Ministry of Health and Family Welfare

Government of India

E-Training Module on
“Book Keeping and Accounting”

April, 2011

Financial Management Group, NRHM

Learning Objective of the Module

The aim of this training module on "Book Keeping and Accounting" is to help the finance and
accounts staff to develop an understanding of the following:

Importance of “ Book Keeping and Accounting” function

Key Accounting activities and concept of Accounting Centers under NRHM

Books of accounts to be maintained at various levels and their purpose

Key accounting policies and principles to be followed for maintenance of books of accounts
and preparation of financial statements

Important accounting entries to be passed

Key Financial Statements to be prepared

Key Formats to be followed for preparation of books of accounts and financial statements (as
per the prescribed guidelines)

Financial Management Group, NRHM

Table of Contents

Introduction
Importance of "Accounting/ Book Keeping" Function
Accounting Cycle- An Overview

Concept of Accounting Centers under NRHM

Books of Accounts/ Accounting records
 Voucher and Supporting Documents
Books of Accounts to be maintained at various levels
Responsibilities to Maintain Accounting Records
 Certain Important Books of Accounts: Their Objective, Contents and Formats

Key Accounting Policies

Key Accounting Entries

Compilation and Finalization of Accounts
 Account Closing Procedures
 Understanding of Key Financial Statements
 Formats of Financial Statement

Case Studies

Self Assessment Financial Management Group, NRHM
I-TRODUCTIO-

Financial Management Group, NRHM

Accounting/ Book Keeping

Book Keeping is the process of recording financial transactions of a facility and is the first step of
the accounting process.
Accounting is the art of recording, classifying and summarizing in terms of money transactions
and events of financial character.

Importance of Accounting/ Book Keeping

Tool to record all financial transactions/ events

Helpful in organizing and preparing the financial statements, cash flows, budget, financial
plans etc.

Generates the financial information needed to manage and understand the financial position of
the entity

Facilitates easy auditing according to the set standards

Financial Management Group, NRHM

Accounting Cycle- An Overview
Identify the Transaction through an original
source document & determine which
accounts are affected and by how much
Accounting Cycle

Statements
Financial
Preparation of Financial
Statements. The financial Make a Voucher with details
statements like Income & on date, amount, description,
Expenditure, Receipts & Voucher name & particulars of the party
Payments and Balance Sheet are
to be prepared.
Closing of
Books Entry in
Books of Accounts have to be reconciled Make entries in the Books of Accounts /
Books of Records like Cash/Bank Book, Ledger etc.
and closed on a periodical basis. E.g.
Cash Book to be closed daily, Ledger to
Accounts Simultaneously, if applicable, make entries in
be closed Monthly, etc. other memorandum records like Fixed Asset
Register, Advance Register etc.

Accounting cycle is governed by

Accounting Policies and Principles

Financial Management Group, NRHM

 CO-CEPT OF
ACCOU-TI-G CE-TERS

Financial Management Group, NRHM

Accounting Centers under -RHM

Accounting Centers are the offices/ units where accounting in respect of various financial
transactions is supposed to be carried out. They are responsible for maintaining the relevant
books of accounts and other financial/ statutory records.

On the basis of incurring and recording transactions at various levels, the following are the
accounting centers under NRHM:

Accounting Unit Accounting Reporting Consolidation

Center
State Level State Programme



Management Unit
District Level District Programme



Management Unit
Block Level Block Programme



Management Unit
Other Level CHC/ PHC


RKS

Financial Management Group, NRHM

 BOOKS OF ACCOU-TS/
ACCOU-TI-G RECORDS

Financial Management Group, NRHM

Vouchers and Supporting Documents

What is a Voucher?
Voucher is a basic documentary evidence to record a financial transaction in the books of account of
the society/ peripheral unit

Voucher Maintenance and Supporting Documents

All vouchers should be scrutinized thoroughly before making payments

All vouchers should be scrolled (serial numbered) and entered in cash/bank book with
appropriate referencing

All vouchers to be supported with appropriate documentary evidence and necessary approval
from competent authority needs to be taken beforehand

Supporting documents should be cross referenced to link them to each item of expenditure with
budget heads, project components, expenditure categories etc

All supporting documents in originals should be defaced/ stamped as ‘ PAID & CANCELLED’
with details of cheque number and date

Financial Management Group, NRHM

Books of Accounts to be Maintained at Various Levels

Key books of accounts to be maintained at various levels are given below:

Books of Accounts/ Other State / Block CHC/P RKS Sub VHSC

Records District HC Centres
Double Column Cash and




Bank Book
Columnar Petty Cash Book


Bank Register


Ledger




*
Journal Register




Cheque Issue Register



Advance Register




Salary Register

Fixed Asset Register





*ot mandatory but units currently maintaining ledgers may continue maintaining it as a good practice

Financial Management Group, NRHM

Books of Accounts to be Maintained at Various Levels

Books of Accounts State / Block CHC/ RKS Sub VHSC

District PHC Centres
Fund Received Register



Disbursement Register



Bank Pass Book/ Bank







Statement
Bank Reconciliation Statement






Minutes/ Proceedings Register


*
JSY Register**

*For any important meetings held at the units, minutes register should be maintained at all respective units
** In addition to units specifically mentioned above, JSY register also needs to be maintained wherever JSY disbursements are
made

Financial Management Group, NRHM

Responsibility to Maintain Records

Responsibility to maintain Books of Accounts lies with the following officials:

 State Finance Manager/ State Accounts Manager at State Level
 District Accounts Manager at District Level
 Block Accountant at Block Level
 Accountants at CHC/ PHC Level
 ANM at the Sub-Center Level
 ASHA/ AWW at VHSC level

Books of accounts together with supporting documents and project management reports should
be maintained for at least three years after the completion of audit of the entire programme
expenditure

Movement of Records

At SHS, DHS, Block, CHC/PHC and RKS level, no movement of accounting records is
required. Record for all transactions taking place at these units shall be kept at these institutions
only

Sub Centers and VHSCs are required to send their vouchers to their supervisory units along
with the UCs

Financial Management Group, NRHM

CERTAI- IMPORTA-T BOOKS OF ACCOU-TS:
OBJECTIVE, CO-TE-TS & FORMATS

Financial Management Group, NRHM

Cash Book
Purpose
Principal book for recording all cash receipts and payments. The closing balance of cash book
reflects cash in hand/ Bank balance.

Details

For SHS, DHS and Block a “ Double Column Cash Book / Bank Book: is to be maintained,
while at Sub Center and VHSC, a “Columnar petty cash book” is maintained along with a
bank register

Entries are to be made in the cash book on the day payment is received/ disbursed

To be written on daily basis for SHS, DHS, Block, CHC/PHC and RKS and on a weekly basis
for SC and VHSC. Cash book should be closed on same day by checking and authenticating
by one of the cheque signing officer

If no transaction has taken place in a day, the entry “ No Transaction” has to be noted in the
cash book in red ink and balances to be carried forward to the next day

Voucher Serial no. & Ledger Folio no. should be noted in the cash book

Over writing should be avoided and corrections should be attested by authorized officer under
his dated initials

Financial Management Group, NRHM

Format of Double Column Cash / Bank Book (For SHS, DHS, Blocks, CHC/PHC and RKS)

Receipts Payments
Dr. Cr.
Particulars V. L. Amount (Rs.) Particulars V. L. Amount (Rs.)
Date (including party name, S. F. Date (including party name, S. F.
activity head, etc.) -o. -o. Cash Bank activity head, etc.) -o. -o. Cash Bank

V.S.o. - Voucher Serial umber

L.F.o. - Ledger Folio umber

Financial Management Group, NRHM

Format of Petty Cash Book for Sub Center

Payments *

Date S. Particulars Receipts Total Cleaning of Minor Transport of Payment/ Other Daily
-o (Including (A) Expenditure Sub Centre modifications emergencies Reward to Expense Balance
party name, (B) and repair ASHA (C= A-B)
activity head,
etc.)

Monthly Total

S o. - Serial umber

'ote: Cash book should be serially page numbered and authenticated by the supervisor
* Illustrative expense heads have been mentioned here, however, additional heads can be added as per requirement.

Financial Management Group, NRHM

Format of Petty Cash Book for VHSC

Payments*

Date S Particulars Receipts Total Village level Revolving fund -utrition, Education Daily
-o. (Including (A) Expenditure public health for households & Other Balance
party name, (B) activity Sanitation Expenses (A-B)
activity head, (cleanliness
etc.) drive etc )

Monthly Total

S No. - Serial Number

'ote: Cash book should be serially page numbered and authenticated by the supervisor
* Illustrative expense heads have been mentioned here, however, additional heads can be added as per requirement.

Financial Management Group, NRHM

Ledger
Purpose
Ledger is supposed to be maintained under “Double Entry System” of Book-keeping where
transactions are classified and recorded as per different heads of accounts. Each ledger account
provides a summary of all transactions under that account head.

Details

Separate ledger accounts must be prepared for the following activities by the block
 Individual Pools to record grants received from supervisory units (For eg. Grant for RCH
Flexipool A/c)
 To record activity wise advances given to subordinate units
 To record expenditure for each individual activity
 All other advances, in the name of the person / agency to which advance has been disbursed
(For e.g. to employees, outside agencies, etc.)
 Salary ledger heads to record payments to each employee

To be closed on a monthly basis and balances of the same to flow in the monthly FMRs / SoE.
Totals would be done for each ledger head and a trial balance prepared. Discrepancies, if any,
will be rectified and reconciled.

Financial Management Group, NRHM

Format of Ledger Account

-ame of the Ledger Account (-ame of the Expense / Activity and -ame of the Pool):

Date Particular V.S. -o. C. B. S. -o. Amount (Dr.) Amount (Cr.) Balance (Dr. / Cr.)

V. S. o. – Voucher Serial umber

C. B. S. o. – Cash Book Serial umber

Financial Management Group, NRHM

Fixed Asset Register
Purpose
Fixed Asset register is maintained to record various quantitative and financial details relating to
fixed assets and their location/ movement.
Details

Should be kept in two parts- one for assets of permanent nature like furniture and fixes,
computers, machinery and equipment, vehicles etc. and the other for assets of temporary
nature/ consumables like stationary, printing material etc.

All assets received in kind from the supervisory units should also be included in the fixed asset
register.

Should contain full particulars of purchase/ receipt of fixed assets including date of purchase,
its current location/ user, value of purchase etc.

All other assets purchased by the society and subsequently handed over to the periphery units
should be shown transferred to such entities in the register and further tracking of the register
will be required.

Certificate to be obtained from the receiving entity and kept in the asset register with contra
entry in the ‘Location/ Under custody’ column

No depreciation is to be on fixed assets

Financial Management Group, NRHM

Format of Fixed Asset Register

Asset Quantity (-os) Asset Cost (Rs)

V. End of End of
Date Particulars Location Beginning of Deletion/ Beginning Deletion/
S.-o Addition the Addition the
the Year Transfer of the Year Transfer
Year Year

Financial Management Group, NRHM

Advance Register
Purpose
Advance register is maintained to record advances given to implementing units, staff and external
parties/ suppliers, which aids periodical monitoring and follow up

Details

All advances should be entered in the register immediately after the cash is paid/ cheque is
given to the advancee

A proper ageing of the advances should also be maintained on a regular basis and old
outstanding advances should be identified for immediate follow up

For advances more than a year, a detailed record should be prepared indicating their purpose,
amount of advances, date on which advance was given and party to whom advance was given

Financial Management Group, NRHM

Format of Advance Register and Ageing of Advances
Particulars (Activity Adjustment Details
Given to (-ame of Cheque Date as per Balance
Date for which advance Amount Amount
the party / unit) -o. the Cheque Date Advance
given) Adjusted

Format of Ageing of Advances

-ame of the Unit Activity -ame Outstanding Age -o. of Advances Amount
Outstanding (Rs.)
Less than 6 months
RCH Between six months
to one year
More than one
Unit 1 year**
Total Rs…………
NRHM --DO--
-- ---
Unit 2

** Details of advances outstanding for more than a year

S. -o Date Amount of Advance given -ame of the Party Purpose of the advance
(Rs.)

Financial Management Group, NRHM

Bank Reconciliation Statement
Purpose
Bank Reconciliation Statement (BRS) is prepared to reconcile balance as per books (Bank Book)
and the bank balance as per the bank statements (Pass Book) as on particular date. It explains the
differences between the two and aids in accounting for/ follow up of the outstanding entries.

Details

Bank Reconciliation Statement is prepared to reconcile the balance of cash at bank in a
society’s records with the bank statement on a particular date

It helps in detecting, if there is any error in recording the transactions and ascertaining the
correct bank balance on a particular date

It should be prepared on a monthly basis (by the 10th of the following month)

Separate BRS should be prepared for each bank account

BRS should be reviewed and signed by the supervisory officer of the unit

Outstanding entries should be followed up

Financial Management Group, NRHM

Format of Bank Reconciliation Statement

Bank Reconciliation Statement for the month of ____________

-ame of the Unit:

Balance as per Cash Book (as on date ......................)

Add:
(i) Cheques issued but not encashed
(ii) Credit entries made in the bank pass book but not shown in the
cash book
Total

Less:
(i) Amount sent to Bank but not credited in the Saving Bank Account of the unit
(ii) Bank charges debited in the bank account but not accounted for in the cash book

Total
Balance as per Pass Book
Prepared by :
Examined by :
Date : ___________

Financial Management Group, NRHM

Journal Register

Journal register is maintained to record all journal/ adjustment entries

Journal register should be closed on a monthly basis

Format of Journal Register

Date Particulars Ledger Folio -o. Debit (Rs.) Credit (Rs.)

Total

Financial Management Group, NRHM

KEY ACCOU-TI-G POLICIES

Financial Management Group, NRHM

Key Accounting Policies

‘Accounting policies’ refer to the specific policies and procedures used by the entity to prepare its
financial statements. These include any methods, and procedures defined for financial accounting
and presenting disclosures.

Some of the key Accounting Policies adopted under NRHM to bring in uniformity and consistency
in the method of accounting for programme funds across various units are enumerated below:

 Cash Basis Accounting: Transaction be accounted for at the time of receipt or payment only.

 Double Entry Book Keeping: The books of accounts shall be maintained on double entry book
keeping principles i.e. there should be a corresponding Debit/ Credit for each and every
transaction

 Accounting Period: It is the period with reference to which accounting books of any entity are
prepared & balanced and the financial statements are prepared. Under NRHM, units are
supposed to follow the Financial year (i.e. 1st April to 31st March) as the Accounting period.

Financial Management Group, NRHM

Disclosure of Accounting Policies and -otes to Accounts

 Basis of preparation of Financial Reports and significant accounting policies related to

material items shall be disclosed

 Any changes from earlier policy may be disclosed along with the impact of such a change on
financial indicators

 Notes should provide additional information, not readily discernible from the Financial
Reports but which is necessary for a fair presentation of the entity’s financial performance
and position

 Notes to the Financial Reports should be presented in a systematic manner- Each item in the
statements should be cross-referenced to any related information in the notes

Financial Management Group, NRHM

TREATME-T OF CERTAI- ITEMS

Financial Management Group, NRHM

Grant- in- Aids from Centre/ State

Amount of grant received by SHS/ DHS will be taken into Income/ Revenue of a particular
year to the extent of expenditure incurred only against the particular grant.

To be taken into account on actual receipt of money

Funds sanctioned and transferred but not actually received to be entered on income side of
Income & Expenditure A/c and on the assets side of Balance sheet

To be taken on receipt side of the Receipt & Payment A/c and on income side in the Income &
Expenditure A/c

Reflected as income in Income & Expenditure A/c to the extent of fund utilization against it

Shown as liability in the Balance Sheet to the extent of remain unitized at the end of financial
year

Financial Management Group, NRHM

Recognition of Expenditure

Releases made to Public Health Institutions shall not be treated as expenditure unless they are
reported back as expenditure either by voucher or SoE

Releases made to NGOs, Corporations etc. will be treated as advance till they are reported back
as expenditure duly backed by supporting documents.

The deposit or advance for Civil Works will be booked as expenditure on the basis of
progressive report of work of completion to the extent certified by the PWD

Commodity Grants received from the Govt. of India should appear in the Notes on Accounts
and Disclosure of the Audit Report.

In case of Untied Fund released to SC and VHSCs only funds reported by them as ‘actually
spent’ under SoE shall be booked as expenditure.All other releases are also to be treated as
advance unless reported back as expenditure supported by vouchers, SoE or necessary
documents

Financial Management Group, NRHM

Treatment of Fixed Assets

Fixed assets should be stated at cost of acquisition & subsequent improvements including taxes,
duties, freight & other incidental expenses

Stock Register to be maintained for the articles or item of permanent or non-consumable nature
e.g. furniture, fixtures, equipments, machinery, computer system etc.

Facility where fixed assets exist should maintain a Fixed Assets Register but, the facility which
receives the asset and then transfer it to various peripheral institutions should maintain a log or
distribution register

Articles that are procured, used and installed in the Office of the Society and are capitalized in
the balance sheet are to be treated as assets of the society

Assets purchased by the society and subsequently handed over such as Buildings, Mobile
Medical Units, Ambulances, Equipments for Hospitals etc. are to be capitalized in the books of
SHS or DHS and to be booked as an expense

No depreciation will be charged on fixed assets as the project is a cost incurring project and
there is no revenue against which depreciation can be set off

Financial Management Group, NRHM

Treatment of Interest Earned

Statement of interest earned should be furnished on six-monthly basis by the 10th of the next
month

Interest earned under various programmes should be shown separately

Interest earned will be treated as receipt and should be shown as income in the Income &
Expenditure Statement separately

Interest earned will be included as additional funds available and will be factored in while
approving the State Programme Implementation Plan for next year

Interest earned should be treated as Grant-in-Aids and to be utilized for the same purpose for
which the State PIP or District PIP is approved.

Financial Management Group, NRHM

KEY ACCOU-TI-G E-TRIES

Financial Management Group, NRHM

Important Accounting Entries

Grant- in – Aids from Center/ State

The following entry is to be passed at the time of receipt of funds;

Bank A/c Dr
To Grant – in – Aid
For unspent grants returned;

Grant – in – Aid Dr
To Bank A/c

Recognition of Expenditure

The following entry is to be passed at the time of recording expenditure incurred;

Expenditure Head A/c Dr

To Bank/Cash A/c

Financial Management Group, NRHM

Important Accounting Entries

Advances

The following entry is to be passed at the time of disbursing the money as advance;

Advance A/c (Name of the advance) Dr

To Bank A/c

For reversal of advances to the extent of expenditure reported;

Expenditure Head A/c Dr

To Advance (Name of the advance)

Financial Management Group, NRHM

Important Accounting Entries
Funds Transferred to Implementing Units

For recording disbursement to implementing units

Implementing units – Advance A/c Dr

To Bank A/c

For recognition of expenditure on receipt of SoE/ UC from implementing units

Expenditure Head A/c Dr

To Implementing unit- Advance A/c

Fixed Assets

For recording purchase of assets out of internally generated funds;

Fixed Asset Dr
To Bank A/c

Financial Management Group, NRHM

Important Accounting Entries – Accounts Closing & Consolidation

Recognition of Income

For Recognition of Income to the Extent of Expenditure Incurred;

Grant – In – Aid for Dr

To Income A/c

Funds in Transit

Following entry is to be passed in case the funds are sanctioned but not actually received;
Funds in Transit A/c Dr
To Grant – in – Aid

On actual receipt of funds;

Bank A/c Dr
To Funds in Transit A/c

Financial Management Group, NRHM

Important Accounting Entries – Accounts Closing & Consolidation
Income & Expenditure A/c

For transferring of interest to Income & Expenditure Account;

Interest Earned on Bank A/c Dr

To Income & Expenditure A/c

For transferring of Income to Income & Expenditure Account;

Income Head A/c Dr

To Income & Expenditure A/c

For transferring of Expenditure to Income & Expenditure Account;

Income & Expenditure A/c Dr

To Expenditure Head A/c

Financial Management Group, NRHM

Important Accounting Entries – Accounts Closing & Consolidation
Consolidation

For consolidating the Cash & Bank Balance of implementing units;

Cash / Bank A/c Dr

To Advance to implementing units for ( Name of Activity for which fund
was disbursed)

('ote: This entry should be reversed immediately in the next accounting year)

For Transferring the Excess of Income over Expenditure to Reserves and Surplus at the end
of the period;

Income & Expenditure A/c Dr

To Reserves and Surplus A/c

Financial Management Group, NRHM

COMPILATIO- A-D FI-ALIZATIO-
OF ACCOU-TS

Financial Management Group, NRHM

Account Closing Procedures

Closure of the accounting books is an important and necessary function for maintaining the
integrity of accounting data

Before the accounting books are closed for the period, a thorough review of all financial
information should be preferred

Some of the key steps for closure of books of accounts include:
To ensure that,
 No expenditure for the period is pending to be booked
 No pending entries are left to be passed in the Books of Accounts
 All closing period/ consolidation entries have been passed in books of accounts (as illustrated
in the previous section on “Key Accounting Entries”)
 All individual Bank and Advance accounts have been reconciled
 All material balances of advances given to staff and other parties have been duly confirmed

After closure of books of accounts, financial statements including Trial Balance, Income &
Expenditure, Receipts & Payments and Balance Sheet can be prepared

Financial Management Group, NRHM

Financial Statements
Financial Statements of a Society basically comprise of:

Financial Statement Objective

1 Receipt and Payment account Statement of cash and bank transactions for a period.
It also provides opening and closing balances of cash
and bank
Income and expenditure Describes how society has performed over a period.
account It records all the revenue expenditure and income
2
items of the current accounting period.

Balance Sheet Tells about the long term health and strength of the
society as at a particular date.
3
It provides an overview of the assets, liabilities and
capital of the entity.

Financial Management Group, NRHM

Financial Statements contd..
Relevant financial statements and respective timelines for the accounting centers are as
follows:

Accounting Center/ Trial Income & Receipts and Balance Sheet

Financial Balance Expenditure Payments
Statements
SHS




Timeline Monthly Quarterly
DHS




Timeline Monthly Quarterly
Block




Timeline Monthly Only if mandated by the states (at the frequency as
prescribed by the state)
RKS




Timeline As per the mandate of the Samiti
CHC/PHC    

Financial Management Group, NRHM

Difference between “Receipts and Payment A/c” and “Income and Expenditure A/c”

Receipts and Payment A/c Income and Expenditure A/c

 Another name for Cash/ Bank Book.  Another name for Profit and Loss Account.
 Records receipts and payments actually  Records income and expenditure earned or
received or paid during the year expensed in the current accounting period
 It records all receipts and payments  It records only the revenue items. For
irrespective of the distinction between instance, purchase of building will not be
capital and revenue items. recorded in this account but depreciation
 Closing Balance reflects the balance in will be shown here.
bank or cash in hand.  Closing balance reflects the surplus or
deficit for the period.

Financial Management Group, NRHM

Illustrative- State Health Society’s Financial Accounts
An overview of items which generally appear under Income, Expenses, Assets and Liabilities of SHS is
given below:
Income Expenses
 Grant received  Expenditure at Headquarter
 Interest earned  Expenditure at Implementing
 Other Income (sale of Surplus/ units
Bidding Documents, user Deficit  Bank Charges
charges etc.)  Expenditure out of Interest
Fund

Assets Liabilities
 Fixed Assets  Reserve & Surplus
 Advances (under  Current Liabilities
respective programmes)
Financial
 Cash in Hand
Position
 Bank Balance
 Other Current Assets
 Grant in Transit

Financial Management Group, NRHM

Format of Receipt and Payment Account
STATE HEALTH SOCIETY
Receipts & Payments Account for the Year Ended 31-03-20
Amount in Rupees
RECEIPTS
Opening Balance

Amount of Advances
Grant-in-aid received during the Misc. Receipts refunded/adjusted
year (including cheque received or State (includes refund of against exp.during
Sl. -o. -ame of the district Cash Bank Sub-Total to be received from GOI) Other Grants Contribution EMD/SD) the year Interest Grand Total
1 2 3 4 5 6 7 8 9 10 11

State Level:

District
Level:
1 District A
2 District B
3 District C
4 District D

Grand Total
PAYME-TS
Closing Balance

Funds
utilized/expenses Cheques/Draft
during the year in Hand
(other than fixed
assets) as shown
in the Income & Purchase of Advances given Grant Refunded
Sl. -o. -ame of the district Expenditue a/c fixed assets during the year Refund of EMD/SD to GOI : Cash Bank Total
1 2 3 4 5 6 7 8 9 10 11

State Level:

District
Level:
1 District A
2 District B
3 District C
4 District D
Grand Total

Financial Management Group, NRHM

Format of Income and Expenditure Account

STATE HEALTH SOCIETY

Income & Expenditure For The Year Ending 31-03-20XX

Amount in Rupees
Previous Yr. Current Current
Sch. Previous Yr. At Sch.
At Expenditure Yr. At Income Yr. At
Ref. 31-03-XX Ref.
31-03-XX 31-03-XX 31-03-XX

RCH-I I-A Figure C of Sch. Grant Received

RCH Flexipool I-B Figure C of Sch.
NRHM Additionalites I-C Figure C of Sch. RCH-I I-A Figure C of Sch.
RI Strengthening Project I-D Figure C of Sch. RCH Flexipool I-B Figure C of Sch.
Pulse Polio (PPI) I-D Figure C of Sch. NRHM Additionalites I-C Figure C of Sch.
EC SIP I-E Figure C of Sch. RI Strengthening Project I-D Figure C of Sch.
TB Programme I-F Figure C of Sch. Pulse Polio (PPI) I-D Figure C of Sch.
Malaria I-G Figure C of Sch. EC SIP I-E Figure C of Sch.
Iodine Deficiency I-H Figure C of Sch. TB Programme I-F Figure C of Sch.
Blindness Control I-I Figure C of Sch. Malaria I-G Figure C of Sch.
IDSP I-J Figure C of Sch. Iodine Deficiency I-H Figure C of Sch.
Leprosy I-K Figure C of Sch. Blindness Control I-I Figure C of Sch.
I-L… Figure C of Sch. IDSP I-J Figure C of Sch.
Others (Please specify) Leprosy I-K Figure C of Sch.
Others (Please specify) I-L… Figure C of Sch.

Interest Earned VIII Figure B of Sch.

Income Over Expenditure (Surplus)
Expenditure Over Income (Deficit)

0 Total 0 0 Total 0
0

Place :
Date :
Chartered Accountants State Finance Officer Mission Director

Financial Management Group, NRHM

Format of Balance Sheet
Current Current
Previous Yr. At Sch. Previous Yr. At Sch.
Liabilities Yr. At Assets Yr. At
31-03-XX Ref. 31-03-XX Ref.
31-03-XX 31-03-XX
Reserve & Surplus
Opening Balance (Surplus) Figure A of Sch. IX Figure A of Sch. Fixed Assets II-A Figure D of Sch.

Add/Less :Surplus/Deficit for the year Figure B of Sch. IX Total

Loan & Advances

Figure A of Sch. Advances-RCH-I IV-A Figure E of Sch.
Unspent Grant Figure A of Sch. Advances-RCH Flexipool IV-B Figure E of Sch.

Figure A of Sch. RCH-I Figure E of Sch. I-A Figure A of Sch. Advances-RI Strengthening IV-B Figure E of Sch.
Figure A of Sch. RCH Flexipool Figure E of Sch. I-B Figure A of Sch. Advances-PPI IV-B Figure E of Sch.
Figure A of Sch. NRHM Additionalites Figure E of Sch. I-C Figure A of Sch. Advances-NRHM Additionalites IV-C Figure E of Sch.
Figure A of Sch. RI Strengthening Project Figure E of Sch. I-D Figure A of Sch. Advances-EC SIP IV-D Figure E of Sch.
Figure A of Sch. Pulse Polio (PPI) Figure E of Sch. I-D Figure A of Sch. Advances-TB Progamme IV-D Figure E of Sch.
Figure A of Sch. EC SIP Figure E of Sch. I-E Figure A of Sch. Advances-Malaria IV-D Figure E of Sch.

Figure A of Sch. TB Programme (As per CTB Division) Figure E of Sch. I-F Figure A of Sch. Advances-Iodine Deficiency IV-D Figure E of Sch.
Figure A of Sch. Malaria Figure E of Sch. I-G Figure A of Sch. Advances-Blindness IV-E Figure E of Sch.
Figure A of Sch. Iodine Deficiency Figure E of Sch. I-H Figure A of Sch. Advances-IDSP IV-E Figure E of Sch.
Figure A of Sch. Blindness Control Figure E of Sch. I-I Figure A of Sch. Advances-Leprosy IV-E Figure E of Sch.
Figure A of Sch. IDSP Figure E of Sch. I-J Figure A of Sch. Advances-Staff IV-F Figure E of Sch.
Figure A of Sch. Leprosy Figure E of Sch. I-K Figure A of Sch. Advances-Others (Please specify) IV-G.. Figure E of Sch.
Figure A of Sch. Others (Please specify) Figure E of Sch. I-L… Total
Figure A of Sch. OTHER CURRE-T ASSETS V Figure D of Sch.

Figure A of Sch. Fixed Assets Reserves Fund A/C II Figure D of Sch.

Closing Balances :
Figure A of Sch. Current Liabilities III Figure D of Sch. Figure A of Sch. Cash in Hand VI Figure C of Sch.
Figure B of Sch. Bank Balance VI Figure D of Sch.
Cheques/Draft in Hand VII Figure A of Sch.
0 Total 0 0 Total 0
Place :
Date :

State
Finance
Chartered Accountants Officer Mission Director

Financial Management Group, NRHM

CASE STUDIES

Financial Management Group, NRHM

Case Study: Accounting Entries
Some of the sample financial transactions in context of RHM units are given below. You are
required to frame appropriate accounting entries in order to post them into books of accounts.
i. A block has received grant- in- aid of Rs. 50,000 for RCH activities from the DHS. What entry needs
to be passed in the books of the block ?
ii. If the block accountant has disbursed Rs. 20,000 as advance for JSY activities to CHC/PHC, what
entry will be passed in the books of the block?
iii. A computer worth Rs. 35,000 has been purchased from the DHS’s office directly. What entry will be
recorded in the books of the district?
iv. The Sub-centre accountant submits SoEs for JSY activities amounting to Rs. 15,000 out of the
advance received by them for Rs. 20,000 to the block. What will be the entries passed in the books of
the block?
v. CHC/PHC returned unspent grant of Rs. 3,000 received against a particular activity to the
supervising block. What will be the entry in the books of CHC/PHC?
vi. RKS has generated Rs. 5,000 as cash income through Registration Fees from Patients. How will the
RKS accountant record such income in its books of account?
vii. DHS has earned Interest of Rs. 2,000 on bank account. What entry will be passed at the time of
interest being credited to bank account?
viii.An amount of Rs. 150,000/- has been sanctioned by the District Health Society towards expenses of
the Block. However, the funds have not been received by the block, then what entry will be passed in
the books of the Block to record funds-in-transit. Also, when the Block actually receives the funds,
what will be the corresponding entry?

Financial Management Group, NRHM

Answers
1. Bank A/c Dr 50,000

To Grant – in – Aid for RCH 50,000

2. Advance to CHC/PHC for JSY Dr 20,000

To Bank A/c 20,000

3. Computer A/c Dr 35,000

To Bank A/c 35,000

4. JSY Disbursements A/c Dr 15,000

To Advance to Sub-centre for JSY A/c 15,000

5. Grant – in – Aid Dr 3,000

To Bank A/c 3,000

6. Cash A/c Dr 5,000

To Other Income (Registration fees) A/c 5,000

7. Bank A/c Dr 2,000

To, Interest Earned on Bank A/c 2,000

8. The following entry will be passed to record funds-in-transit;

Funds in Transit A/c Dr 1,50,000

To Grant – in – Aid 1,50,000

On actual receipt of funds; the entry will be;

Bank A/c Dr 1,50,000

To Funds in Transit A/c 1,50,000

Financial Management Group, NRHM

Case Study 2 : Preparation of Bank Reconciliation Statement
Prepare a Bank Reconciliation Statement as on 31st March 2010 for the Bank Account
maintained at DHS considering the following bank transactions:
 On 31st March, 2010 the bank statement of the District Health Society showed a credit balance
of Rs. 10,500.
 Cheque no. 017653 and 598320 received from RKS & JSY amounting to Rs. 2,000 & Rs. 750
respectively were deposited into the bank but cheque received from JSY had not been cleared
up till 31st March, 2010.
 Cheque no. 225436 for Rs. 1,600 paid in on the 31st March, 2010 was not credited until the 1st
April, 2010.
 Cheques drawn amounting to Rs. 3,500 were issued to RKS & JSY, but cheque no. 508034 for
Rs. 1,200 for JSY had not been presented for payment in the bank up to 31st March.
 Bank had given the debit of Rs. 35 for bank charges.
 There was credit of Rs 800 appearing as received from an implementing unit in respect of
unspent grant.
 Interest of Rs. 130 was credited by the bank on 31st March, 2010.
 Closing balance on 31st March , 2010 as per the Bank Book was Rs10, 755.

Financial Management Group, NRHM

Answer
Bank Reconciliation Statement as on 31st March, 2010

Balance as per Bank Statement - Cr. 10,500

Add: Cheques deposited but not credited – Cheque no. 598320 750
- Cheque no. 225436 1,600
12,850

Less: Cheques issued but not presented 1,200

11,650

Add: Bank charges made by the bank 35

11,685

Less: omission in Bank Book

800
– Amount directly deposited by implementing units into bank
- Interest credited by Bank 130
Balance as per Bank Book 10,755

'ote:

1. Charges made by the bank Rs. 35 have not been recorded in the Bank Book therefore,
the balance in Bank Book is more. Add to bank statement balance also.
2. Interest and amount from implementing unit received by the bank have not been
recorded in the Bank Book. Therefore, in the Bank Book there is no entry of Rs. 800
& Rs. 130. Deduct from the bank statement balance to adjust it according to Bank
Book balance.

Financial Management Group, NRHM

SELF ASSESSME-T

Financial Management Group, NRHM

Self Assessment
Please tick mark (
) the correct answers. A question can have more than one correct answer.

1. Which of the following is not a step in the accounting cycle?

a. Identify the Transaction through an original source document
b.Make entries in the Books of Accounts
c. Preparation of Income & Expenditure, Receipts & Payments and Balance Sheet
d.None of the above

2. What are Accounting Centres?

a. Responsible for maintaining books of accounts and other financial/ statutory records
b.Offices where accounting in respect of various financial transactions is supposed to be
carried out.
c. Both a & b
d.Only b

3. Which of the following books are not to be maintained at CHC/PHC Levels?

a. Double Columnar Cash and Bank Book
b.Ledger
c. Journal
d.Bank Register

Financial Management Group, NRHM

Self Assessment
4. Which of the following books are to be maintained at State/District Levels? (more than one
option can be marked)
a. Advance Register
b.Fixed Asset Register
c. Bank Register
d.JSY Register

5. What is a Voucher?
a. Document in which all transactions are classified under different heads of accounts.
b.Principal record of all money transactions which take place every day
c. Documentary evidence to record a financial transaction in the books of account of the
society/ peripheral unit
d.Document used to record adjustment entries other than cash/ bank transactions

6. Which of the following points have to be kept in mind while maintaining a Cash Book?
(more than one option can be marked)
a. Entries to be made on the day payment is received/ disbursed.
b.If no transactions have taken place in a day then no entry has to be passed in the cash
book.
c. Voucher’s Ledger Folio no. should be noted in the cash book.
d.All of the above.
Financial Management Group, NRHM
Self Assessment

7. Which of the following statements is incorrect?

a. Depreciation is to be charged on fixed assets.
b.A proper ageing of the advances should also be done on a regular basis
c. Bank Reconciliation helps to reconcile the balances of Cash Book and Bank Book on
monthly basis.
d.None of the above

8. Which of the following are the accounting principles of the RKS?

a. Cash Basis Accounting
b.Double Entry Book Keeping
c. Accounting Period
d.All of the above

9. Which of the following statements is true?

a. Receipts & Payments A/c is another name for Profit & Loss A/c
b.Receipts & Payments A/c is another name for Cash/Bank Book
c. Receipts & Payments A/c is another name for Income & Expenditure A/c
d.None of the above

Financial Management Group, NRHM

Self Assessment

10. Which of the statements are true with respect to Income & Expenditure A/c?
a. Records income and expenditure earned or expensed in the current accounting period
b.Closing balance reflects the closing balance of Cash/ Bank
c. Only a
d.Both a & b

Answers: 1 (d), 2 (c), 3 (d), 4 (a,b), 5 (c), 6 (a,c), 7 (a), 8 (d), 9 (b), 10 (c)

Financial Management Group, NRHM

THAK YOU

Financial Management Group, NRHM