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CMA Final · Corporate Financial Reporting · Government Accounting in India

Under the Government accounting system in India, which statement about the Public Account of India is correct?

The Public Account records money the Government holds as banker or trustee, such as provident funds and deposits. Withdrawals do not need Parliamentary appropriation because the money belongs to others. Tax revenues sit in the Consolidated Fund, while urgent unforeseen expenditure is met from the Contingency Fund.

  1. AIt records transactions where Government acts as a banker, such as provident funds and deposits, and withdrawals do not need Parliamentary appropriationCorrect
  2. BIt records all tax revenue and requires Parliamentary appropriation for every withdrawal
  3. CIt is used to meet urgent unforeseen expenditure subject to later reimbursement
  4. DIt records only loans raised by the Government and their repayment

Explanation

The Public Account holds money received by Government as a banker or trustee, such as provident funds, small savings and deposits. Payments from it are not voted by Parliament since the money is to be repaid to the depositors. Tax revenue belongs to the Consolidated Fund, and urgent unforeseen spending is met from the Contingency Fund.

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