Class 10 Account – Budget Ledger

This comprehensive guide covers Chapter 13: Budget Ledger for Class 10 Account. These notes include definitions, characteristics, objectives, parts, solved examples, and memorization tips to help you excel in your SEE examinations.

1. Introduction to Budget Ledger

Definition:

A Budget Ledger is a government accounting document that records the details of budget allocation, expenditure, and balance for various budget heads.

Key Points:

• Used in public/government offices to track the utilization of the approved budget.
• Each budget head has a separate record.
• Ensures financial discipline and transparency.

💡 Memorizing Tip: Think of Budget Ledger as a “financial diary” for government offices – it tracks where money comes from and where it goes.

2. Characteristics of Budget Ledger

Key Characteristics:

• Records allocation, expenditure, and remaining budget for each head.
• Updated with every transaction affecting the budget.
• Helps compare actual spending vs. allocated budget.
• Used to prevent overspending.
• Can be maintained monthly and annually.

3. Objectives of Budget Ledger

Main Objectives:

• To monitor and control government or office expenditures.
• To track budget allocation and utilization.
• To assist in financial planning and reporting.
• To ensure expenses are made within budget limits.
• To help in decision-making and auditing.

💡 Mini Summary: Budget Ledger = Financial Control + Planning + Transparency + Decision Support

4. Parts of Budget Ledger

A Budget Ledger is divided into the following parts:

Part	Description
1. Budget Head	The code and title of the budget (e.g., 37611 – Salary of Officer)
2. Budget Allocation	The amount allocated for the fiscal year
3. Budget Expenditure	The amount spent under the budget head
4. Budget Balance	Remaining amount (Allocation – Expenditure)
5. Remarks	Notes on adjustments, corrections, or important observations

5. Solved Example – Understanding Budget Ledger

Question:

If NPR 500,000 is allocated for “Office Equipment,” and NPR 320,000 is spent, what is the remaining balance?

Solution:

Budget Head: 37616 – Office Equipment

Allocation: NPR 500,000

Expenditure: NPR 320,000

Balance = Allocation – Expenditure

= 500,000 – 320,000

= NPR 180,000

💡 Formula to Remember: Balance = Allocation – Expenditure (B = A – E)

6. Methods / Considerations of Preparing Budget Ledger

Methods / Steps:

1. Record the approved budget allocation under each head.
2. Post all related journal vouchers (expenditures, transfers).
3. Calculate actual expenditure and subtract it from the allocation.
4. Regularly update entries based on vouchers.
5. Enter corrections or adjustments if needed.
6. Close the ledger monthly and annually.

Considerations:

• Use only authorized budget codes.
• Match every entry with supporting vouchers.
• Maintain chronological order.
• Avoid mistakes in addition or subtraction.
• Must be checked and signed by the account officer.

7. Closing of Budget Ledger

A. Monthly Closing of Budget Ledger:

• At the end of each month, calculate:
  • Total expenditure
  • Remaining balance
• Helps monitor if spending is on track.
• Monthly reports are prepared using these balances.

B. Annual Closing of Budget Ledger:

• Done at the end of the fiscal year.
• Total up all annual expenditures.
• Final balance is used for:
  • Auditing
  • Planning next year’s budget
  • Financial reports

Solved Example – Monthly Closing

Transaction:

NPR 100,000 allocated for travel; by the end of Bhadra, NPR 35,000 spent.

Calculation:

Budget Head: 37612 – Travel Allowance

Allocation: NPR 100,000

Expenditure: NPR 35,000

Balance: NPR 65,000

This balance is carried forward to the next month.

Chapter End Notes

1. Glossary Table

Term	Definition
Budget Ledger	A book to record budget allocation, expenditure, and remaining balance.
Budget Allocation	Total amount assigned to a specific purpose or department.
Budget Expenditure	Amount actually spent from the budget.
Monthly Closing	Calculation of expenditure and balance at the end of each month.
Annual Closing	Final closure and reporting of yearly budget records.

2. Full Chapter Summary

• Budget Ledger is used to track and control government budget usage.
• It includes allocation, spending, and remaining balance.
• Important for financial control, planning, and auditing.
• Must be updated regularly using valid journal vouchers.
• Monthly and annual closings help ensure proper financial tracking.
• Each budget head has separate records with specific codes.
• Helps prevent overspending and ensures transparency.
• Essential tool for government accounting and fiscal management.

3. Final Memorizing Tips

Parts Acronym

ABEBR – Allocation, Budget Head, Expenditure, Balance, Remarks

Closing Trick

Monthly = Monitoring
Annual = Auditing

Key Formula

B = A – E → Balance = Allocation – Expenditure

Preparation Checklist

V.A.C.S.S. → Vouchers, Authorized codes, Chronological order, Sign by officer, Subtraction check

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