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CMA Final · Corporate Financial Reporting · Government Accounting in India

Under the constitutional framework of government accounts in India, which of the following is the correct description of the Consolidated Fund of India?

The Consolidated Fund of India holds all Union revenues, loans raised and loan recoveries, and withdrawals require parliamentary appropriation by law. Contingency Fund covers unforeseen expenditure, while Public Account covers trustee and banker-type receipts such as provident funds.

  1. AIt holds only the loans raised by the Union and is used solely for debt repayment
  2. BIt holds all revenues received by the Union, loans raised and recoveries of loans, and money can be withdrawn from it only under an appropriation made by lawCorrect
  3. CIt is a fund for unforeseen expenditure which the President may spend without Parliament's approval
  4. DIt holds the money received by the Union as a banker or trustee, such as provident fund deposits

Explanation

The Consolidated Fund of India comprises all revenues received, loans raised by the Union and loan recoveries. No money can be withdrawn from it except under an appropriation made by law. The unforeseen-expenditure fund is the Contingency Fund, and trustee-type receipts go to the Public Account.

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