Subsidiary Accounts Records

Subsidiary Accounts Records

5 marks question in 2016 Books & Budget (with books)

«  Para 311 of Indian Railways Accounts Code   Clickfor Chapter 3 of Accounts Code Vol. one

«  In addition to General Books i.e., 1) Daily Cash Book 2) Monthly Cash Book 3) The Journal 4) The Ledger, the following Subsidiary Accounts Records should be kept by each Accounting circle.

1.       Register of Earnings - Should record the earnings of the Railway under all the detailed heads of classification prescribed in Volume II of the Indian Railway Financial Code. These registers may be kept in convenient parts to facilitate application of statistics of earnings.

2.       RAR - Revenue Allocation Registers - A separate Allocation Register should be maintained for Abstracts A to N.   Posted separately for expenses whether by cash or book adjustment (through journal voucher -JV).

3.       Registers of Works - A collective record of expenditure designed

A.      Control of expenditure with reference to the Estimates

B.      For effecting budgetary control

C.      To enable any material modification occurring being spotted.

4.       Suspense Registers - Reflect transactions which cannot immediately be charged to final heads. Examples are 

A.      Demands Payable Register

B.      Misc. Advances Register

C.      Loans & Advances Register

D.      Deposits unpaid Register

E.       Deposits Miscellaneous Register

5.       Register of Works expenditure classified under different sources of finance i.e., Capital, DRF, DF etc

«  These records are of the utmost importance in as much as they are designed to exhibit the details of the transactions under Revenue, Capital, DRF, DF & Suspense heads.

«  Separate set of the above subsidiary registers should be maintained to record the expenditure met from the contingency Fund.

«  Posted directly from the Vouchers or Summary statement of vouchers like CO7.

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Management Accounting Topics for LDCE

MANAGEMENT ACCOUNTING – IMPORTANT AREAS

Note:

1)       The below mentioned areas are arrived based on past question papers of LDCE for Accounts Department of various Zonal Railways

2)      The list is not exhaustive.

v  Functions of Management Accountant

v  Distinguish between Management Accounting and Financial Accounting.

v  Ratio Analysis

v  Break Even Point

v  Different types of Budget like Capital budget, cash budget etc

v  Different types  of costing like marginal costing, incremental costing etc

v  Cost Benefit analysis

v  Funds Flow, Cash Flow

v  PERT and CPM

v  Productivity Test

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