1986 (WO) & 1993 (WO)

DIFFERENCES BETWEEN

MAR	DEPOSIT MISCELLANEOUS
1.It is a Suspense Head under the Major Head 3002   - Indian Railways Commercial Lines.	1. It is a Suspense Head under the Major Head 8445 - Indian Railways Deposits.
2. It records all DEBITS of transactions which cannot be booked directly to the final heads of accounts for want of allocation, inter-dept. transactions awaiting acceptance, Debit balance in Reserve Bank Suspense (RBS), etc at the end of the year.	2. It records all CREDITS like miscellaneous deposits made to Railways like Security Deposit, EMD, Court attachment recoveries, Deposit Works amount paid by concerned persons etc.
3. It always shown as Debit Balance.	3. It always shown as Credit Balance
4. The Balance under this Head should be examined to see "That there are no Credit Items"	4. The Balance under this Head should be examined to see "That there are no Debit items"
5. Direct Credit cannot be booked to this Head, unless there is corresponding Debit already there.	5. Direct Debit cannot be booked to this Head, unless there is a corresponding Credit already there.

Differences between Gross Receipts and Gross Earnings

1989 (wo), 1990 (wo) & 1995 (w) - 5 marks

DIFFERENCES BETWEEN

S.N.	Gross Receipts	Gross Earnings
1	Actual is the basis	Accrual is the basis.
2	Actually realized during the accounting period i.e., financial year. (irrespective of pertaining to previous year or next year)	Accrued during the accounting period i.e., financial year ( irrespective of whether actually realized or not)
3	Represents Gross earnings plus Traffic Suspense.	Represents Coaching Earnings plus Goods Earnings plus Sundry Earnings ( less refunds)
4	Conforms Government accounts	Conforms Commercial Accounts

Write back adjustments

WRITE BACK ADJUSTMENTS IN INDIAN RAILWAYS

• What is Write back in Indian Railways lingo?

• In Indian Railways lingo, Write Back means, at the time of condemnation of asset like rolling stock, the original cost of that asset will be write back from the source of finance for which originally used (normally “Capital” ) and debited to the Source of finance i.e., DRF – Depreciation Reserve Fund.

• For example, if the asset Diesel locomotive which is purchased at a cost of 35 Lakhs in the year 1965 and was put to condemnation in the year 2014, after expiry of its useful life period.  The Competent Authority gave its approval for such condemnation.

• In the books of Zonal Railway, the write back entries (Journal entries )are posted by using CONTRA JVs.

    In the Capital Books  - CJV

    CAP -20-2113 -08(Rolling Stock)                             ( - ) Debit  - Rs. 35 Lakhs

       Transfer Railway Revenue           (00878243)              Debit  -  Rs. 35 Lakhs

    In the Revenue Books  - RJV

     DRF – 2113- 08  (Rolling Stock)             Debit   - Rs. 35 Lakhs

     Transfer Railway Capital (008782 44)       Credit   -  Rs. 35 Lakhs

·         There by, the Capital Account is reduced to that extent (because the asset is no longer in use and condemned) and the dividend liability also reduced correspondingly.

·         The DRF - Depreciation Reserve Fund Account is debited to that extent .  The logic is,  throughout the life period of employing the said Diesel Loco in Indian Railways, "Depreciation" on yearly basis is credited to the DRF (fund). 

·         Hence the amount Rs. 35 Lakhs was write back from Capital (by minus Debit/Credit) and added to DRF (by Debit).

·         Also the proceeds realized from the condemnation of Diesel Locomotive credited to DRF  by debit to Railways Fund in RBI/Nagpur (through RIB - Remittances Into Bank A/c)

·          The operation of Depreciation Account and policy of Depreciation in Indian Railways is entirely different from commercial organizations.  Instead of providing Depreciation on individual basis, the Railways is appropriation to DRF on entire block of assets employed in Indian Railways.  In this, there is no scientific policy in providing contributions to DRF and at large depend on available amounts at the Railways.

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Differences between Write back and Write off

5 marks question in General Expenditure -1995 (WO),1997(WO) & 2001 (WO)

DIFFERENCES BETWEEN

Write back	Write off
1. Resorted for regularisation of the incorrect allocation to any Head or write back of provision in original Head.	1. Used when the Railway administration relinquishes its right of claim for one reason or other for an amount (after the same is incorporated into regular accounts)
2.The correct account head is debited and minus debit to that from which the charges are written back. Example: When the over aged coach (source of procurement is capital) is condemned, the original value of such asset i write back from the Capital as follows. CAPITAL - 2100  - Minus Debit  --   xxxxx        DRF - 2100  -  Debit              --   xxxxx	2. It mainly relates to bad debits such as irrecoverable amount of advance paid, loss of cash or stores due to theft, fraud or natural calamities, in efficient suspense balances, capital assets by amortisation etc.
3. It means to take reverse the original transaction i.e., write back for sufficient reason.	3. It means, a Debit balance in the books, but not possible to realise the same in future.   So Write off the same.

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Differences between Capital & Capital Fund

DIFFERENCES BETWEEN

CAPITAL	CAPITAL FUND
1. External source (given by Ministry of Finance)	1. Internal source ( Surplus available after paying Dividends and appropriating to DF, RSF )
2. Dividend to be paid on Capital provided by Ministry of Finance.	2. Dividend need not be paid, since it is a surplus after meeting all obligations of Railways.  On the other hand, Interest is credited to the Capital Fund on the balance of the Fund at the end of financial year.  (Rate of interest is equal to the Dividend rate and recommended by RCC from time to time)
3. Rules of allocation is prescribed in chapter V of Finance Code volume I.  They are a) cost of first construction b) Land c) Cost of construction of quarters.	3. No separate rules existing for utilizing this Fund usually charged to all Plan Heads (except Plan Heads 11 & 51).  However in current years, the Capital Fund is utilized for meeting the Plan Head 2200 - Principal component of lease charges payable to IRFC