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CMA Final · Corporate Financial Reporting · Government Accounting in India

Under the cash basis followed in Government of India accounts, a bill for supplies received on 28 March 2026 is paid on 4 April 2026. In which year is the expenditure recorded?

The expenditure is recorded in 2026-27. Government accounts follow the cash basis, recording transactions when money is actually paid or received, so a payment made on 4 April 2026 belongs to the new financial year even though supplies arrived in March.

  1. A2026-27, because it is recorded when cash is actually paidCorrect
  2. B2025-26, because the supplies were received in that year
  3. CBoth years in equal halves
  4. D2025-26, as a provision, and reversed in 2026-27

Explanation

Government accounts of the Union and States are kept mainly on a cash basis, so transactions are recorded when cash is received or paid, not when the liability arises. Payment on 4 April 2026 falls in 2026-27. Accrual treatment would book it in 2025-26, which is not followed here.

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