5 - Chapter 2 Books of Original Entries

7/29/2019 5 - Chapter 2 Books of Original Entries

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Books on Original Entries

CASH BOOK CASH TRANSACTIONS

PURPOSE OF CASH BOOK

a) Cash book is the most important Book. The basic object of a Cash Book is tokeep a record of all receipts and payments of money so that the cash

balance in hand or that in Bank can be worked out on day to day basis.

b) In FCI the Cash Book is maintained to serve a dual purpose namely to haveday to day control over the Cash and balances and secondary to summarise

the transactions which is a stopping stone for compilation of accounts.

c) Cash Book has been split up in three parts and each part assigned a specificpurpose of function. In other words, the first three journals i.e. BE-I, BE-II

and BE-III together constitute a complete Cash Book.

RECEIPT CASH BOOK BE-I

Teh purpose of the Receipts Cash Book is to provide a complete record of all

cash, cheques money order etc. received in payment of sales and other

miscellaneous receivables and inward remittances from other FCI Offices.

For all the receipts of cash and cheques, demand drafts, etc. debit is to be

given to the cash or Bank Account respectively and a credit is to be extended to

the various title heads. Debits increase the Cash and Bank Balances and credits

against them are merely for the classification of the sources of receipts. For all

the receipts there is a common feature i.e. debit is to be given to the Cash or

Bank Account and credits are flexible, may go to various heads. That is why the

debit columns for Cash and Bank Accounts have been taken first in the design

of the receipts Cash Book.

More than one Bank Account can be maintained in the same Cash Book by

providing separate columns therefore. All collections/receipts whether in


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Cash/Cheques/Drafts or Moneyorders etc. received in payment of sales and are

to be entered in Receipt Cash Book i.e. BE-I.

FREQUENT & COMMON ENTRIES IN BE-I

On Real isa t ion of Debits

If it is in the shape of Cash Debit will be given to Cash Column, and in case of

Cheques/demand drafts/D.C. etc. bank Account will be debited with a credit to

the Sundry Debtors Accounts. This credit column is opened for Sundry Debtors

Account. Next to this, a small column is provided for subsidiary ledger folio

numbers for giving cross reference number of subsidiary ledger (Personnel)

accounts for checking the postings in the subsidiary led ger.

For Money Received on Cash Sales

As above the debits will be given either to the Bank Account or to the Cash

Account and the Credit to the Cash Sales control Account which is a national

head of account provided for the convenience of writing up of the book.

Classification of sales is done on regular Retail Sales Day control account and

crediting various commodity-wise sales accounts. Teh debits in cash sales Day

Book must be equal to the credits in the Receipts Cash Book. Thus the ultimate

entries in General Ledger will be debits to cash of bank and credits to various

sales account.

For Other Receipts

Recoverable make towards advance from employees, receipt of earnest money

or security deposits, sale of misc. items are some of the example of other

receipts. For all such receipts debits is to be accorded to the cash/bank and

credit to the appropriate head. A district may fix up the number of columns

according to its need and experience. Rest of the transactions which arerepeating very rarely in the month are to be entered in the credit column

named OTHER MISC TITLE HEADS. For all such entries in this column an

account number for classification is to be quoted against each entry in the

column provided next to it.


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Withdrawal from Bank

In Receipt Cash Book cash will be debited and Transfer-in will be credited. This

is also a contra head and in nullified by a contra entry in Transfer-out columns

of PAYMENT CASH BOOK. In payment Cash Book credit for withdrawal is to

be shown in the credit column in the Bank Account with a debit to a Nationalhead of account TRANSFER OUT. As and when entries are passed in

Transfer-in column of Receipt Cash Book, the contra entries are simultaneously

passed in the Transfer-in and Transfer-out are book transfers and are not posted

in General Ledger. The balance in these two heads must be NIL at any t ime. A

voucher should be prepared for such entries duly signed by the Assistant

Manager (A/cs).

Daily Closing of the Receipt Cash Book

1. Opening balance is to be distinctly shown on the 1 s t of every month. Itshould be separately underlined.

2. When all the transactions from the original voucher are entered in the CashBook, all the columns should be totalled in pencil. Opening balances are not

be included in these totals.

3. Comulative balance of all the columns are to be carried forward to the nextpage with due care.

4. At the end of each month the final total should be linked out and a postingsheet should be prepared for the entire month after incorporating the

details of Misc. Title Heads column.

5. The total of all the debit columns must be tallied with the total of the creditcolumns.6. One or two pages should be left at the beginning of each month for writingup the daily cash/bank balance statement.

Payment Cash Book BE-II

This is a specialised book for recording all the transactions of Cash or Bank

disbursement. Whenever a payment is made, an entry for credit to cash or bank

Account is a common fixed feature for this book. By giving credit to these

heads the Cash/Bank balances are reduced. Here the debits are for the

classification of disbursement. These classifications are flexible and depend on

the nature of transactions. Therefore, the first two column are taken first in

the payment cash book as credit to:

1. Cash Account.2. Cash Credit Account.


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In no case the credits can go beyond these two heads. Debit columns are

provided as per the requirement of routine transaction.

COMMON ENTRIES IN BE-II

On Payment of Sundry Creditors

All the payments against the bills of purchases and services rendered are to be

debited to Sundry Creditors Accounts. The receipt from the creditors will

form the voucher for this entry. A small column is provided next to it for giving

references of page numbers in the Sundry Creditors (Personal) Ledger. This

being a regular item, a separate column i s provided for this account.

On Payment of Pay & Allowances

Payment to employees are made on various account heads will require various

classifications. In order to keep the scope of the Payment Cash Book limi ted, all

such items are required to be shown in a temporary book head PETTY CASH

CONTROL ACCOUNT. The journal entry will be credit cash with a debit to Petty

Cash/Control Account is wiped off by a contra entry in Petty Cash Book by

crediting Petty Cash Control Account with a debit to various titles heads. This is

a book transfer for the purpose of convenience onl y.

On Cash Deposits in Bank

A regular accounting entry will be, debit bank with a credit of Cash account.

Payment Cash Book has got a credit column for Cash and Bank and debit is

available only in Receipt Cash Book. So as to complete the double entries a

book transfer is necessary. It is done through Transfer-out column of he

Payment Cash Book. The entry is Debit Transfer-out with a credit to Cash

Account. In receipt Cash Book the contra entry is simultaneously passed

debiting bank with a credit to Transfer Account. The ultimate effect is that

transfer-in is nullified by Transfer-out and no entry is debit bank with a credit

to Cash Account. These differences in tallying transfer-in and Transfer-out

columns of Receipt and Payment Cash Book.


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Other Disbursement

Any other classification for which columns have not been provided for, can be

entered in the last debit column i.e. OTHER MISC. TITLE HEADS.Corresponding account numbers for classifications must be given against each

entry appearing in this column so as to prepare head wise details at the end of

the month. It may also be kept in mind that any other column which is

essentially required due to the frequency of in the OTHER MISC. column. This

of course depends on the nature of transaction of each district off ice.

Daily Closing of the Payment Cash Book

All the disbursement vouchers should be entered in the payment cash book and

the columns should be agreed with total credits. The total should be

comulative for the entire month and shall be carried forward from one page to

the other. At the End of the Sheet will be totals shall be struck off and final

posting sheet will be prepared after incorporating the details of Misc. t it le

heads.

Daily Cash Balance Statements

The receipt and payment cash books being two independent journals cannot

show the position of cash or bank balances. These are to be drawn separately.

For this purpose opening balance plus total debits less total credits will give

the closing balance. In other words, opening balance plus receipts less

disbursements is the closing. These figures are available in Receipts and

Payments Cash Book i.e. Debits for Cash/bank in receipt Cash Book and Credits

in Payments Cash Book. This datewise statement showing the closing balance

position should be prepared in the beginning of the Receipt Cash Book. It is,therefore, necessary to leave one or two pages blank before writing up the

next months Receipt Cash Book. The Cash Balances shown by this statement

must be equal to the physical count made at the close of the day and should be

initiated by the competent authority.


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Petty Cash Book BE-II

As already discussed it is a part of PAYMENT CASH BOOK. Only classification of

various head is done in this book by debiting individual tit le heads and

crediting petty cash control account. Here also the routine columns for various

heads can be fixed as per requirement. Generally, stationary, printing, postage,

telephone, telegrams, travelling advances etc. repairs, maintenance etc. are

the usual column opened in this book. When all the entries in the Petty Cash

book the debit balance in the petty cash control account appearing in the

payment cash book must be equal to the credit balance of the Petty Cash Book.

These contra heads must tally.

Posting in the General Ledger

At the end of each month one page should be left blank before starting the

next month. A posting sheet should be prepared after a thorough scrutiny of

each Cash Book. When these are agreed, individual items should be posted in

the General Ledger Folio heads. A contra reference of the General Ledger Folio

number should be given in the posting sheet. It should be ensured that the

debits are posted to debit side and credits are posted to credit side. Book

transfers i.e. contra accounts such as Transfer-in and Transfer-out, Petty Cash

Control Account, Cash Sales Control Account etc. need not be posted in General

Ledger. But the agreement of the debits in one book must be ensured with

credits in other book.

Maintenance of Cash Voucher

All the voucher relating to each cash book should be kept separately. These

should be serially numbered. Specific code numbers should be given to the

vouchers relating to the Receipt Cash Book/Payment Cash Book / Petty Cash

Book etc. for example, Receipt Cash Book can be coded as BE-I/ Vr. No. At the

end of each month the voucher file should be got bound for a permanent

record.

The voucher should be supported by necessary documents.

1) Important


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Cash Book being a complete record of

Cash Transactions, It is most essential to keep it upto-date without any

alteration/erasing etc. It should also be maintained neat and clean. Any

mistake in writing should be rectified by contra entries to that effect. Over

writings should be strictly avoided.

MAINTENANCE OF OTHER JOURNALS

2) Purchase Day Book (BE-IV)

Purchase of foodgrains, gunnies and other commodities will be accounted for

through this book on a day-to-day basis.

The entries in the Purchase day Book in regard to all indigenous purchases will

be made on the basis of the duplicate copy of the bill submitted by the

suppliers. The original copy of the bill (duly receipted by the suppliers) will be

the Cash Voucher for entry in the payments Cash Book (BE -II).

The purchase cost to be entered in the Purchase Day Book will be the cost of

the naked grains wherever purchase/notified price are for naked grains. Where

the price are inclusive of gunnies/containers, the purchase cost will be the

total cost of gunnies/containers. Wherever there are procurement charges for

the cost of the grains/commodities, these will be entered in the Purchase Day

Book in the respective columns. Wherever quality cuts are imposed and the netprices paid for the grains are lower than the notified purchase prices, the cost

and the deductions on account of quality cuts will be entered separately in the

columns provided therefore. If there are any deductions by way of adjustment

against the loans, advances etc. these will be entered in the appropriate col.

provided therefore, in the Purchase Day Book the net amount Sundry

Creditors. All accounting policy & conventions as discussed in Accounting

Concepts & Conventions should be followed while making e ntries in this book.

Each of the Purchase Day Books will be totalled at the end of the month and a

posting sheet prepared. The posting sheet will indicate the debit to the

purchases of procurement charges and credit to sundry creditors, loans,

advances, deposits, income from quality cuts, etc. according to the prescribed

heads of accounts. The posting sheet will clearly indicate the Purchase Cost,

Income from quality cuts, procurement charges (item-wise) or port clearance


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charges (item-wise) or port clearance charges (item wise in respect of each

commodity distinctly).

3) Sale of Day Book (BE-V)

The sales of the Corporation consist of foodgrains, fertil izers, sugar and other

commodities.

The sales transactions will be recorded i n the following columnar books:

i) Sales Day Book for Credit Sales - BE-5Aii) Sales Day Book for Cash Sales BE 5B

The sales of foodgrains, fertil izers, gunnies and other commodities will be

recorded in these books on a day to day basis, so that they provide a complete

record of all sales made to outside parties. These books of original Entry will be

in forms prescribed.

Separate Sales Day Book (Separate folio in the same Sales Day Book depending

upon the magnitude of the transactions) will be maintained for each of the

food grains like wheat imported, wheat indigenous, rice imported, rice

indigenous, etc. Separate folio will also be maintained separately in respect of

each commodity (or separate folio in the same Sales Day Book will be allotted

depending upon the magnitude of the transactions) for sales etc. (I) Govt. o

India/ Deptt. of the Govt. of India/Union Territories (ii) State Govt. and their

agencies/corporations (separately) ( i i i) Roller Flour Mills ( iv) Fair Price Shops

and (v) Other private parties (to be specified). In respect of the sales to State

Govt. and their Agencies/Corporation and Fair Price Shops the folios will be

maintained separately depending on whether the issues are made at (I) Central

Issue Prices (ii) Central Issue Prices plus incidentals / margins agreed with the

State Govt. for wholesale distribution and (ii i) issue rates negotiated with the

State Govts. for procurement and distribution under taken upon their behalf.

Collections on account of sales tax will be shown separately in the columns

prescribed therefore, in all the Sales Day Books.

1) Sales Day Book for Credit Sales

The sales of foodgrains effected by the Corporation as at present are mostly on

cash basis. In respect of such cash sales, sales bi l ls are not required to be

prepared and the release orders containing all the particulars including value of


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sales would themselves serve the purpose of the Sale Book. Wherein exceptional

cases, sales are made on credit basis & the bills are to be prepared immediately

after the sales are effected. The vouchers for recording credit sales wil l be the

sales be the sales bill .

Credit sales will be brought into account by debiting Sundry Debtors account

and crediting Sales Account. A separate subsidiary ledger will be maintainedfor recording the sales effected, realisation etc. made.

i i) SALES DAY BOOK FOR CASH SALESThe vouchers for entry in this book will be the individual Release order or

a consolidated statement or Release orders, as the case maybe. Where

posting is done from the constitute the sub-voucher along with main

voucher.

Cash sales will be accounted for by debiting to a control account styled

Cash Sales Control Account with contra credit to the sales account.

The figures relating to Cash Sales Control Account being contra tin nature

need not be posted in General Ledger account though these items will be

entered on the posting sheet of the sales day book. The figures

appearing under Cash Sales Control Account in the monthly posting

sheets will be paired off with the corresponding figures appearing in the

receipt Cash Book (BE-I).

IMPORTANT INSTRUCTIONS

i) Sales turnover for the purpose of sales tax wil l , in al l cases, be thenet sales realisation only (gross sales minus discount, retailers

margin, retai lers t ransportat ion charges etc.).

i i) Complete reconciliation of sales with depot statements will beeffected SC as to ensure agreement of the sales quantities as per

depot stock records with the district accounting records. This

reconciliation must be completed before the preparation of the

final accounts.

i i i ) Complete reconciliation of cash sales will be ensured between thereceipt Cash Book and the sales day book on a day to day basis so

that at the time of finalisation of accounts no debit or credit

balances remain unadjusted under the Cash Sales Control

Account.


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iv) Accounting policies & practices as discussed in AccountingConcepts & Conventions should be followed while making entries

in this book.

L) INTER OFFICE MOVEMENTS:Movement of stocks from are depot to another is called Inter Office

Movement and will be accounted for in the following Books of Original

Entries:

i) All Inter Office transactions of commodities in the nature ofreceipts will be recorded in the register of Inter Office Transfers-in

(BE-6).

i i) All such issues will be recorded in the register of Inter OfficeTransfer-Out (BE-7).i i i )

IMPORTANT INSTRUCTIONS:

i) Separate Inter Office transfer invoices have to be prepared for transferof stocks (a) between the depots in the same district (b) between the

depots (c) between the depots in different regions but within the same

Zone and (d) between the depots in different zones.

ii ) The Inter Office transfer invoices will be prepared and issued on a day today basis.

i i i ) Every consigner district office will send a monthly statement to each ofthe consignee district office with copies to the consigner and consignee

Regional Offices giving full details of the transfer invoices issued during

the month. The consign district office shall also record a certificate in

the monthly statement that all the Inter Office transfer invoices

required to be issued from the district for the despatches during the

month have been issued.

iv) Every consign district office will send a quarterly statement ofunaccepted invoice, to each of the consignee district offices, with copies

to the consigne and consignee Regional Offices. Appropriate and timely

action should be taken at Regional/Zonal /Headquarters to coordinate

the work with a view to ensure that the pending invoices are accepted bythe districts concerned and the duplicate copies of invoices are returned

to the consigner promptly after recordin g acceptance.

v) The Inter Office transfer invoices received by the consignee districtoffices will be accepted on ad day to day basis after verification from the

daily statement of receipts the stock account of the depots/the RR

Register etc. maintained at the receiving end.


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vi) IOM advices should be accepted for the quality a has been indicated inthe invoice by the despatching ends. Any down gradation of quality at

the receiving and should be carried out in the accounts of receiving

district offices without disturbing the quality of the stocks mentioned in

the TOI by the Despatching ends. The disputes shall be persued by the

quality control branch.

M) FREIGHT PAYMENTSRAILWAYS CREDIT NOTE JOURNAL (BE-8)

i) Railway freight and other dues paid through Firm Credit Notes onmovement of stocks to the Railways will be accounted through Railway

Credit Notes (Journal BE-8).

ii )

The amount of each firm credit note issued will be entered under thecolumn Sundry Creditors Railway Credit Note By debit to the

relevant expenditure heads of accounts under the appropriate columns

provided therefor. In case the payment is made by offices against the

Railway Credit by debit to account Sundry Creditors Railway Credit

Notes in payment Cash Book (BE-2). Where the payment is made by an

office other than the office will pass on the debit note, such paying offi ce

will pass on the debit to the issuing office through an advice under Inter-

Office Railway Credit Notes. The payment made will be debited to Inter

Office Railway Credit Notes by credit to Bank Account in Payment in

Payment Cash Book (BE-2). The advice will be responded by the office

issuing the credit note by debit to Sundary Creditors Railway Credit

Notes. The credit notes will thus represent the liability on account of

unpaid railway Credit Notes.

i i i ) The facility of payment of Railway dues through E.C. notes is subject tofurnishing of Bank Guarantee is entered into an Agreement with the

Zonal Railways where this facility is not available. The payment to

Railways may be made through D.D. & in such cases transaction shall be

accounted for through BE-2.

N) CLAIMS RECOVERABLE JOURNALS (BE-9)i) Claims are preferred by the Corporation on the Railways towards

shortages in weight, shortages in whole bags, missing wagons, damage to

stocks and excess payment of freight, demurrages e tc.

ii ) The Corporation prefers claims on the shipping agents for voyageshortages and damages to the stocks during voyage.

i i i ) Claims arise on account of Despatch Money earned by the Corporationand the wrong excess payment of Ports Charges and Custom Duty.


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iv) Claims also arise from rice millers, handling and transport contractorsand other parties for shortages, failure to fulfil contractual obligation

etc. All such cla is recoverable are accounted for through SE-9.

v) The claims for compensation for rail transit shortages damaged & non-delivery are preferred on central issue price applicable to PDS, fixed by

G.O.I. & as circulated by Headquarters from time to time. Forcommodities not covered by central issue prices, the cost/sales Divn. At

Headquarters should be approached for the claimable rate s.

C) JOURNAL (BE-10)The purpose of the Journal is to provide a complete record of the

transactions which are not recorded in any other book of Original Entry,

such as transfers, adjustments, corrections of accounts etc.

A loose-leaf journal sheet will be used. These sheets are to be

numbered serially from 1(one) upwards and this will be referred to in

postings to ledgers. A full explanation necessitating the entry will be

written beneath that entry on the journal sheet or on the collateral

supporting the entry. The debit and credit entries will preferably in the

same sheet. When this is not possible, a continuation sheet will be used

to complete the entry which will be ar the same number as the first sheet .

It should be marked Continuation Sheet.

All entries will be supported by proper documents.

PAYMENT OF BILLS

The Corporat ion spends money on various accounts an for many purchase

procurement, salaries, allowance etc. handing, go down operations, bills from

contractors, contingencies etc. The Corporat ion has laid down a detai led

procedure for payment of claims received on account of various supplies and

services which i t obtains for i ts da y today operat ions.

BILLS

All claims on the Food Corporation of India are paid against bills prepared in

the prescribed forms showing full particulars of the supplies made or services

rendered, alongwith sanctioned rates and calculatio ns showing how the amount


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claimed is arrived at supported by necessary documents and certificates. The

scrutiny of bills and (in many cases) their preparation also is one of the

important functions of the Accounts Branch. The detailed particulars to e

shown on the bills and the requirements as to the supporting documents and

certificate depend on the specific nature of the particular claim in question.

All types of payments namely payments t o Sundry Creditors payment of pay and

allowances, petty cash disbursement and their disbursements represent claims

against the Food Corporation of India and therefore, require to be made on the

basis of bills. The Sundry Creditors have to prepare their bills for the supplies

or services giving full particulars there of and gucting reference to the sanction

or authority on which their claim is based. As regards pay and allowances and

other personal claims of the employee of the Food Corporation of India the

bills are prepared by the Accounts Branch. Before we consider the various

types of bills, mention may be made of the following basic principles which

apply to all types of bills:

i) Every bill should be prepared in the prescribing the competent authority,either general or special.

i i ) The bills for pay and allowances should be in respect of posts sanctionedby the competent authority and in respect of persons entitled to draw

pay and allowance with the other conditions, prescribed by the

competent authority for drawal of pay and allowances.

i i i ) The bills of private parties should be pre-receipted on revenue stampaffixed thereon.

iv) Proper certificates should be attached to the bil l.v) The expenditure covered by the bill should conform to the basic

principles of financial propriety.

Personal Claims of Employees:

These consists of the regular salary bi l ls for monthly pay and fixed al lowances

as well as claims for other allowances like travelling allowance, medical

reimbursement, overtime allowance, children education allowance, arrears of

pay fixed allowance etc. While preparing the bills it should be ensured that thepay for each employee is drawn at the correct rate admissible to him in the

prescribed time-scale award that the fixed allowances are drawn at the

prescribed rates in accordance with the prescribed condit ions. Joining t ime, pay

and leave salary should be drawn on the basis of the orders of the competent

understanding of various prescribed conditions for drawal of pay and allowances

should be supported by either a certificate of medical fitness on first

appointment or the last pay certificate, as the case may be. A detailed record of


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the pay and allowances drawn, deductions made and net amount paid to each

official is maintained in a Control Register in Form Nc. 8.3. The purpose of this

register is to ensure that no duplicate payments made to any employee for any

period. In order to ensure that pay is not drawn for officers and staff in excess

of the sanctioned strength, the scale Register of pay and allowances should

contain the certificate that these were not drawn previously and that necessarynote has been kept on the original bi l l for the period to which the arrears

pertain. Medical Reimbursement bills are to be supported buy necessary

prescriptio9n, cash memos and essentiality certificate in the prescribed form.

After the bi l ls are preferred, these are duly checked and passed by the Drawing

and also counter singed where necessary, by the Controlling Authority.

Claims of Contractors and other Private parties:

These should be scrutinised by the Branch or Depot Concerner with reference to

the original order, contract, agreement or other authority. A certificate of

scrutiny should be recorded along with the cert ificate that the services havebeen rendered satisfatorily or that the supplies have been received in full and in

good condition and duly taken to stock register. The rates and calculations

should also be checked and deduction if any proposed should also be clearly

indicated by the authority which receives the supplies or obtains the services.

The bill will thereafter be clearly indicated by the authority which receives the

supplies or obtains the services. The bi l l wil l thereafter be scrutinised further by

the Accounts Branch with reference to the sanction, contract or agreement, rates

and calculat ions etc. and passed for payment of such amount as maybe

admissible.

Contingencies and office Expenses:

These items generally consist of supplies or services i .e. purchase of stationery,

printing, liveries, petrol, service charges of the vehicle, water and electricity

charges, postage, telegram and telephone charges, rent and taxes etc. The same

principles as applicable to claims of contractors and other private parties should

apply mutate to such claims.

Contracts

The bills should be scrutinised very carefully with reference to the terms of the

contract and in case there is any ambiguity, proper clarification should beobtained in consultation with the Branch or Department concerned as well as the

appropriate financial and legal authorities. In addition to this, each and every

contract as and when it is entered into should be carefully scrutinised with a

view to see that the basic guiding principles prescribed for entering into

contract on behalf of the Food Corporat ion of India have been scrupulously

observed. Any deviation noticed in this respect should be brought to the notice

of competent authority for orders.


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q) STOCKS ACCOUNTSi) In FCI one Stock Ledger is maintained at the Depot Level and other at the

District level. While the Depot Stock Ledger is maintained in terms of

quantities only, the Distt. Office Stock Ledger is in terms of quantities aswell as values. The Ledger serve as a means to arrive at this book,

inventory and also as an independent means to check the accuracy of the

depot stock account as received in the Distt. Offi ce.

ii ) The Stock Ledger will be maintained according to the location of thestocks. For the stocks given to the miller and for milled stocks with them

each miller will be tr eated as a location of stock.

i i i ) Separate folio will be maintained in the stock ledger for quantity andvalue. Separate folio will also be allotted for each (a) commodity (b)

variety (damaged stocks in each commodity will be treated as a separate

variety).iv) In case in any commodity procurement operations are done on behalf ofState Government separate folio will be maintained for State Operation

commodity/variety-wise.

v) The variety-wise classification for paddy/rice procured on CentralGovernment account will be as per Central classification viz. Superfine,

fine nd common and the variety-wise classification or Paddy/Rice

procured on State Government Account will be as the State classification

as notified in the price control order of the respective states.

vi) Separate stocks ledger folios will also be maintained for :(a) new gunnies (in Qty. and Value)(b)Second hand gunnies purchased (in Qty. and Value)(c) Released second hand gunnies (in terms of Quantity only)(d)Other stores and spares (in terms of value only).

The second hand released gunnies from silos and from replacement

will be accounted for in the c category above.

vi i) The source of entries which are made in the Stock Ledger folios will bethe books of Original Entries and their vouchers. The references to these

books and vouchers will be entered in the columns provided there for.

vi i i ) The opening balance in the Stock Ledger will be the closing stock of theprevious years in quantity and value as communicated byHeadquarters/R.O. through IOG advices.

ix) The Purchases of indigenous stocks will be posted in the Stock Ledgerfrom purchase Day Book for quantity and value. The purchase cost of

Rice/Wheat Indigenous and paddy will correspond to cost of raked grains,

exclusive of procurement charges entered in the purchase Day Book.

x) The procurement charges of Wheat/Rice indigenous and paddy will beentered as other cost and these include purchase tax, sales tax, octroi


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paid at the time of purchases, commission to purchase agents, market

fee, labour charges incurred at procurement centre for fil l ing of bags,

weighment, loading into trucks etc. charges on account of internal

movement of stocks from Mandi to Rail head o Depot, temporary storage

charges paid in mandi before moving the stocks to Rail head or Depot,

forwarding charges and interest/storage/ administrative chargespaid/payable to the State Govt. in connection with the purchases.

xi) Where the consignments are sent for the Depots under t he jurisdiction ofthe Districts but from the Depot record it is established that the wagons

were not received/diverted til l the closing of accounts, such wagons

would be treated as missing wagons and the quantity and value of such

wagons as per transfer-in invoices will be termed in the Column

Transfer-in for missing wagons.

xii) The transfer-in invoices are also received as a result of re-organisation ofthe districts because some depots are transferred to the jurisdiction of

the district. The entries i n such cases will be made in a separate columns.

xiii) Issue of foodgrains should be made only on the basis of the release orderissued buy the District Manager after the cost of the foodgrains is paid to

him in advance by means if demand draft/deposits at call receipt payable

t the station at which the District Manager has his Headquarters. In

exceptional cases where centralised payments are received IOG advices

be issued to the district office f rom where stocks are to be issued.

xiv) In certain commodities in the monthly Stock Accounts transfers areshown from good to damage Accounts or vice-verse. Such transfers of

quantity are to be entered in the Stock Ledger in the folio of the

respective commodities. The value of transfer will be at the standard

rate or acquisition cost of the sound grain applicable to the commodity.xv) As per para above, the transfer-in quantity from Transfer Register is

entered on the receipt side of the Stock ledger. In cases where there is

exceeds receipt in the quantity as per monthly stock account than the

transfer-in than the excess receipt will be treated as transit gain and will

be posted in the column provided for.

xvi) As per monthly stock accounts, in certain commodities, same quantitiesare shown as storage gains. These gains will be posted every month in

the respective commodity column provided for.

xvii) As quantity of purchases of imported stocks is entered in the StockLedger from the bill of lading quantity the difference between the bill oflading quantity and actual quantity i.e. excess unloaded from ship will be

treated as voyage gain.

xviii) For the despatches of stocks from the depots for which transfer-outinvoices are prepared, the entries will be posted in the column provided

for in the Stock ledger from Transfer-out register.


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xix) For the T.O.I.s issued for the transfer of Depots with stocks due torecognition of Districts, the entries are to be made in the column

provided for.

xx) Where the stocks are issued by the depots against the release orders ofother district offices who have realised payment such issues will not be

treated as sales. Instead transfer-out invoices will be issued therefor andentered in the stock ledger in the column provided for that.

STOCK LEADGER SUMMARY

i) At the close of the accounting period, summary of the Stock LedgerFolios will be prepared by the District offices after consolidating,

commodity wise and variety-wise the quantity and value.

ii ) The stocks ledger summaries will be prepared separately for each varietyof foodgrains and also in consolidated form for all the varieties. Separate

stock ledger summaries will be prepared for wheat indigenous ledger

summaries will be prepared for wheat indigenous and wheat imported,

leave sugar and sugar imported. In the case of coarse grains, bye

products rice, pulses and barley, bye-products pulses stores and spares,

stock ledger summary eill be prepared in a tabular from and total to tally

with the respective grand totals given in the trial balance. Separate stock

ledger summaries will be pre pared for Good and Damaged foodgrains.

i i i ) In case of rice and paddy, the Stock Ledger Summaries are required to beprepared variety-wise for State operations transactions and for total

transaction comprising variety-wise central plus state operations. In case

of gunnies, separate stock ledger summaries should be prepared for (a)new gunnies, (b) second-hand gunnies from silos and replacement in

depot operations, in quantity only.

iv) The opening stock in value are communicated by theHeadquarter/Regional Offices through IOGs and therefore the value as

incorporated in SLS should tally with value as per (a) as communicated by

H.Q. (b) as reflected in the general ledger account heads No. 110001

onwards. The quantity will correspond to the closing stock shown in the

audited Stock Ledger summary of previous years.

ZERO ACCOUNTS- AN INTRODUCTION

i) Zero Accounts are those accounts which are operated to carry out thefinancial settlement of transactions/transfers between various

accounting units of the Corporation.

ii ) Zero Accounts are also called fictitious accounts because the transactionsbooked the rounder do not involve any exchange of value and the overall


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balances of the Corporation as one unit remain unaffected. The net result

of the bookings made under the zero accounts should be Nil on

consolidation of the account on the consolidation are discrepancies

which need to be located and settled.

i i i ) Since the transfer/transactions between various offices of th4eCorporations can be of different types, a mix up thereof can poseproblems in the reconciliation of accounts. Consequently to facilitate a

reconciliation in the event of my difference or discrepancy, the zero

account has been divided into several sub-head so that the transactions

of a particular type pr character only are booked under each such sub-

head and thus the area in which the difference is to be located in

narrowed down. The main sub-divisions of the zero account are I.O.M.

Account/I.O.R. Account/I.O. Rly. Credit Note Account and I.O.G Account.

iv) I.O.M. Account (100) All movements of the stocks from one office/Distt.Of the Corporation to another are to be accounted for through the

operation of I.O.M. Account. Interoffice Transfer out/in Invoices are the

basic documents to account for the transactions of this nature.

INTER OFFICE RAILKAWAY CREDIT NOTES ACCOUNT

The Corporat ion is enjoying Credit faci l i ty for making payment of rai lway

freight , siding charges etc. Instead of making the payment in cash, Firms credit

Note to the Railways are issued which is presented by them to FCI Bankers for

payment and are paid accordingly. The amount of each Firm Credit Note issued

will be entered under the column Sundry Creditors Railway Credit Notes by

debit to the relevant expenditure Heads of Accounts under. The appropriatecolumns provided therefor. In case the payment is made by offices against the

Railway Credit Notes issued by themselves, bank account will be credited by

debit to account Sundary Creditors Railway Credit Notes in Payment Cash

Book (BE-2) where the payment is made b y an office other than the office which

has issued the credit note, such paying office will pass on the debit to the

issuing office through an advice under Inter Office Railway Credit Notes. The

payment made will be debited to Inter Office Railway Credit Notes by

credit to

Bank Account in Payment Cash (BE 2) The advice wil l be responded by the

office issuing the credit note by debit to Sundry Creditors Railway Credit

Notes. The balance under Sundry Creditors for Railway Credit Notes willthus represent the liability on account of unpaid Railway Credit Notes.

INTER OFFICE TRANSFER OF ASSETS ACCOUNT:

For all the items of assets transferred from the office of the Corporation

to another necessary entries have to be passed through this head of the

account. The despatching office debits the net value of the assets


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transferred to this head of account by contra credit to the account of

assets involved, while the recipient office gives a credit to this head of

account buy centre debit to the assets account. Thus in net effect, the

balance under this account reduced to Nil and the asset stands transferred

from the books of the despatching office to that of the recipient office.

INTER OFFICE REMITTANCES (0.300)

This account is o0erated for remittances of funds from one office to the

other.

INTER OFFICE GENERAL ACCOUNT (0.400)

The Inter Office Transactions l ike receipts of money on behalf of the

other offices, payment on behalf of the other offices, payments on behalf

of other offices etc. are accounted for through IOG Account.

STANDARD RATES

I) In order to ensure timely preparation and submission of stock ledgersummaries and simplify the existing stock ledger accounting certain

Standard Rates have been prescribed. The introduction of these standard

rates has eliminated the inordinate delay and difficulty experienced by

the districts in completing the stocks ledgers.

II) These rates are intimated/circulated by Budget & Cost Control Divn. AtHeadquarters well in advance before commencement of the financial

year.

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5 - Chapter 2 Books of Original Entries

Documents

Transcript of 5 - Chapter 2 Books of Original Entries