What is Journal voucher Accounting? Journal Voucher

Journal voucher
What is  Journal voucher Accounting?

Meaning of journal voucher

Journal voucher is also called 'goswora voucher' in Nepal. Journal voucher is a primary and most important record of financial transaction in new accounting system. It is a kind of voucher, which is used for recording financial transactions of the government in regular order of dates. It is a book of original entry, because every financial transaction of the government is recorded first of all in this journal voucher. Therefore it is also called as the book of original retry. It is based on the principle of double entry system of book keeping i.e. every transaction has two aspects one debit and another credit. The audit general has prescribed the form of journal voucher format as designed by AGF No.10, which is maintained by both central and operating level officers. Journal voucher is the basis for recording transaction in ledger accounts.

From the above specimen form, there are a lot of things, which should be taken into mind while preparing journal voucher.

1. Name of office: name of the office, department or ministry should be written on the top along with the name of district, where the office is located.

2. J.V.No: it refers to the serial number of journal voucher.

3. Date: it refers to the date on which transaction is recorded.

4. Code No.: in this column, reference or code no, refers to the bill number; purchase order number etc. is written.

5. Particular: in his column, name of tge account to be debited and credited along with the short explanation about the financial transaction is written.

6. Ledger folio (L/F): in this column, page number of the ledger where the given transaction ar3 posted.

7. Budget head No: in this column, the budget expenditure heads for transaction affecting budget expenditures is written.

8. Debit Rs. in this column, amount to be debited is written.

9. Credit Rs,; in this column, amount to be credited is written.

10. Receipt no, an amount: receipt number of amount received and the amount (cash) received in words are written.

11. Cheque No. and amount: cheque number and amount of cheque in words for payment made thought cheques are written.

12. Designation: in this part, signature and designation of the person preparing the voucher with date is written.

13. Approved by: in this part, signature and designation of the approving the voucher along with the date are filled in this part.

Notes to be considered while preparing journal voucher

• Each transaction must be recorded in a separate journal voucher.

• While preparing journal voucher, the principle of double entry system of book keeping must be followed.

• The word B.E. must be used immediately after the word 'Dr' in the case of budget expenditure.

• The supporting documents of transaction must be attachment to the voucher, while making its approval.

• Proper narration number must be written for each transaction.

• Dr. before debit transaction and Cr. Before transaction must be written.

Rule for debit and credit while preparing journal voucher

The new accounting system of HMG/ Nepal is also based on the double entry system of book keeping. So the rules of debiting and crediting must be followed while preparing a journal voucher. It has already been thoroughly discussed earlier in commercial accounting. In the preparation of journal voucher, each and every transaction has two aspects i.e. debit and credit. A brief summary of rules of debit and credit can be presented as follows:

Rules of debit and credit on the basis of types of account

a. Personal account

Debit the received

Credit the giver.

b. Real account

Debit what come in

Credit what goes out.

c. Nominal account

Debit all the expenses or losses

Credit all the income gain and profit.

 Rules of debit and credit on the basis of increase or decrease in assets, liabilities, expenditure, losses, income etc.

Increase In assets.

Decrease in liabilities debit

Increase in expenses or losses

 Decree in income or gain

Decreases in assets

Increase liabilities. credit

Decrease in expenses or losses

Increase in income or gain

Types of journal vouchers

Operating level officer prepares the following three types of journal vouchers:

• Journal voucher for budget expenditures.

• Journal voucher for advance transactions.

• Journal voucher for miscellaneous transactions.

Journal voucher for budget expenditure

Journal voucher is also called general journal voucher or journal voucher for ordinary tractions. The journal voucher which is prepared to record the budget expenditures of government is called journal voucher for budget expenditures. To represent budget expenditure, the word B.E. is mentioned before the title of an expenditure under this journal voucher. For example, B.E. salary, B.E. allowance, B.E. rent, B.E. office operating expenses, B.E. furniture etc.

Types of journal vouchers
Operating level officer prepares the following three types of journal vouchers:
• Journal voucher for budget expenditures.
• Journal voucher for advance transactions.
• Journal voucher for miscellaneous transactions.
Journal voucher for budget expenditure
Journal voucher is also called general journal voucher or journal voucher for ordinary transactions. The journal voucher which is prepared to record the budget expenditure of government is called journal voucher for budget expenditures. To represent budget expenditure, the word B.E. is mentioned before the title of an expenditure under this journal voucher. For example, B.E. salary, B.E. allowance, B.E. rent, B.E. office operating expenses, B.E. furniture etc.
Budget expenditure voucher is prepared as follow:
Dr. B.E.(name of the budget head)
Cr. N.R. bank
Notes to be considered while preparing journal voucher for budget expenditure:
• The budget head or sub-head should be debited but not an item of expenditure.
• Budget head or sub-head number must be maintained in the prescribed column.
• All the payments are assumed to be through Nepal rastra bank except the case of petty expenses. So Nepal rastra bank should be credited in each transaction.
• A short or brief or complete narration should be written for an expiration of each traction.
• A separate journal voucher must be prepared for each transaction.
Journal voucher for advance transactions
The payment made in advance for purchase of goods and service is called advance expenditure. But it is not actual expenditure, but it is not actual expenditure; it is paid for purchase of assets. So, advance is recorded in the advance ledger account. accounting to new accounting system, advance expenditure are recorded twice:
• At the time of giving advances.
• At the time of advance clearance.
Journal voucher at the time of giving advance
An advance should be given to a person to make expenditure on budget head. When the advance is given, the journal voucher is prepared debiting the name and post of person taking advance and head against which the advance is given as following way:
Journal voucher for advance clearance
Advance is given to the person for specific purpose. The person taking advance has to submit necessary bills and invoice for the clearance of advance after the complete of the work. The amount of advance may be cleared in any one of the following ways:
• When the total amount of advance has been returned.
• When the amount of expenditure is equal to the advance.
• When the amount of expenditure is less the advance.
• When the amount of expenditure is less than the advance.
• When the partial clearance is made.
Rules for debit and credit for different conditions of advance clearance
1. When the total amount has been returned through bank voucher
Dr. NR Bank
Cr. Designation and name of received
Advance clearance of the relevant BH
2. When amount of expenditure is equal to the advance
Dr. B.E. the related BH
(With the amount of the expenditure)
Cr. Designation and name of the receiver
Advance clearance of the relevant BH
3. When amount of expenditure is more than the advance
Dr. B.E. the relevant BH
(With the amount of expenditure)
Cr. N.R. Bank
(Excess amount paid)
Cr. Designation and name of received
4. When amount of expenditure is less than the advance
Dr. B.E. the relevant BH
(With the amount of expenditure)
Dr. Cash or Nr bank
(With the amount of return)
Cr. Designation and of the receiver
Advance clearance of the relevant BH
(Being advance cleared by Mr.,/Mrs.…)
5. When the partial clearance  is made
Dr. B.E. (Name of the budget head)
Cr. Designation and name of receiver
Partial advance clearance of the relevant BH
(Being practical advance clearance by Mr. / Mrs.…)
Miscellaneous journal vouchers
The journal voucher is to be prepared, relating to other than budget expenditure and advance is called miscellaneous journal voucher. There are certain transactions, which do not after budget head and advance. The following transactions are recorded in the miscellaneous journal voucher.
• Revolving fund released
• Budget release
• Petty cash fund
• Budget transfer
• Distribution of salary and deductions made on it
• Security deposits
• Annual closing
• Rectification of error
Revolving fund release/ impress fund
Accounting treatment
Rules for debit and credit for revolving fund
1. When initial revolving fund received
Dr. Nr bank
Cr. Initial revolving fund
(Being initial revolving fund)
2. When additional revolving fund received
Dr. Nr bank
Cr. Revolving fund
(Being additional fund received)
3. When excess revolving fund refunded
Dr. revolving fund
Cr. N.R. Bank
(Being excess revolving fund refunded)
Budget release
Budget release refers to the amount received from treasury and comptroller in a monthly or three monthly for incurring regular expenses. HMG operating level officer like education health, municipality, village development committee, district development committee, public corporation, company etc. usually received for monthly budget releases for their expenses. These officers do not get impress fund.
Petty cash fund
Petty cash find is created by the NG office both central and operating level for the payment of different type of small expense like coolie, bus, fare, postage, tea and coffee, freight etc. it is not possible to pay such types of expenditure through cheque. Therefore, to pay such types of expenditure, HMG office created a fund which is known as petty cash fund. Journal voucher of petty cash fund are as follows:
1. When petty cash fund is created or established
Dr. petty cash fund a/c
Cr. N.R. Bank
(Being petty cash fund is created)
2. When making a reimbursement of petty cash fund
Dr. BE
Dr. BE
Cr. N.R. Bank
(Being reimbursement of petty cash fund)
3. When the petty cash fund is closed
Dr. BE expenses (budget exp.)
Dr N.R.Bank (unspent amount)
Cr. Petty cash fund
(Being petty cash fund by depositing balance amount into bank)
Budget transfer
The amount transferring from one budget head to another budget head is called budget transfer. In other word, if there is surplus amount in one head and deficit in the another head at the same time, it can be transferred from surplus head to deficit with the permission of ministry. It is not cash expenditure, thus you are not required to use the words. B.E. is not used while passing journal voucher. The journal voucher is this case will be as follow:

Distribution of salary and deduction made on it
Salary is paid to employees of government officer after deduction of provider fund and income tax. Journal voucher is prepared. While deduction is made at the time of the payment of salary, there are following types of journal vouchers.
Employees' provident fund
Provident from is a facility to the employees provided by the government officer to its permanent staffs, which will be given back to the employees after retirement.

Salary is distributed to employees every month for the services rendered by then after deducting 10% provided fund from the salary of each staff and then adds 100% of such deduction as contribution to his provident fund. Such as total amount should be deposited by the officer to the provident fund officer.
1. When journal voucher for salary and allowance distributed to staff as per payroll.
Dr. BE salary
Dr. BE allowance
Cr. Provident fund
Cr. NR Bank
(Being salary distributed to staff as per payroll)
2. When journal voucher for the deducted amount is deposited in the provident fund officer.
Dr. provident fund
Cr. N.R. Bank
(Being the deducted amount deposited into concerned account)
Income tax
Income tax is to be paid by the employee (staff) out of their salary. Income tax is deducted only from the taxable salary as per income tax act. Income tax act has been certain exemption limit of income for tax purpose. An employee should be paid income tax on the income over the exemption limit. The deducted amount of income tax must be deposited into the income tax office.
1. Journal voucher, while distributed after deducting income tax
Dr. BE salary
Cr. Income tax
Cr. NR Bank
2. When journal voucher, while deposit the amount of income tax office
Dr. Income tax
Cr. NR Bank
Provident fund loan
HMG employees deposit their provident fund in the provident fund officer. They can get a facility to tae loans in case of financial crisis, out of their provident fund deposit. Such loan is repaired in monthly installment basis by making deduction from their monthly salary.
Citizen investment fund
It is a voluntary investment, which can be made by interested employees in the scheme introduced by government. In other word, government has introduced a social security scheme called scheme of citizen investment fund. Therefore, the government officer makes a deduction in the monthly salary of employees and deposited it to the citizen investment fund officer. The employment gets interest on and they can utilize their fund when required.
1. when distribution of salary after deduction citizen investment fund
Dr. BE salary
Cr. Citizen Investment fund
Cr. NB bank
2. When deposit of amount deducted as citizen investment fund to the concerned officer.
Dr. Citizen investment fund
Cr. NB Bank
Personal loan
The personal of the government officer can borrow the loan from the officer. When they are in financial crisis. The loan taken by an employee from the officer personal loan. Such a loan is to be repaid by the employees in small installment deducted from their monthly salary.
1. When distribution of alary after deducing loan to employees
Dr. BE salary
Cr. Personal loan
Cr. NR Bank
2. When deposit of deducted amount into bank account of the office.
Dr. BE salary
Cr. Personal loan
Cr. NR Bank
Security deposit
Security deposits are concern with the amount received from the contractor or goods suppliers for supplying goods and services as security. The contractor should be deposited as supplier 5% of contract amount. Such amount will be refund after the competition of concerned contract. Thus, two journal vouchers are prepared to record the receipt and return of deposit.
1. When security deposit money is received
Dr. NR Bank (security deposit)
Cr. Security deposit a/c of Mr. /Mrs.
2. When security deposit money is refunded
Dr. Security deposit a/c or Mrs
Cr NR Bank
Loan
Loan the operating government office can receive loan or provide loan to other office with the approval of district treasury and comptroller's office. The loan is issued in the condition of repaying bank it later on. The journal vouchers are maintained by both officers (given and received) as follows:
a. When loan is received
dr. NR Bank
Cr. Office loan
b. When loan is repaid
Dr. Office loan
Cr. NR Bank
Rectification of errors
As error is a mistake, may be intentional or international and rectification denotes act of correcting the errors that have already committed in the process of preparing government account. There are several types of errors, committed; these errors should be ratified by preparing rectifying journal voucher. The following steps are preparing rectifying or errors:
• Make a correct entry
• Make a wrong entry
• Make the opposite of wrong entry
• Make a rectified entry
Notes: it can be prepared same as rectification of journal entries. Which is already discussed?
Annual closing
All the books of accounts of Nepal government officer are to be closed at the end of the ashard. At the end of the every year some temporary accounts like security deposit account. Advance account and loan to employees are closed. Likewise, other account should have been closed like petty cash fund a/c, budget release a/c, budget expenditure and bank a/c. the process of closing different accounts operating during the year for different transaction  is called annual closing. At the end of the fiscal years, the following types of closing entries should be made:
j. When artificial clearance of advance:
Dr. B.E.
Cr. Employees