TOPIC 4: Government Accounting Terminology

Meaning of the term Accounting
Define the term accounting
is the systematic and comprehensive recording of financial transactions
pertaining to a business. Accounting also refers to the process of
summarizing, analyzing and reporting these transactions. The financial
statements that summarize a large company’s operations, financial
position and cash flows over a particular period are a concise summary
of hundreds of thousands of financial transactions it may have entered
into over this period. Accounting is one of the key functions for almost
any business; it may be handled by a bookkeeper and accountant at small
firms or by sizable finance departments with dozens of employees at
larger companies.
Meaning of the Term Accounting Officer
Explain the term accounting Officer
ACCOUNT OFFICER-government officers responsible with reporting and accountability.
-Is any officer appointed by the paymaster general pursuant to section 8 of the public finance act
officers are normally the permanent secretaries of the respective
ministry of Head of Department who are appointed by the permanent
secretary in writing.
The Accounting Officer will be responsible for the following tasks and activities:
  • execute all accounting transactions and effect the necessary reconciliation of outstanding transactions;
  • recover amounts established as being receivable including the recovery of VAT from the host Member State;
  • prepare
    and present the Institute’s annual accounts and financial statements –
    both provisional and final – in line with the applicable financial
  • ensure that colleagues who need to use financial procedures are aware of them, understand them and correctly apply them;
  • validate the Institute’s accounting systems;
  • file and archive documents connected to the accounting function;
Meaning of the Term Sub-counting Officer
Define the term sub-accounting Officer
Meaning of the Term Collector of Revenue
Describe the term collector of revenue
Collector of revenue: responsible with collecting all revenue received by government
Meaning of the Term Authorized Officer
Explain the term Authorized Officer
Authorized Officer is a member of a government who has been formally
empowered by that entity to conduct government on its behalf, and to
enter into borrowing arrangements with financial institutions.
Meaning of the Term Public Money
Describe the term Public Money
Public money is the money that is generated by the government to provide goods and services to the general public.
Meaning of the Term Exchequer Account
Explain the term Exchequer Account
Government current and capital account receipts and expenditure, tax
and non-tax revenue receipts, departmental expenditure voted annually by
the Dial, the sinking fund (a transfer from current account to capital
account to reduce national debt) and other non-voted expenditure;
current and capital account surpluses or deficits. Exchequer surplus or
deficit, source and application of funds, total borrowings or
repayments, total increase or decrease in exchequer deposits and other
Meaning of Consolidated Fund
Explain the meaning of Consolidated Fund
Fund of Tanzania is the most important of all government accounts.
Revenues received by the government and expenses made by it, excluding
the exceptional items, are part of the Consolidated Fund. <!– [if
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government expenditure is made from this fund, except exceptional items
which are met from the Contingency Fund or the Public Account.
Importantly, no money can be withdrawn from this fund without the
Parliament’s approval.
The Meaning of Treasury
Describe the meaning of Treasury
Treasury : A government department related to finance and taxation.
Its responsibilities;
  • To develop and implement a macroeconomic and fiscal policy frame work for the United republic.
  • Ensure
    full and transparent accounts are from time to time made to the
    national assembly indicating the current and projected state of economy
    and the fiscal policy of the government.
Meaning of Paymaster General
Describe the meaning of Paymaster General
Is thememberof thegovernmentwho isofficiallyresponsiblefor makinggovernmentpayments.
The Meaning of Account Year
Explain the of Account Year
An accounting year is the period of time over which a government gathers and organizes its financial activity.
Controller and Auditor General:
Its responsibilities;
  • To satisfy him that any proposed withdrawal from the consolidated fund is authorized by or provided by act of parliament.
  • Advice
    the government on the total revenues to be allocated to the public
    sector and the appropriate level of resources to be allocated to
    individual programmers within that sector.
Meaning of Special Fund
Describe the meaning of Special fund
term special funds refers to those assets set aside by companies for a
specific purpose, and unavailable for ordinary business operations.
Special funds include cash set aside to meet a specific financial
obligation in the near term, as well as those that might appear in the
long-term investment section of the balance sheet.
will oftentimes set aside funds to ensure cash is available to meet
near-term as well as longer-term financial obligations. When the
obligation is near-term, the company will typically allocate cash to the
fund. If the obligation is long-term in nature, the company may invest
this cash so that income is earned on the asset until needed.
term obligations are typically those associated with normal business
operations. The funds are classified as current assets on the balance
sheet, and funding may consist of a bank account earmarked for a
specific purpose. Examples of these special funds include:
  • Dividend Account:
    established when the company’s board of directors declares the payment
    of dividends to shareholders, the money placed in the account is then
    used to pay the dividends owed.
  • Interest Expense: includes cash placed into an account that will be used to pay the interest due on the company’s long-term debt.
  • Payroll Cash Account:
    typically consists of an imprest account that is replenished prior to
    each pay period, and contains sufficient cash to pay salaries and wages
    due employees.
  • Petty Cash Fund: a small account
    used to pay for miscellaneous expenses such as delivery charges,
    supplies, and other items too small in value to justify issuing a check.
may also set aside funds to pay for longer-term obligations. These
funds may consist of securities that can generate income until needed,
and are often times placed with a trustee that becomes the custodian of
the account. As such, these assets would be classified as long-term
investments on the balance sheet. Examples of these funds include:
  • Contingency Fund: established by companies to pay for unanticipated expenses, emergencies and other financial crises.
  • Plant Expansion Fund: used to pay for the eventual purchase, expansion, or construction of a manufacturing plant or facility.
  • Sinking Fund: established for the purpose of paying holders of long-term debt the principal amount due when the securities mature.
  • Stock Redemption Fund: used to repurchase or retire capital stock from shareholders; these redemptions typically involve preferred stock.

TOPIC 5:  Sources Of Government Funds And Expenditure Estimates

Sources of Government Funds and Expenditure Estimates
Indentify sources of government funds and Expenditure Estimates
revenue refer to the income generated by the government through various
income sources inside and outside the particular government, As to any
other person one will be eager to know where government earn money to
finance its activity as well as expenditure of the government. The
following are the source of revenue of various government including
united republic of Tanzania (URT) :-
  • Taxation,
    Like we have discussed in the previous tutorial that taxation is a
    compulsory levy imposed by the government where by no direct benefit
    citizen will receive from the government, The levy is usually payable by
    citizen at different rate depending on the nature of economic activity
    conducted by an individual or firm the obtained amount is
    the revenue for the government and is used to meet various expenditure
    causing taxation to be the first source of government revenue.
  • FEES,
    These are payment made by users of public services on government cost
    sharing in health and education, That is to say the payment made by user
    of public services i.e health and education is not the actual cost that
    they were required to pay rather than contribution on cost already
    payable government.
  • FINES, Refer to the
    penalties imposed by government against law breaches,i.e any person or
    firm which ha been proved guilt by law must be exposed to specific fine
    as the compensation for the destruction made by a person or firm and the
    collected amount being the revenue for the government
    Refer to non-payable money provided by the government to another
    government with the aim of helping such government either to improve or
    to start a project which are of great the society of such
    government may decide to invest beyond its boundary provided there is a
    proof for sustainable and profitable cash flow, the obtained amount
    after operation being the revenue for particular government.
Other sources are: revenue obtain from borrowing, grants, Divident etc
Distinguish between revenue and capital expenditure estimates
Difference between Revenue and Capital Expenditure Estimates
A capital expenditure
is an amount spent to acquire or improve a long-term asset such as
equipment or buildings. Usually the cost is recorded in an account
classified as Property, Plant and Equipment. The cost (except for the
cost of land) will then be charged to depreciation expense over the
useful life of the asset.
Revenue expenditure
is an amount that is expensed immediately—thereby being matched with
revenues of the current accounting period. Routine repairs are revenue
expenditures because they are charged directly to an account such as
Repairs and Maintenance Expense. Even significant repairs that do not
extend the life of the asset or do not improve the asset (the repairs
merely return the asset back to its previous condition) are revenue
Thus, the differences between these two types of expenditures are as follows:
  • Timing.
    Capital expenditures are charged to expense gradually via depreciation,
    and over a long period of time. Revenue expenditures are charged to
    expense in the current period, or shortly thereafter.
  • Consumption.
    A capital expenditure is assumed to be consumed over the useful life of
    the related fixed asset. Revenue expenditure is assumed to be consumed
    within a very short period of time.
  • Size. A more
    questionable difference is that capital expenditures tend to involve
    larger monetary amounts than revenue expenditures. This is because
    expenditure is only classified as a capital expenditure if it exceeds a
    certain threshold value; if not, it is automatically designated as
    revenue expenditure. However, certain quite large expenditures can still
    be classified as revenue expenditures, as long they are directly
    associated with sale transactions or are period costs.


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