Accounts Code Chapter 4 Quiz

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Questions and Answers

What is the usual procedure for a department charging another department for supplies made?

Charges are made only for bulk orders.

Each department must charge for all supplies. (correct)

Supplies are provided without any charge.

Casual supplies may be given without charge if consent is given. (correct)

Under what circumstances can inter-departmental adjustments be permitted?

When it fosters economy or departmental expenditure control. (correct)

Only for special projects requiring additional funding.

Only if all departments agree unanimously.

If the request is made by the department head.

What should be included in payments made from one department to another if deemed necessary?

Supervision and other indirect expenditure as applicable. (correct)

Only the cost of goods supplied.

Direct costs only.

Administrative costs incurred by the supplying department.

How are payments between government departments typically settled?

By book transfer, unless otherwise necessary. Signup and view all the answers

Who has the authority to resolve disputes regarding the interpretation of the directions in the chapter?

The Comptroller and Auditor General with presidential approval. Signup and view all the answers

What is the main purpose of maintaining Commercial Departments or Undertakings?

To render services or provide supplies on payment Signup and view all the answers

Which of the following describes the financial operation of Commercial Departments?

They work to a financial result based on commercial principles Signup and view all the answers

Which exception allows the Forest Department to charge other departments?

For vegetable, animal, or mineral products extracted from a forest area Signup and view all the answers

What is stated about convict labor in relation to charges made by service departments?

No charge is made for convict labor in Jail Works Signup and view all the answers

Which commercial activity is explicitly mentioned for charging other departments?

Production of films by the Films Division Signup and view all the answers

What governs whether a department's activities are classified as Commercial?

Government discretion and direction Signup and view all the answers

What is the relationship between Commercial Departments and financial records?

They are required to maintain comprehensive records Signup and view all the answers

How does a Commercial Department handle charges for supplies and services?

They handle charges case by case Signup and view all the answers

Which project related cost is specifically mentioned to be charged during its construction?

Costs for additional Police Guards Signup and view all the answers

What primarily differentiates Commercial Departments from Service Departments?

Commercial Departments operate on a cost-recovery basis Signup and view all the answers

What is the monetary limit prescribed for the agent department to avoid raising a debit against the principal department?

Rs. 1000 Signup and view all the answers

Under what circumstances will the Defence services charge and be charged for inter-departmental transactions?

In respect of services rendered and supplies made unless otherwise decided Signup and view all the answers

Which type of buildings are Defence services not required to pay rent for?

Non-residential buildings of Central Civil Departments Signup and view all the answers

What kind of services can a branch of a service department levy charges for?

Particular services on payment as constituted Signup and view all the answers

How does the Defence services handle payments for the use of civil aerodromes?

They are not required to pay for the use of civil aerodromes Signup and view all the answers

What will happen if the Government decides that inter-departmental adjustments are undesirable?

No charges will be made between departments Signup and view all the answers

Which of the following departments is mentioned as not requiring rent payment by the Defence services?

Central Civil Departments Signup and view all the answers

In the context of subsidized services, what type of branch may charge another department?

A branch performing supplementary duties Signup and view all the answers

For which of the following is the Defence services also not required to pay?

Incidental services from Civil Aviation Department Signup and view all the answers

Which statement is true regarding charges for workshops of a department?

They may charge another department for similar services Signup and view all the answers

What is the primary purpose of charging for services or supplies between departments?

To maintain proper accountability and financial control Signup and view all the answers

Which of the following does NOT constitute a service rendered between departments?

Rent charged for residential accommodation Signup and view all the answers

What can be debited to the principal department when it makes payment as an agent?

Expenditure within a monetary limit set by government Signup and view all the answers

How is land acquired by a Civil department for Public Works accounted for?

Debited as part of the costs for Public Works Signup and view all the answers

What happens when land is taken up for multiple Service departments?

Cost is debited to the department with the largest expenditure Signup and view all the answers

What type of expenses related to land acquisition cannot be debited to the department acquiring the land if a Civil officer is involved?

Regular charges incurred in the acquisition Signup and view all the answers

Which of the following is true regarding the financial dealings of service departments?

Service rendered in normal functions is typically not charged Signup and view all the answers

What category of expenses is directly debited to the department for which land is acquired when employing a special officer?

Expenditure on pay, allowances, and contingencies Signup and view all the answers

What is the status of rent charged for residential accommodation provided by one department to employees of another?

Not classified as a service rendered Signup and view all the answers

When an agent department incurs costs on behalf of a principal department, what financial condition applies?

A monetary limit may be fixed by the government Signup and view all the answers

What must always occur in transactions between two Governments?

Adjustments may be agreed upon mutually. Signup and view all the answers

What is generally required when a Government department provides services to a non-Government body?

Payment must be made unless stipulated otherwise. Signup and view all the answers

Which type of departments is classified as a Service Department?

Departments responsible for educational services. Signup and view all the answers

How are Service Departments characterized according to their functions?

Functions are inseparable from the Government's core responsibilities. Signup and view all the answers

What should be the typical means of providing relief from payment for services to outside entities?

Grants-in-aid rather than remission of dues. Signup and view all the answers

What are the two categories of departments in a Government for inter-departmental payments?

Service departments and Commercial departments. Signup and view all the answers

Which department is NOT an example of a Service Department?

Department of Government Printing. Signup and view all the answers

What dictates the adjustments made for transactions between two Governments?

Provisions under the Constitution and mutual agreements. Signup and view all the answers

What is the procedure regarding charges for supervision associated with payments made between Government departments?

Supervision costs can be included if deemed necessary. Signup and view all the answers

Under which circumstance is a department permitted to make inter-departmental adjustments without requiring standard payments?

If special reasons are recorded and communicated. Signup and view all the answers

What is the typical method for settling payments due between Government departments?

Book transfers are the ordinary method unless impractical. Signup and view all the answers

Who holds the authority to resolve any disputes regarding interpretations of the financial management directions?

The Comptroller and Auditor General with Presidential approval. Signup and view all the answers

Which type of transactions are generally not expected to involve cash payments between Government departments?

Payments settled through the Reserve Bank. Signup and view all the answers

Which of the following is a condition under which a Commercial Department may charge another department for services or supplies?

If the department primarily works on a financial result. Signup and view all the answers

Which of the following statements accurately reflects the role of the Forest Department in inter-departmental financial transactions?

It may charge for products extracted from forest areas. Signup and view all the answers

What financial practice is allowed concerning convict labor provided to the Public Works Department?

No charges at all for convict labor in Jail Works. Signup and view all the answers

In what scenario may a Commercial Department be exempted from charging another department for services?

When charges are specifically authorized by the Government. Signup and view all the answers

How are charges typically applied for services rendered by one Commercial Department to another?

Charges are usually applied based on actual costs incurred. Signup and view all the answers

What type of financial interactions can take place between the Films Division and other departments?

The Films Division can charge for film production services. Signup and view all the answers

Which of the following best describes the purpose of reorganizing departments as Commercial Departments?

To enhance the ability to charge for government services. Signup and view all the answers

What must happen when a project is under construction and additional police guards are supplied?

The cost of guards must be debited to the project concerned. Signup and view all the answers

Which of the following is NOT considered a reason for a department to be classified as a Commercial Department?

It performs functions that are essential to government operations. Signup and view all the answers

Which piece of information is essential for determining if a department's activities can be classified as Commercial?

The financial results achieved through its operations. Signup and view all the answers

Which of the following statements accurately describes Service Departments?

They perform functions essential to the overall functioning of the Government. Signup and view all the answers

What should be the typical means of providing financial relief from payment for services rendered to non-Government bodies?

Via a grant-in-aid rather than by remission of dues. Signup and view all the answers

In inter-departmental transfers, what dictates how adjustments are made between two Governments?

Mutual agreements between the Governments or constitutional provisions. Signup and view all the answers

Which of the following is NOT considered a characteristic of Commercial Departments?

They primarily focus on public service without profit motives. Signup and view all the answers

Which situation is most likely to require payment when a Government department engages with a non-Government body?

In every instance of service provision, unless specified otherwise. Signup and view all the answers

Which aspect is critical in differentiating Service Departments from Commercial Departments?

The primary function of Service Departments is to support governmental operations. Signup and view all the answers

What governs whether a Government department must charge for a service provided to another department?

The nature of the service as defined by departmental regulations. Signup and view all the answers

Under what condition can adjustments occur between departments within the same Government?

If bilateral negotiations yield a mutual agreement. Signup and view all the answers

What is the maximum monetary limit for an agent department to avoid raising a debit against the principal department?

Rs. 1000 Signup and view all the answers

In which scenario will the Defence services NOT be charged for services rendered?

For the use of Government Civil Aerodromes Signup and view all the answers

Which of the following statements is true regarding inter-departmental charge adjustments?

They can be declared unsuitable by the Government in consultation with the Comptroller and Auditor-General. Signup and view all the answers

What type of activities can a branch of a service department levy charges for?

Supplementary work related to its main function Signup and view all the answers

Which of the following is not exempt from rent charges according to the outlined regulations?

Commercial Departments of the Central Government Signup and view all the answers

What should occur when the Government decides that inter-departmental adjustments are undesirable?

Departments will engage in unilateral transactions without adjustments. Signup and view all the answers

What must a branch of a department tasked with subsidiary service do when charging another department?

Ensure charges reflect actual costs incurred. Signup and view all the answers

How is the provision of services characterized between the Civil Aviation Department and the Indian Air Force?

Reciprocal arrangements exempt both departments from charges. Signup and view all the answers

What limits the Defence services from incurring charges for buildings occupied for non-residential purposes?

They are exempt only from civil departments' buildings. Signup and view all the answers

Which type of expenses cannot be debited to the principal department when made by an agent department?

Operational costs that exceed the prescribed monetary limit Signup and view all the answers

What is the treatment of rent charged for residential accommodation provided by one department to employees of another department?

It is recoverable under the normal rules. Signup and view all the answers

Which scenario allows for the cost of land to be debited to a principal department?

When a special officer is employed for land acquisition. Signup and view all the answers

What applies when land is taken jointly for multiple Service departments?

The cost is debitable to the department incurring the most expenditure. Signup and view all the answers

Which costs are debitable to the department for which land is acquired, if not through a special officer?

Only special charges incurred during the acquisition process. Signup and view all the answers

Under what circumstance can a principal department be debited for services rendered by an agent department?

Subject to a monetary limit fixed by the Government. Signup and view all the answers

What is the key defining characteristic of services rendered by a service department under the specified clause?

They are not regarded as actual services rendered. Signup and view all the answers

What happens to costs incurred by a branch of a service department when supplying to another department?

They count as direct inter-departmental payments. Signup and view all the answers

In scenarios where residential accommodation is provided, what is the basis for charging rent?

It follows established rules for recovery. Signup and view all the answers

What must be true about a Civil Officer acquiring land on behalf of a department?

Only special charges can be debited from the acquiring department. Signup and view all the answers

Which statement best captures the charging of services between departments?

Charges may often be waived under certain conditions. Signup and view all the answers

Study Notes

Inter-Departmental Transfers

Rules for inter-departmental transfers are outlined in Chapter 4 of the Accounts Code
Article 55: Governs conditions for a department charging for services or supplies, and record-keeping procedures.
Article 56: Addresses adjustments in transactions between governments, based on constitution or mutual agreement.
Article 58: Requires payment when a government department provides services or supplies to a non-government entity or fund (unless otherwise specified). Relief often comes via grant aid rather than debt remission.
Article 59: Divides government departments into Service and Commercial departments based on principles, including specific examples.
Service departments: focused on integral government functions (e.g., justice, police, health) or those directly supporting government operations. Examples include administration of justice, jails, police, education, medical services, public health, forests, and defense. Examples of other service departments include the department of survey, government printing, stationery, public works (building and roads), the purchase organization for the ministry of works, housing, and supply.
Commercial departments: perform services or provide supplies for payment, operate under commercial principles (e.g., printing, public services). Examples include the currency note press, Anand creamery, biological products section, Indian veterinary institute (Izatnagar), all India radio (excluding specific departments), radio publications, department of lighthouses and lightships, government dairy farm, marine department and dockyards in the Andamans, state transport, shipping office and forest department in Andamans. Also the overseas communications service, land reclamation scheme, Himachal transport department, Sirmur rosin and turpentine factory, purchase of fertilizers, dairy sections of the national dairy research institute in Bangalore. Further, Kandla port organisation, Manipur state transport, kolar gold mines, and Delhi milk scheme.

Inter-Departmental Adjustments

Article 60: Service departments generally cannot charge other service departments for services already part of their duties. Exceptions are permitted with documented justification, like the forest department charging for extracted forest products.
Article 61: Commercial departments typically charge for goods and services, and can be charged in return. This principle extends to certain activities within a department even if the department overall is not a commercial one.
Article 62: Defines rules for one department acting as an agent for another, specifying cases where the principal department should bear costs incurred by the agent one, limited by monetary limits set by the government (e.g £1000 for services).

General

Article 68: If payments are needed between departments, necessary supervision or indirect expenses should also be covered.
Article 69: General guidance on payment methods (book transfers or others decided jointly), depending on the specific business or accounting structure of the receiving department.

Additional Points

Article 71: Disputes regarding the interpretation of these rules are resolved by the Comptroller and Auditor General with the President's approval.
Other articles cover specific services/functions and associated charges (e.g., use of land, forest products, police guards, films, etc.)
The articles address the details of governmental accounts and procedures for transactions between branches.
The use of land (article 62) and other issues connected with it are regulated and clarified.
A branch within a department can levy charges for supplementary services (Article 64).

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Description

Test your knowledge on the inter-departmental transfer rules as outlined in Chapter 4 of the Accounts Code. This quiz covers key articles that govern service charges, transaction adjustments between governments, and the distinction between service and commercial departments. Enhance your understanding of these important governmental procedures.