Railway Accounts Department Examinations

Sunday, June 3, 2018

Differences between Provision and Reserves




Book keeping -1984, 1987, 1988, 1995 (Most Important question)
Differences between
Provision
Reserves
1.       Meaning: Provide for a future expected liability.
1.       Meaning: Retain a part of profit for future use.
2.       Charge against profit.  That means Provision is created before arriving Profit/Loss. That is Debiting the P&L A/c
2.       Appropriation of profit.  That means Reserve is created after arriving the profit only. That is debiting P&L Appropriation A/c
3.       Provides for known liabilities and anticipated losses. Example:  Reserve for Bad & Doubtful Debts (RBDD)
3.       Provides for increase in capital employed.  Example: Reserve for creation of Capital Asset/General Reserve
4.       Presence of profit is not required to create Provision
4.       Profit must be present for the creation of reserves.
5.       In case of assets it is shown as a deduction from the concerned asset while if it is a provision for liability, it is shown in the liabilities side.
5.       Shown on the liabilities side.
6.       Dividend can never be paid out of provisions.
6.       Dividend can be paid out of reserves.
7.       Provisions can only be used, for which they are created.
7.       Reserves can be used for any use as per the decision of Management.

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Allocations - Practical question - 2016 - Books & Budget (with books)


Allocations - Practical question - 2016 - Books & Budget (with books)

For the following items of expenditure/earning give: Abstract of Allocation, Demand No. (Where applicable), Minor Head and Detailed Head.     20 marks

Answer:

Note:

1)   Due to merger of Rly.Budget with General Budget, all Demands 3 to 13 are now subsumed into Single Demand No.80 - Ministry of Railways.  The erstwhile Demands 3 to 13 are now named as Sub Major Heads (SMH) 01 to 11 under Major Head 3002 - Indian Railways Working Expenses (Commercial Lines) respectively. 

2)   Description of Demand/Minor Head/Sub Head/Detailed Head is given for the purpose of understanding.  Need not be furnished in answer sheets.

3)   Sub Head is not asked, yet furnished herein for perusal.

4)   For attempting these type of Allocation questions, hard copy of Finance Code Volume 2 (F2) is must for preparation.  Click for F2
5)   Answers are furnished accurately.  Still any discrepancy, please brought to the notice to me.


QUESTION
ANSWER
S.N
Abstract
Demand
Sub Major Head (SMH)

Minor Head (MH)
Sub Head(SH)
Detailed Head
a
Running repair of traction motor of Electric Locomotive (A.C)
C
05
R & M of Motive Power
03
500
Electric Locomotives
510
Running repairs in sheds.
512
Traction motors and other electrical rotating machines.

b
Imported stores purchased in India
P
(Capital)
16
Assets-Acquisition, 'Construction and Replacement.
_
7100
Stores Suspense
7120
Purchases-Indigenous purchase by Railways including Railway Board
7121
Imported stores purchased in India

c
Salary payment of FA&CAO
A
03
General Superintendence and Services.
01
200
Financial Management
210
Accounts
211
Officers
d
Difference between the ledger balance & ground balance discovered by the stock verifier
P
(Capital)
16
Assets-Acquisition, 'Construction and Replacement.
_
7100
Stores Suspense
7180
Stock Adjustment A/c
7182
Difference between the ledger balances and the ground balances, discovered during departmental stock verification
e
Penalties levied for irregular travelling by the TTEs in train
X
Coaching Earnings
-
-
700
Misc Coaching Receipts
710
Penalties levied for irregular travelling
712
Penalties levied for Irregular travelling by T. T.Es. in trains 
f
Expenditure on consultancy services for Passenger Reservation System (Computerisation).
-
16
Assets-Acquisition, 'Construction and Replacement.
_
1700
Computerization
1720
Passenger Reservation System
1725
Consultancy Software
g
Cost of Medicines.
J
11
Staff Welfare & Amenities
09
200
Medical services
230
Cost of Medicines
231
Cost of Medicines
h
Repair and working cost of staff car of General Department
E
07
R & M of Plant and Equipment
05
800
Other Plant & Equipment - General & Traffic Depts
830
Other repairs & Misc expenses
831
Service Motor Cars and Trolleys (Rail and Road)-Repairs and working cost.
i
Contribution towards cost of order police.
K
12
Misc. Working Expenses
10
100
Security
130
Order Police
131
Contributions towards the cost of order police
j
Receipt from car/scooter/cycle parking at stations/Rly. Premises.
Z
Sundry earnings

-
-
200
Rents & Tolls
240
Land
246
Receipts from car/scooter/cycle parking at Stations/Rly premises




PPTs on various Railway Accounts subjects


To browse different PPTs on Railway Accounts (more than 25)

Click below

Tuesday, May 29, 2018

Traffic Suspense


Traffic Suspense

2016 year - Station Accounts

             (i) What is Traffic Suspense?  ( 5marks)

(ii) Briefly explain the components of Traffic Suspense (5 marks)

(iii) How is Traffic Suspense cleared (5 marks)

(iv) Do you have any suggestions to improve the present system of Traffic Suspense clearance.(5 marks)

ANSWERS

(i) What is Traffic Suspense?  ( 5marks)
                                                                                
Traffic suspense represents the earnings accrued at Stations or otherwise but remains unrealised.

(ii) Briefly explain the components of Traffic Suspense (5 marks)

A) Station Outstandings :- Comprise of freight outstanding in respect of goods  on hand and not in hand, freight and demurrage awaiting realization from major parties such as power houses and State electricity boards, remission orders/CCOs, Credit authority awaited and accounts office debits. (admitted and disputed)

B) Accounts Office Balance sheet - Prepared for the purpose of taking the Carriage Bills into account and of watching their realization from the firms or departments concerned, as also for incorporating in accounts the traffic cash received otherwise than through the Station Balance Sheets (e.g. workshop profit, advertisement fees, sale of grass, fares of coupons sold by Tourist Agents, fares represented by Suburban Tickets sold in Head quarter offices, etc)

C) Cash in transit - Stations take credit in their Balance Sheets for cash realized by them in the month irrespective of whether it is remitted to and acknowledged by the Cashier in that month or in the subsequent month. Such station cash for which credit has been allowed to the Stations in one month but, which has been received in the Cash Office after the third of the following month and consequently included in the General Books in the following month, is called Cash in transit.

D) Demands recoverable - Purpose to bring into account all dues pertaining to
 (a) Land rent charges for Engineering and commercial plots. (b) Interest, maintenance charges and inspection charges for sidings. (c) Rent of buildings. (d) Maintenance charges for ROBs, FOBs and level crossings.

E) Miscellaneous


(iii) How is Traffic Suspense cleared (5 marks)

·         Admitted debits  are cleared by (i)  Paid in cash by the staff responsible;
(ii) Recovered through the salary bill of the staff responsible;(iii) Transferred to another station; (iv) If irrecoverable, the same should be written off by the competent authority. 

·         Objected debits:  - Clearance – On receipt and after examination in the Outstanding branch, the case is sent to TAO, where if the objection is found valid, necessary credit advice will be issued to the Station, who will take special credit in the Balance sheet on hand on its authority, sending the same in support of special credit.  If the objection is found incorrect, the case will be returned to the outstanding section with remarks rebutting the objection and the outstanding branch will inform the Station Master to bring the same under Admitted Debit and arrange to clear the debit.

·         Freight outstanding on goods/parcels on hand – cleared through delivery to the consignees. In the case of consignees not forthcoming for taking delivery, disposal in arranged by transfer to LPO or Auction Sale. For consignments received without invoices, booking stations are referred to ascertain the names of consignees for ensuring delivery

·         Freight outstanding on goods/parcels not to hand – Efforts are one made to trace them by reporting the matter to the Booking Station / Last train formation stations and also to the Claims branch.

·         Freight of invoices /PWP awaiting clearance through certified overcharge sheets.- cleared through certified overcharge sheets/special credits in Balance Sheets vice previous accountal of Memo deliveries etc.

·         Demurrage and  wharfage awaiting clearance through remission orders. – cleared on the basis of remission only as and when received.

·         Outstanding recoveries from power houses etc against match deliveries etc – to clear , it is enjoined upon the Station to arrange the periodic reconciliation with the Siding owners.(power houses) and arranging recovery of the net dues and adjustment of the balance through, certified overcharge sheets etc.

·         Imprest cash  -  These outstandings are continuing in nature.  However , obsolete tariffs and time tables etc are returned and credit taken for the value thereof.

·         Balances under AOB should normally be cleared within 3 months as these mostly pertain to Bills issued to Govt depts/ministries.  These should be pursued vigorously. On occasions, the Government depts dispute the debits such as those arising from revision charges for haulage of postal vehicles. These should be reported to Railway Board promptly for taking up with the Ministries concerned at higher level.

·         Duly watching the items under Demands Recoverable and pursuing with the parties if delays in realisation.
·          
(iv) Do you have any suggestions to improve the present system of Traffic Suspense clearance.(5 marks)
1.   PCCM to be strengthened. Non-availability of qualified TIAs in some Zonal Railways resulting in having no PCCM Sr.TIAs.

2.   Quarterly meetings should be held at CCM level with Sr.DCMs/ CIs/ Sr.TIAs.

3.   Court cases are to be monitored at appropriate level.

4.   Records pertaining to Disputed debits/ court cases are to be preserved irrespective of preservation time prescribed by Codes/ Rules.

5.   In case of Admitted debits of staff, recovery to be commenced and in case of retirements, ‘No Due Certificate’ to be obtained from Traffic Accounts Branch.

6.   Efforts to be made to recover from settlement dues/ relief of pension.

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