ACCOUNTING TERMINOLOGIES for B.Com I.Com

ACCOUNTING TERMINOLOGIES

Cash	It includes legal tender many, currency note, charges payable on demand, reminders transfer receipts, demand drafts and revenue stamps.
Cash Order	It is an order for payment issued by a District Treasury on a sub-treasury under its jurisdiction in favour of the person to whom money is due or who is responsible for its disbursement and payable in bank.
Charged Expenditure	As defined in article 81 of the constitution, certain expenditure met from the consolidated fund which may be discussed but not submitted to the vote of the National Assembly or Provincial Assembly.
Contingent Expenditure	All non-development expenditure, other than salaries and salaries related expenditure.
Grant	Funding provided to a ministry or Department through the schedule of authorized expenditure.
Supplementary Budget	An additional budget statement laid before parliament where funding for an existing service is insufficient or the need for a new services has arisen which was not included in the original budget.
Voted Budget Expenditure	It is that part of the annual budget statement relating to other expenditure submitted to the Assembly in the form of demands for grants on which the assembly votes.
Appropriation	It means the allotment of amount provided in the budget within a unit of appropriation of a particular sum of money to meet expenditure on a specified object or item or supply it is the amount provided in the budget for expenditure on a particular budget.
Administrative Approval	It is a formal acceptance by the department concerned of a proposal to incur expenditure connected with the requirements of that department. It is a financial sanction.
Re-appropriation	It means transfer of funds from one unit of appropriation to another.
Technical Sanction	It is the sanction of a Competent Authority to a properly detailed estimate of the cost of a work of construction or repair.
Competent Authority	It means the administrative department concerned acting in consultation with the FD or any other authority to which such power may be delegated.
Controlling Officer	It means in relation to receipts and expenditure under any head of account a Govt. servant designated.

Abstract	An intermediate schedule prepared to facilitate the consolidation of financial information.
Accounting entity	This term includes the centralized accounts offices including the Executive Engineer of a public works division and the self-accounting offices.
Accounts office	This term identify the offices carrying out the accounting work and typically includes the offices of the DAO, AG and AGPR.
Accounting period	The time period over which financial information is reported, normally either a year or a month..
Accounting policy	A set of specific rules which defines how a particular transaction will be treated and accounted for in the books of accounts. Where accounting policies are laid down in this manual, they always relate to specific treatment of a specific type of transaction.
Accounting record	Any document upon which accounting transactions are recorded or any other document issued or used in the preparation and processing of accounting transactions.
Advance	An amount paid by the Government to a contractor/supplier for the purpose of securing goods or services; or an amount provided to a Government employee for a specified purpose, and to be adjusted as per terms and condition of the advance.
Advice note	A list of authorized payments sent by an accounts office to a branch of the SBP or NBP. (includes daily advice, payroll advice, pension advice, direct credit advice)
Annual financial statements	A set of financial reports, produced after the close of the financial year by the Auditor-General of Pakistan for the Federal and each of the Provincial Governments.
Appropriation	An allocation of funds to a spending ministry or department on the basis of the Authenticated Schedule of Authorized Expenditure.
Approval	The permission given by an authority or a delegated authority to undertake a particular action, such as incurring expenditure.
Asset	Future economic benefits controlled by the entity as a result of past transactions or other past events. (MAP, Section 3.3).
Assignment account	A Government bank account established with the National Bank of Pakistan< to provide independent drawing facility for nominated projects and other activities, within the prescribed limitation..
Attached department	A department which has direct relation with a Division and has been declared as such by the Federal Government and represented in the Chart of Accounts entity code.
Audit trail	The capability to trace a particular balance from the financial statements down to its source documents and vice versa), as evidence that the balance is complete and accurate.
Authorization	(i) In accounting terms, the approval given by an authority or a delegated authority for a particular payment to be made. (ii) In the context of the Budget, the process of passing the Annual Budget Statement through the legislature for approval.
The Bank	State bank of Pakistan, or the National Bank of Pakistan as an agent of the SBP, unless otherwise specified.
Bank return	A batch of documents received from the bank including the bank, scroll, appoint vouchers, paid cheques and other documents.
Bank scroll	A daily advice received from a designated branch of the National Bank of Pakistan or State bank of Pakistan listing receipt collected and payments disbursed on behalf of the Government, against each of the Government bank account.
Budget	Defined in article 80 of the Constitution, a statement of the estimated receipts and expenditure of the Government for a financial year, referred to as the Annual Budget Statement.
Capital expenditure	(i) For the purposes of budgeting expenditure met from capital receipts, as given by a particular grant number in the Chart of Accounts. (ii) In accounting terms, expenditure incurred for the purpose of acquiring, constructing or enhancing physical assets or on schemes of capital outlay, as given by the object code in the Chart of Accounts.
Capital receipt	(i) For the purposes of budgeting, receipts obtained from sources of finance other than revenue (e.g loans). (ii) In accounting terms, receipts generated from the proceeds of sale of physical assets or receipts intended to set-off capital expenditure.
Cash accounting	A method of accounting that records cash payments and cash receipts only.
Cash balance	The amount held in a particular bank account in any point in time.
Cash flow	The net movement in the cash balances over a particular reporting period, given by the sum of payments and receipts.
Cashflow Statement	A financial report provided to show the net movement in cash over a particular reporting period, showing how and where the cash has been applied.
Cashflow forecast	An estimate made of likely future cash flows based on historical pattern of expenditures and receipts, knowledge of expected payments (demands), changes in Government policy and other factors.
Centralized accounting entity	Any accounting entity for which the Accountant General is responsible for the processing of its accounting transactions (e.g. certifying, authorizing and issuing payments) and maining its accounts.
Certification	A process undertaken by the DAO/AG/AGPR, including Executive Engineer of a public works division, involving verification (proper approval and validity and audit (scrutiny against irregularities) of a payment prior to it being made (previously) referred to as pre-audit).
Chart of account	A listing of codes on the basis of which accounting transactions are classified to provide meaningful financial information.
Claim voucher	A document submitted by DDOs to the DAO/AG/AGPR office, containing the particulars of a valid and duly approved claim for payment against a nominated budget head. (previously referred to as a bill).
Clearing account	A type of General Ledger account which is used to transfer a balance from one entity or process to another (includes exchange and settlement accounts).
Commitment	An obligation to make a future payment, the funds for which are reserved against the allocated budget of an entry.
Consolidated Financial Statements	A set of financial reports produced by the Pakistan Audit Department which presents a consolidated summary of the Annual Accounts of the Federation and each Province.
Consolidated Fund	Defined in article 78 and 118 of the Constitution, refers to all revenues received to the Federal / Provincial Government, all loans raised and all moneys received in repayment of any loan by that Government.
Consolidated Monthly Accounts	The monthly financial reports produced by the AG/AGPR, which present a summary of the accounts of the Federation / Province.
Consolidation	Aggregation of information from several entities to present as if one entity, therefore, eliminating transaction between the entities being consolidated.
Contingent	All non-development expenditure, other than salaries and salary related expenditure.
Control account	A type of general ledger account which summarizes a number of transactions from a subsidiary ledger into a single balance.
Delegated authority	An officer formally empowered by the responsible authority to perform a particular function.
Department	The equivalent level of a Division, in the case of Provincial Governments, as given to the Rules of Business and listed in the Chart of Accounts entity code.
Development expenditure	Expenditure provided in grants, relating to development projects. Development projects are projects undertaken to acquire, build or improve physical assets or development human resources.
Direct credit	A facility provided by the banks which allows salaries and other employee related payments to be made directly into the bank account of those person, without the need for an exchange of physical cash or cheques.
Disclosure	Display of financial information in a supplementary note to the financial statements, rather than in its main body in order to provide further detail about a particular item.
District	A district region within a Province, as determined by the Government and shown in the Chart of Accounts entity code.
Division	A self contained administrative unit responsible for the conduct of business of the Federal Government in a distinct and specified sphere and declared as such by the Federal Government and included in the Chart of Accounts entity code.
Double entry system	A system of recording accounting transactions which requires all journal entries (inputs) to the General Ledger to be in balance, i.e. total debits equal total credits.
Entity	An organizational unit of Government. This term can be applied to specified types of organizational units, depending on the context (i.e. self-accounting entity, centralized accounting entity, spending entity).
Equity	An accrual accounting concept defined as the residual interest in the assets of an entity after the deduction of all its liabilities.
Exchange account	A general Ledger account through which transactions between centralized accounting entities and self-accounting entities of the Federal Government are recorded.
Excess	An amount of expenditure exceeding the approved budget, which is regularized through an Excess Budget Statement.
Exempt entity	An entity outside the scope of the manual of Accounting Principles and related manuals.
Expense	(i) In accrual accounting, defined as decrease in future economic benefits in the form of reductions of assets or increases in liabilities of the entity, other than those relating to distribution to Government as owner, that result in a decrease in equity. (ii) In cash and modified cash accounting defined as the outflow of cash arising as a result of payments issued in a given reporting period.
Financial asset	A reporting classification of assets, used to described cash held and any assets readily convertible to cash.
Financial year	The financial year commencing 1 July and ending 30 June, consisting of twelve monthly periods.
Fixed assets	Assets characterized by their long-term or strategic purpose. Fixed assets are usually physical in nature, such as plant and equipment, buildings etc. In financial reporting, used synonymously with ‘non-financial assets’, because they are not readily convertible into cash.
Flowchart	A graphical display used in the manuals and other documentation, to represent the flow of information and controls within a process or group of processes.
Function	An element used in the Chart of Accounts, which provides financial information on particular economic activities, according to the International Monetary Fund’s Government Finance Statistics (GFS) classification scheme.
fund	A pool of money, set aside and used for an intended purpose, as provided by legislation or special orders (e.g. Consolidated Fund, trust fund).
Funds available	A term used in budgetary control to describe the remaining budget allocated to an entity, after deducting outstanding commitments and actual payments.
General ledger	The primary ledger in which accounting transactions are recorded, in double entry format, and form which financial reports are produced.
General policy	A set of general rules which defines how a transaction is treated in the books of accounts.
Grant	Funding provided to a Ministry or Department, through the Schedule of Authorized Expenditure.
Imprest account	Petty cash system for making small payments. Contains a set balance of cash which is subsequently replaced by petty cash vouchers on payment of cash.
Internal controls	A term used to describe the system of checks, reports and procedures that are enforced in an accounting system to project against fraud and to ensure complete and accurate financial information is produced.
Journal entry	A uniquely numbered input voucher to the General Ledger, containing accounting transactions, used in the double-entry recording system.
Liability	Future sacrifices of economic benefits controlled by the entity as a result of past transactions or other past events.
Materiality	An amount is material to the accounts if its omission or misstatement is likely to influence the economic decisions made by the users of the information.
Memorandum account	An account maintained separately to the General Ledger but still operated within the internal control process. Information recorded in memorandum accounts is used to provide supplementary information to the Finance Statements.
Modified cash	A method of accounting in which all cash payments and receipts are recorded, along with certain assets and liabilities/commitments.
Non-development	Expenditure provided for in grants, relating to the ongoing costs of Government, such as salaries and allowances of employees and contingent expenditures.
Object	A chart of Accounts element used to classify financial information according to the IAS accounting requirements (e.g asset, liability, revenue, expenditure, equity), and provide sub-classifications therein (e.g. salaries, travel, transport).
Obligation	Obligation in the context of commitment means the legal requirement to honour the terms of a contract rather than the term “commitment” which is used in its accounting context.
Payroll section	The section within the DAO responsible for preparing the payroll.
Permanent record	A record required to be maintained in order to generate accounting transactions, but is not in itself a transaction. (e.g. payroll records, GP fund records. pension records).
Personal ledger	A ledger account maintained by the DAO/AG/AGPR, established as a drawing facility for nominated purposes.
Public Account	Defined in Article 78 of the Constitution, all other moneys received by or on behalf of the Federal Government, other than the Consolidated Fund, or deposited with the Supreme Court or any other court established under the authority of the Federation.
Public debt	The total liability arising from the borrowing of the Government, including both domestic loans and foreign (or external) loans.
Receipt	(i) An amount of cash collected or the process of collecting money. (ii) An official document provided to a payer, as proof that money was received.
Receipt voucher	A form with which amounts collectable by the Government are deposited with the bank, containing the particulars of the receipt. (previously referred to as a challan).
Recognize	Reported on, or incorporated in amounts reported on, the face of the financial statements of the entity.
Reconciliation	A process of substantiating recorded financial information against an alternative source of data (e.g. bank reconciliation, reconciliation between accounts offices and spending departments).
Release	A sanction given by Ministry of Finance, permitting a particular budgetary allocation to be spent, on the basis of cash being available.
Revenue	(i) in accrual accounting defined as increase in future economic benefits in the form of increases or enhancements of assets or decreases of liabilities, other than those relating to contribution by the Government as owner, that result in an increase in equity. (ii) In cash and modified cash account, defined as an inflow of cash, arising as a result of collections received in a given reporting period.
Self-accounting entity	Any accounting entity that performs its own accounting function and maintains its own accounts, including certification, authorization and issue of payments.
Settlement account	A general ledger clearing account through which cash transactions between Governments are recorded.
Special deposits	Accounts comprising of Public Account moneys that are operated under the authority of Ministry of Finance, but are not trust accounts.
Statement of Assets and Liabilities	A financial report consisting of balances of assets and liabilities for an entity, as at a particular period end date. Set out in the Financial Reporting Manual.
Statement of Revenues and Expenditures	A financial report consisting of balances of revenues and expenditures for an entry, over a given reporting period. Set out in the Financial Reporting manual.
Sub-ledger	Book of initial entry of all accounting transactions in a particular accounting office, for subsequent double entry into the General Ledger.
Supplementary Budget	Provided in Article 84 of the Constitution, an additional budget statement laid before Parliament, where funding for an existing service is insufficient, or the need for a new services has arisen which was not included in the original budget.
Surrender	An amount included in the original approved budget, that is given back because it has not or all will not be spent in the financial year by the entity.
Suspense account	An account used if the correct head to be debited or credited is unable to be identified at the time of transaction, which shall be cleared once the correct head is identified.
Trust Account	Legal entities in their own right, under the stewardship of the Government, and as such expected to produce financial statement in their own name. Trust accounts are normally established under an Act of Parliament or Presidential Order.
Voted expenditure	Ads defined in Article 82 of the Constitution of Pakistan that part of the Annual Budget Statement relating to other expenditure, submitted to the National Assembly in the form of demands for grants, on which the Assembly votes.
Book Transfer	Denotes the process whereby financial transactions which do not involve the giving or receiving of Cash, or of Stock materials, are brought to account.
Disbursing Officers	Means in relation to expenditure under any head of account a Government Servant designated.
Financial year	Means the period from 1st July to 30th June both days inclusive.
Grade	Means National Scales of pay, in which a number of posts, in a functional units, carrying same duties and responsibilities is placed.
Non-recurring Expenditure	Means expenditure sanctioned as a Lump sum charge whether the money be paid as a lump sum or by installments. Usually this is called developmental expenditure and the recurring expenditure is called Non-Developmental.
Officer	Means Government Servant holding a post in National Pay Scale No. 16 or Higher National Pay Scale.
Official	Means Government Servant holding post in National Pay Scales No. 1 to 15.
Recurring Expenditure	Means expenditure of a kind that originality recurs from year to year.
Administrative Department	Means a self-contained Administrative Unit in the Secretariat responsible for the conduct of business of Government in a distinct and specified sphere and declared as such by the Government.
Pre-Audit Cheque	It is a cheque issued by the Accountant General or any Officer of the Pakistan Audit Department in payment of a claim after audit.
Provincial Consolidation Fund	Means Account defined in Article 18(2) of the Constitution of the Islamic Republic of Pakistan.
Public Account of the Province	118 (1) All revenues received by the Provincial Government, all loans raised by that Government and all moneys received by it in repayment of any loan, shall form part of consolidated fund, to be known as the Provincial Consolidated Fund. (2) All other moneys:- (a) received by or on behalf of the Provincial Government; or (b) received by or deposited with the High Court or any other court established under the authority of the Province. Shall be credited to the Public Account of the Province.
Sub-Ordinate Authority	Means any authority sub-ordinate to the Administrative Department of the Government.
Object Classification	It signifies the purpose of the expenditure relating to each function. It has been divided into major, minor and detailed objects.
Supplementary Grant	Means an amount included in the schedule of Authorized Expenditure relating to a Supplementary Budget Statement of a financial year.
Modified Grant or Modified Appropriation.	Means the sum allotted to any unit of appropriation as it stands on any particular date after it has been modified by the re-appropriation or supplementary grant sanctioned by the Competent Authority.
Accounts	Means actual receipts or expenditure recorded by the Accountant General for a financial year.
Functional Classification	A function denotes the Government Agency entrusted with the particular expenditure. Different Government agencies have been grouped into major, minor and detailed function.