Chapter 1
Chapter 2
Chapter 3
Chapter 4
Chapter 5
Chapter 6
Chapter 7
Chapter 8
Chapter 9
Chapter 1

General 1.1
Concepts of Government Accounts 1.2
Divisions of Government Accounts 1.3


1.1 This Manual examines

and explains certain important 'Suspense' transactions that arise in government accounts. Items of receipts and payments which cannot at once be taken to a final head of receipt or expenditure owing to lack of information as to the nature or for any other reasons are to be booked temporarily under the Major Head 8658-Suspense Accounts under L-suspense and Miscellaneous of the List of Major and Minor Heads of Account. The Suspense Heads are to be cleared by (-) Debit or (-) Credit as the case may be on receipt of' the relevant details/information.

(a)Government Account is kept on cash basis. Most transactions take place by cheques drawn on accredited Public Sector Banks which also receive money on behalf of the Government. Reserve Bank of India is the main banker of the Government and other authorised Banks function as its agents while handling Government transactions. Transactions through Banks have their final impact on Government 'Cash Balance' in course of time. Prior to that certain intermediary/adjusting heads are operated and the bookings thereunder are to be finally adjusted at the earliest to reflect Government's receipts and expenditure accurately.

(b)The terms 'debit' and 'credit' are inevitably used in all accounts. They connote 'expenditure' and 'receipt' of cash.

  1. 8670 Cheques and Bills 
  2. 8658 Suspense Accounts -108 PSB Suspense
  3. 8675 Deposits with Reserve Bank - 101 Central-Civil

While the head 'Cheques and Bills' accounts for the amount of cheques drawn, the heads 'PSB Suspense' and 'Deposits with Reserve Bank' reflect transactions taking place at the Banks. Thus, these do not represent income/expenditure of Government and hence credits and debits under these heads do not connote the usual meaning that these terms carry. Credits and debits under these heads conform rather to the principles of double entry book keeping. The head 'Cheques and Bills' is credited by the amount of cheques drawn and corresponding debit is given to the head to which the expenditure relates; the difference, if any, is credited to the appropriate receipt heads like GPF, Income Tax etc. Heads 'PSB Suspense' and 'Deposits with Reserve Bank' have their mirror image in Bank books. A debit to 'PSB Suspense' in Government books represents amount owed by PSBs to Government, whereas a debit under 'Deposits with Reserve Bank' represents amounts owed by RBI to Government. Conversely, credits under these heads would represent amounts owed by Government to PSBs/RBI, as the case may be. Detailed explanation of transactions under these heads will be found in the chapter dealing with these heads separately. Briefly, the amount of Government receipts in a Public Sector Bank (PSB) when reported to Government through a receipt scroll alongwith relevant challans is debited to 'PSB Suspense'. Conversely, the amounts paid by a PSB against cheques drawn by a Pay and Accounts Officer or a Departmental Officer, when reported through a payment scroll alongwith paid cheques, will be credited to 'PSB Suspense'.

(d)The head 'Cheques and Bills' as well as 'Suspense' and 'Remittance' heads are intermediary accounting devices for initial record of transactions which are to be cleared/withdrawn in due course. Thus, credits under 'Cheques and Bills' are cleared in the Pay and Accounts Office on receipt of payment scrolls with paid cheques from the Banks. Debits and credits under 'PSB Suspense' are cleared by cash settlement between the PSB and the RBI by debit or credit as the case may be, to the head 8675 Deposits with Reserve Bank-101 Central-Civil.  Such a clearance is effected in the accounts by booking minus entries. Thus, while original entries are positive (credit or debit) clearing entries are negative i.e. minus credit or minus debit. This is a special feature of government accounts. This expedient of minus transactions, enables a linkage between original entries and clearing entries and keeps the balance amounts smaller than would have been the case otherwise.

1.3 Parts and Divisions of Government Accounts

Government accounts are kept in the following three parts:-


All revenues received by Government by way of taxation like income-tax, central excise, custom, land revenue (tax revenues) and other receipts flowing to Government in connection with the conduct duct of Government business like receipts from Railways, Posts, Transport etc. (non-tax revenues) are credited into the Consolidated Fund. Similarly, all loans raised by Government by issue of Public notifications, treasury bills (internal debt) and loans obtained from foreign governments and international monetary institutions (external debt) and all moneys received by Government in repayment of loans and interest thereon are also credited into this Fund. All expenditure incurred by the Government for the conduct of its business including repayment of internal and external debt and release of loans to States/Union Territory Governments for various purposes is debited against this Fund.


This is in the nature of an imprest and is kept at the disposal of the President of India to enable the Government to meet unforeseen expenditure pending its authorisation by the Parliament. The money is to be used to provide immediate relief to victims of natural calamities and also to implement any new policy decision taker, by the Government pending its approval by the Parliament. In all such cases, after the Parliament meets, a Bill is presented indicating the total expenditure to be incurred on the scheme/project during the current financial year. After the Parliament votes the bill, the money already spent out of the Contingency Fund is recouped by debiting the expenditure to the concerned functional Major Head etc. in the Consolidated Fund of India.


All Public Money received by Government other than those which are for credit to the Consolidated Fund of India are accounted for under Public Account. The receipts into the Public Account and disbursements out of it are not subject to vote by the Parliament. Receipts under this account mainly flow from the sale of Savings Certificates, contributions into General Provident Fund and Public Provident Fund, Security Deposits and Earnest Money Deposits received by the Government. In respect of such receipts, the Government is acting as a Banker or Trustee and refunds the money after completion of the contract/event. The Public Account also includes various suspense and remittance heads.

(a) A Revenue Section with the two sub-divisions to account for Revenue Receipts (Tax and Non-Tax) and Revenue Expenditure. (Major Head Codes 0020 to 1606 and 2011 to 3606)

(i) Capital Receipts. (Major Head Code 4000)

(ii) Capital Expenditure. (Major Head Codes 4046 to 5475)

(c) Public Debt and Loans and Advances etc. (Major Head Codes 6001 to 7999).

Contingency Fond being an imprest is accounted for under a single Major Head. (Major Head Code 8000)

(i) Small Savings, Provident Funds etc. (Major Head Codes 8001 to 8013)

(ii) Reserve Funds. (Major Head Codes 8115 to 8235)

(iii) Deposits and Advances. (Major Head Codes 8336 to 8554)

(iv) Suspense and Miscellaneous. (Major Head Codes 8656 to 8680)

(v) Remittances. (Major Head Codes 8781 to 8797)

(vi) Cash Balance. (Major Head Code 8999).

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Last Updated : 22 Mar,2014