Indian Railway Codes and Manuals-Stores code- Vol-II-Chapter-28 (XXVIII)

 

CHAPTER  XXVIII 

CHECK AND PAYMENT OF STORES BILLS

2801. The liabilities incurred in connection with 'receipts' of stores are discharged either :
(a) by direct payment; or
(b) by means of book adjustments.
2802. Direct Payments.—Bills in respect of which direct payments are made, are in respect of :
(a) Purchases arranged by the Controller of Stores ;

(b) 'Local purchases' of petty stores, arranged through the Directorate General of Supplies & Disposals, in cases in which the Directorate General of Supplies and Disposals has authorised direct payment to the Suppliers ;

(c) Supplies of timber ;

(d) Supplies of Coal, Coke and oil fuel;

(e) Sewing and tailoring charges;

(f) Customs duty on 'imported stores' ;

(g) Loading and unloading charges due to contractors;

(h) Port dues, wharfage, etc.

These are in respect of bills submitted for payment in terms of contracts placed by the Railways.

2803. Book adjustments.—These are in respect of :

(a) railway inter-departmental transactions as in the case of stores returned to the Stores Depots and manufactured stores supplied by railway workshops to Stores Depots— these items have been dealt within Chapter XXVII;

(b) payments due to other Government Departments where the Exchange Account facility is available;

(c) payments due to other railways.

2804. Payment for Direct Purchases by the Controller of Stores.—In all cases of direct payments, the procedure for the internal check of bills for stores supplied should generally include 

(i) a check of the Purchase Order (S. 714) on firms as, described in paragraph 2805; 

(ii) a check of the Receipt Notes (S. 719 or 726) which notify the actual receipt of the stores ordered for, as described in paragraph 2807; and 

(iii) the maintenance of Purchase Account Registers (S. 2809) to enable a record being kept of the liabilities incurred on account of stores purchased from each supplier that have not been discharged by payments, pending the detailed check of bill as described in paragraphs 2818 to 2821. 

2805. Check of Purchase Orders.—As stated in paragraph S. 715, a copy of the Purchase Order will be received by the Accounts Officer, Stores, direct from the Controller of Stores On receipt of this, he should see : 

(i) that there is continuity in the number of Purchase Orders (missing numbers should be reported to the Controller of Stores for necessary action); 

(ii) that items of stores, Purchase Orders of which are beyond the powers of purchase by the Controller of Stores have been sanctioned by the competent authority ; 

(iii) that the Purchase Orders do not infringe the Purchase Policy Rules in Chapter III; 

(iv) that the Purchase Orders do not contain any items of stores which should be purchased through the Directorate General of Supplies and Disposal; and other nominated agencies except in emergencies; 

(v) that there is no great variation in the rate adopted from time to time for the purchase of the same kind of material; 

(vi) that the rates and other particulars are in accordance with the agreement with the contractor in case where a contract for the supply of material is in force; 

(vii) that there are no erasures, overwritten figures or unattested correction in the Purchase Orders; and 

(viii) that the Purchase Orders have been signed by a Gazette Officer of the Stores Department, authorised to do so. 

2806. Uncomplied with Purchase Orders.—The Purchase Orders should then be kept arranged serially group by group or in any other order as may be decided upon by the FA & CAO. 

2807. Check of Receipt Notes Part III of S. 719 or 726.—The next document to reach the Accounts Officer is usually the Receipt Notes (S. 719 or 726) Part III, in cases where payments are not to be made on proof of dispatch (S. 2815). 

(i) The number and date of Receipt Note should be entered on the connected Purchase order. The Receipt order No. and date for stocked items should also be indicated on the Purchase Order, for facilitating review of Suspense Register at later date.

(ii) The rates and quantities on the Receipts Note should be compared with the rates and quantities shown on the Purchase Order and the Receipt Note should be enfaced 'Checked with Purchase Order' over the initials of the clerk responsible for the check. In case of part supplies, a note of the quantities supplied should be made on the  Purchase Orders. 

(iii) The 'value' should be calculated and entered into the 'amounts' column of the Receipt Note. In calculating the value of each item of stores, the total value should be rounded off to the nearest praise. 

(iv) It should be seen that there are no overwritten figures, esasures or unattested correction on the Receipt Note, and that the number of the Receipt Notes are in consecutive order.

2808. Periodical Summary of Credits to Purchase Account.'—Where the stores accounting of a railway has been decentralised it is necessary to provide for the individual Stores Accounts Offices to be advised of the day-to-day credits to the Purchase Account maintained at the Headquarters Office in respect of materials pertaining to depots served by such offices. In such cases, therefore, after the above checks have been applied, the Receipt Notes received each day from the stores depots or any authorised inspecting and receiving agency should be sorted by the depots to which the stores are consigned, and listed separately for each depot in the form similar to the Periodical Summary of Issues (S. 2702) showing the number and the date of the Receipt Note and the value. These summaries will be called "Periodical Summaries of Credits to Purchase Accounts (S. 2808)" and sent periodical to the local Stores Account Office concerned alongwith Part IV of the Receipt Notes included therein. The total of these summaries for a month should agree with the total credits for the same month in the Purchase Account Register for stores for stock.

2809. Maintenance of Purchase Account Register.—Generally 'Purchases' are made first and 'Payments' follow. In order to record each transaction as it takes place, Purchase Account Register should be maintained head of account wise by the Stores Accounts Office in the from shown below :

Purchase Account Registers should have separate pages reserved for transaction of each firm or contractor and should be provided with sufficient columns to record details continuously for three years in case of suppliers whose contracts run for more than one year at a time or who are known to have frequent and regular dealings with the Stores Department. Where space permits, the same page may be used for more than one A.T. or Order, enough spacebeing left between two A.Ts or Orders for the number of payments likely to be made on each A.T. or order. In respect of suppliers whose contracts are not expected to run beyond a year, and whose dealings with Railways are frequent a smaller size of register may be used which provides columns for only twelve months {i.e. one financial year). The Purchase Accounts Registers should be chronologically numbered for a financial year, and should be capable of being identified by the year and serial number of the Register. After checks prescribed in paragraph 2807 have been applied the Receipt Notes, Receipt Order Number, Railway Receipt No. and date, Quantity, rate and value of supply should be entered in the Purchase Account Register as a credit to the account of the supplier. Reference to the Register No. and the page number of the Purchase Account Register should be quoted on each receipt Note at the same time. When the bills for stores supplied is received from the supplier, it should, before being passed for payment, be checked against the credit in the Register, and if the amount billed for is found to agree with the credit, the same should be entered as a debit against the entry of credit. Differences, if any, should be immediately investigated and rectified. No bill should be passed for debit to 'Purchases, unless the corresponding credit already appears in the Register except in case of advance payments to firms authorised to receive such advance payments.

Note.— For hundred per cent supplies, Purchase Account Registers may, if considered, convenient, be maintained depotwise in the serial order of the Receipt Note without allotting a separate page for each supplier. All the particulars prescribed in form S. 2809 should be posted in this form for each entry. If the items are not likely to get cleared within the same year, the register may be designed to accommodate 2 years transaction to save tune in carrying over of Balances.

2813. Abstract of Purchase Account Registers.—At the end of each month an abstract should be made in the following form by bringing together the transactions-debits, credits and balances of each contractor.

2814. The vertical total of the figures for the month will represent the debits, credits and balance for the month, of the Purchase Account (Capital 7200). Subject to the exception stated in paragraph 2815, a debit balance should not be permitted in the Purchase Account Register. If a debit balance arises from any other cause it should be investigated and removed at once.

2815. Debit Balances in Purchase Account Register.—It occasionally happens that bills for stores supplied are received, supported by the railway receipt, in advance of intimation of the actual arrival of the stores and that payment has to be made before the stores have been acknowledged as received in the stores Department. Such cases of payment prior to the actual debit to stores should be permitted only in the case of well known firms of commercial standing; but when they do occur the payment made is usually 100/98/95/90 per cent of the value of stores dispatched and should be debited to 'purchases account' even though there is no credit and a debit balance will consequently ensue. When such bills are passed, the postings shall be made in a separate Purchase Account Register reserved for the purpose and immediate steps should be taken to clear the debits in the Purchase Account, by debits to 'Stores' on acknowledgements of the Stores by Depot Officers. In the purchases Account Registers the amount will be posted separately as a debit balance against the account of the supplier concerned. 

2816. Review of Purchase Account Registers.—It is imperative that the postings of credits in the Purchase Account Registers should be correctly made and that they should be up to date, as arrears or incorrect postings will cause delay in passing bills for payment. The register should be inspected once a week by the Section Officer and once a month by the Stores Accounts Officer.

2817. Bills of Supplies—Bills for the supply of stores should be prepared by the suppliers in Form S. 2817 and sent direct to the Accounts Officer, Stores, of the railway for payment.

2818. Bills may not be submitted in duplicate by suppliers. The bills should be supported by Part-II of the Receipt Note (S. 716 or 726) granted by the depot receiving the supply. Bills that are not supported by the receipt Note should be returned unpaid to the party presenting the bill. An exception is made in the case of 95 per cent bills, vide paragraph 2815. Duplicate copies of Part II of the Receipt Note should not in any circumstances be issued to the suppliers by the depots. Ail applications of this nature should be addressed to the Chief Accounts Officer who will take any necessary action in the matter. 

2819. Check of Suppliers bills.—(i} On receipt of the bill it should be stamped with the date Stamp of the Office and examined to see :—
(a) that the bill is prepared in standard form and if not prepared in that form, that all the necessary particulars required by the form are given, and 

(b) that is marked 'original' and is free from erasures and unattested corrections and bears the signature and address of the vendor. 

(ii) The bill should then be registered and numbered in a Register of Bills and passed on immediately to the rate verification clerk, who should verify the correctness of the rates and quantities charged in the bill with those given in the copy of the Purchase Order received direct from the Controller of Stores. The certificate of the correctness of rate and quantities should be signed by the Section Officer, in charge of the section who should also see that the particulars of bills are noted on the Purchase Order to keep a watch over the quantities supplied against an order from time to time. When the order is completed and payment made in full, the purchase order should be stamped 'COMPLETED'. 

(iii) The bill should then be passed on to the clerk responsible for checking the totals and calculations, who should also see :— 

(a) that the rates, quantities and nomenclature in the bill agree with those given in the  Receipt Note Part II; the latter being compared with Part III of the Receipt Note (S. 719 or S. 726). received direct in the Accounts Office (see paragraphs 723 and 729);

(b) that the rates are given both in words and figures; 

(c) that the Receipt Note Part II is signed by the Officer authorised to do so and his signature agrees with the specimen signature kept in the Accounts Office; 

(d) that the purchase is made by the authority competent to do so and in accordance with the rules in force; 

(e) that any extra charges claimed by the contractor such as freight and insurance, etc. are accepted by the Stores Department and are in accordance with the terms of the agreement; and 

(f) that all recoveries due from the contractor are made. 

(jv) The Purchase Account Register Clerks should than verify the amount lying at the credit of the contractor in his ledger. The amount for which the credit is verified should be written on the bill by the purchase ledger clerk under his initials. He should quote the accounts bill number and the amount passed in his Purchase Register against the entry of credit received through Receipt Order, Part III and also post the value of the bill as debit in the Purchase Account Register. It should be ensured that the allocations given in the bill by the Bill passing section agree with the allocation of the Purchase Account in which the credit is outstanding. Once this is done, the Register No..............................................Folio No....................................... of the Purchase Account Register should be noted as aproof of posting the item. Except in the case of bills referred to in paragraph 2815, no bill should be passed unless credit exists in the Purchase Account Register. (The Controller of Stores should furnish to the Account Office a list of the Suppliers entiled to the concession referred to in paragraph 2815). 

(v) In case no credit has been received through Receipt Order, Part III, the bills should be kept pending till the receipt of such credit and inquiries made of the depot regarding the delay in the submission of the Receipt Note.

2820. 5/10 per cent bill etc.—The procedure in paragraph 2817 etc. will be followed mutatis mutandis. 

2821. Defacement of Part II of the Receipt Note.—After each bill has been audited the head of the sub-section will see that the acknowledgement of receipt of the stores, i.e. Part II of the Receipt Note is punched and enfaced with the following stamp: 

Stores supplied under this receipt have been passed for payment under bill No ................................................................................. dated...................................in the Accounts for...........................................for Rs............................................... 

The number and date will be the number and date assigned to the bill in the 'Register of bill received'. The stamp should be affixed at the part where the acknowledgement of the receipt of the stores by the Department is given. 

2822. Audit Enfacement.—The audit enfacement of the bills should then be filled up after which the bills should be submitted to the Section Officer. The Section Officer will be responsible for examining each bill to see that there is evidence that all prescribed checks have been applied and that the audit enfacements are correct. In addition thereto, he should himself check completely at least three bills each day. A note book (S. 2822-Manuscript) should be maintained by the Section Officer in which particulars of bills checked by him and the results of the check should be recorded for the inspection of Stores Accounts Officer. The bills should then be sent up for the Stores Accounts Officer approval and signature, or approved by the Section Officer himself as the case may be, depending upon the financial limits prescribed (by the Board) from time to time. 

2823. Risk Purchases.—Certain contracts for the supply of stores provide for the purchase of stores at the risk and cost of a contractor in the event of his failure to comply with the terms of the contract during the stipulated period. When under such a provision in a contract, an article is purchased at a higher rate than the one shown in the contract, the Receipt Note Part III should be valued at the contract rate and the Purchase Register posted accordingly. On receipt of a bill, the amount at the contract rate should be debited to "purchase" and the balance to miscellaneous advances (Revenue), as recoverable from the contractor who failed to supply the article at the rate contracted for. The latter head should be cleared as soon as the recovery is effected. In exceptional cases, when recovery from the defaulting contractor has been effected before payment at the higher rate has been made, the recovery should be credited to deposits and the amount paid in excess of the original contract rate debited to it. 

Note.—In the case of production units where suspense had "Misc. Advance (Revenue)" is not operated, the suspense head "Misc. Advance (Capital)" may be operated for the purpose. 

2824. Abstract of Bills.—As they are completed, the bills should be included in an Abstract of audited Bills and sent (duly signed by the Stores Accounts Officer) with cherubs for the total amount of the Abstract to the Cashier for payment. Before the bills are sent to the cashier reference to the number of the Abstract in which they have been included should be entered in the 'Register of Bills Received'. 

2825. Prompt Payment of Bills.—No bill should ordinarily take more than four days to be disposed of in the Accounts Office unless there are defects in it which render in admissible in audit or call for further reference. 

2826. Paid bills.-—The bills should be returned by the Cashier after payment for record in the Accounts Office. The date of the receipt of the paid bills should be entered in the Register of Bills and the signature of the record clerk obtained against each entry in the register. The paid bills should then be post-audited on the lines laid down in the Indian Railway Account Code. 

2827. Watch over supplies against contracts.—The particulars of supplies received in the depots should be posted in the Contract Register (S. 503) from the Receipt Notes (Part III). At the end of each month, balances should be struck so that the position of each contract may be ascertained.

2828. Payments for Direct Purchases from Abroad.—When stores are purchased direct from abroad either through contracts placed by Railway Board or by Zonal Rlys./Production Units, the following procedure should be adopted for making payments for the supplies : 

(a) The FA & CAO of the Zonal Railway or the Production Unit indicated in the contract as the paying authority should Open Letter of Credit (L.C.) with State Bank of India or any of the Nationalised Banks. 

(b) On the strength of the telex advice containing Contract No. & date, description of item (s), rate, quantity dispatched value paid received from the banker abroad, the bank in India may be authorised to debit the Railways' account with the Reserve Bank of India without a reference at that stage to the Railway. 

(c) On receipt of the copy of the telex advice or receipt of a copy of the advice from the Bank in India, whichever is earlier, the Accounts Officer who is authorised to make payments under the contract should examine the primafacie correctness of the debit and this should be specifically accepted under his signatures. If this primafacie examination reveals any incorrectness, the matter should be immediately taken up with the bank in India for resolving the issue. 

(d) On receipt of the actual shipping documents, if as a result of an internal check there are defects rendering the payments made unacceptable, the bank in India should on receipt of an intimation from the Railway be required to credit the account of the Railway with the Reserve Bank of India with the actual amount originally debited. This will ensure that the difference between buying and selling rates of foreign exchange is not operated to Railway's disadvantage. 

(e) The exchange rate applicable on the date the foreign supplier negotiated the documents with their bankers should be taken as the applicable exchange rate for working out the liability of the Railway Administration. 

(f) Banks may charge interest for the period between the date of negotiating the documents and the actual payment by the Railway Administration to ensure that there is no avoidable delay in the bank presenting the documents to the Railway Administration, a pre-determined time limit for the above period may be agreed upon with the banks. No interest charges should be paid by the Railway Administration to the banks for delays beyond this limit. Free time, if any, allowed by the banks for such commercial transactions should be fully availed of an all efforts made to complete the transaction within that period in order to avoid/minimise payment of interest. 

(g) In addition, banks will claim commission charges for opening L.C. commitment charges, cable charges, etc. which should be checked.

(h) In case where foreign exchange payment is covered under foreign loads/credit grants, the procedure prescribed in the foreign exchange release/licensing condition should be followed. 

(i) Shipping documents usually prescribed are :

(i) Foreign Supplier's invoice 

(ii) Bill of lading 

(iii) Packing list

(iv) Certificate of country of origin 

(v) Marine insurance policy 

(vi) Any other documents as prescribed in the respective contract. 

(Authority : Railway Board's letter No. 78/RS/G/779/38, dt (14-9-78 and) No. 83/F(S) I/PW.5/ 1 dt. 24-3-83).

2829. Register of Bills passed provisionally.—Items passed provisionally for payment should be entered in the Register of Objectionable Items, and in all such cases the audit enfacement on the bill should be according to the following form:

Bills other than Purchase paid for in cash :

2830. (i) Customs Duty Bills : 

(a) The rates charged should be checked with the Indian Customs Tariff. 

(b) The amount on which duty is charged should be checked with the invoices. 

(c) Customs duty should be included in the cost of stores on which it is levied and the amounts thereof should therefore be extracted in a statement to enable posting to be made in the ledgers. 

(d) The correctness of the rate of exchange adopted for conversion should be checked. 

(e) The insurance charges included to arrive at the CIF value should be checked. 

(F) It should be ensured that the classification of material has been made correctly and discrepancies, if any, pursued. 

All the Customs Duty Bills should be checked cent per cent in the Accounts Office. A manuscript Register should be maintained in the Accounts Office to record all the Customs Duty Bills checked and admitted. 

2830. (ii) Refund of Customs Duty.—All the claims for the refund of Customs Duty arising out of the following be made within proper time and credited to the cost of imported stores (to which it pertained) when refund materialises. 

(a) Wrong rates adopted 

(b) Wrong classification of Material 

(c) Refunds on consignments list or short landed, etc. 

2831. Clearing Contractor's Bills.—(i) In the case of imported stores, the quantities should be checked with the account of tonnage and freight. In the case of materials returned by departments, etc. the quantities or weight shown should be checked with the respective vouchers. 

(ii) The payment to Contractor may be classified into two categories namely :— 

(a) charges for services rendered by him. 

(b) charges arising out of the import, such as wharfage, demurrage, shed opening charges, infringement charges, etc. 

The payments for the services rendered should be checked to ensure that they are in accordance with the conditions of contract agreement. 

It should be seen that rates of wharfage etc. are as per the current scale of rate published by the Port Trust authorities. 

(iii) Check of demurrage charges.—Demurrage charges normally become payable due to one of the following reasons :— 

(a) Non receipt of shipping documents. 

(b) Short-supply, non-supply or delayed supply of wagons. 

(c) Customs formalities, etc 

(d) Failure to clear in time. 

In the Accounts Office the payment of demurrage charges should be carefully checked with reference to the contract conditions before admitting liability. Claims/Bills for payment of demurrage charges should clearly show the liability of the Railway and the reaosns therefore. 

In cases whether the charges have to be recovered from the clearing Agents or the suppliers separate registers should be maintained by the Accounts office and the recoveries are watched Where the demurrage charges have been contested or appealed agaist, the recoveries should be pursued. 

Claims for Short Landing : 

Claims for the items short landed should be preferred by the Controller of Stores in consultation with the Stores Accounts Officer, in respect of missing (or damaged) consignments. Necessary bills should be prepared by the Stores Accounts Officer on the basis of Advice received from Controller of Stores. A manuscript Register should be maintained by the Accounts Office to which the settlement of these claims. The Register should be reviewed monthly by the Stores Accounts Officer. 

2832. Port Trust Bills.—Rates should be checked with reference to the schedules of Rates of the Port Trust concerned.

BILLS PAID THROUGH BOOK ADJUSTMENTS

2833. The debits are raised through :— 

(i) transfer certificates in the case of other railways. 

(ii) exchange accounts, if the supplies or service are by government departments, other than railways. 

2834. Debits by Foreign Railways.—Foreign Railway Transfer Certificates should be subject to the same checks as for bills, before they are accepted and journalised. 

2835. Exchange Accounts.—The bulk of the expenditure debited through exchange account is for the purchases arranged through the Directorate General of supplies and Disposals or for supplies of stationery and printing stores by the Controller of Printing and Stationery India. 

2836. Purchase through the Directorate General of Supplies and Disposals.—Purchases other than stationery effected through the Directorate General of Supplies and Disposals are dealt with for accounting purposes in the same manner as those made by the Controller of Stores, with this difference, that the bills are not paid by the Railway but by the pay & Accounts Officer, Directorate General of Supplies and Disposals and debits are raised by the latter against the Accounts Officer of the Meriting Officer concerned through exchange accounts. The duplicate copies of the bills will be received in support of the debit. On receipt of such debits, the bills should be posted in the Purchase Ledgers as debits to the firm. The transactions should then be journalized by crediting 'Reserve Bank Suspense', by Debit to 'purchases'. These debits will be in adjustment of the items previously credited to the Purchases Account by debit to 'Stores' on receipt, of the Receipt Note (Part III) from the Controller of Stores. A separate set of Purchase Register should be maintained for purchases made through the Directorate General of Supplies and Disposals and the outstanding items to this set of registers should be analysed at the end of each month and agreed with the General Books. 

2837. Percentage Charges.—The Directorate General of Supplies and Disposals levies departmental charges for the following services rendered at rates laid down from time to time

(i) Stores purchased through the agency of the Directorate General of Supplies and Disposals :— 

(a) Purchase. 

(b) Inspection. 

including all sampling and testing before the contract is concluded and also where necessary, sampling and testing during the currency of the contract. 

(ii) Stores purchased direct by Controller of Stores.—The charges for analysis and test of chemicals and other stores and for inspection and testing of purchases not made through the Directorate General of Supplies and Disposals carried out at the Government Test House, the Metallurgical Inspectorate or any other organisation under the Inspection Branch of the Directorate General of Supplies and Disposals and for advisory and miscellaneous work will be in accordance with the 'Schedule of charges for testing and inspection work done by the Disectorate General of Supplies and Disposals for the Army Department, Commercial Department and undertaking of the Central Government, all departments under the Provincial Governments, State and Company managed Railways, Indian States and Quasi-Public bodies,' (Copies of the schedule are obtainable from the Manager of Publications, Central Publication Branch, Delhi). 

The Officer-in-charge of the inspection or testing organisation will, as soon as the work is completed prepare a voucher showing the value of work done and forward it in triplicate to the railway concered, which will countersign and return two copies to such officers and retain one copy for record. At the end of the month, the officer-in-charge of the inspection or testing agency will send the accepted vouchers to the Pay & Accounts Officer Directorate General of Supplies and Disposals for adjustment. 

The charges referred to in (i) and (ii) above should be verified and adjusted in accordance with paragraph 2164. 

2838. Supplies of Stationery, etc. by the Controller of Printing & Stationery.—The debits for such supplies will be raised through the Exchange Accounts and should be dealt with on the same lines as the debits for purchases through the Directorate General of Supplies and Disposals.

2839. Printing and binding work done by the Controller of Printing & Stationery.— Debits for any such work will be raised on the basis of statements prepared for 4,6, 8,9,10 and 12 months i.e. in the exchange accounts for July, September, November, December, January, March and March final, so that the control over expenditure and the framing of revised and budget statements, etc. will not be affected in any way. They should be dealt with on the lines, mutatis mutandis, as the debits for supply of stationery, etc. 

2840. Deleted. 

2841. In accounting for the purchases of stores, from abroad the books of account in India have to show the progress of the transaction, i.e. 

(a) payment for the purchases. 

(b) the actual receipt of the stores by the indenter in India. 

2842. The normal procedure for the accountal of these phases of the transaction is as follows :— 

(a) The payments debited to the suspense head of account 'Purchases Imported Cap. P. 7110' by credit to the head of account "Transfer Railway-Secretary, Railway Board, Accounts" in the case of book adjustment or "Reserve Bank Suspense" where direct cash payments are made including Letter of Credit. 

(b) On the the actual receipt of the stores by the indentor in India the suspense head of account 'Purchases Imported' Cap. P. 7110 is credited by debit to the suspense head of account 'Capital 7100 Stores' or other final heads of account under Capital or Revenue depending on whether the materials are taken into stock in stores depots or are sent on directly for use on works.

CONTROL OVER EXPENDITURE AGAINST PURCHASE GRANT

2862. Expenditure Register.—A manuscript register (S. 2862) should be maintained for the purpose of watching expenditure on stores purchased in India as against the allotment. The allotments should be noted from the distribution of the sanctioned amount under the various heads appearing in the Funds Register (S. 506). The expenditure should be noted as regards cash payment through Abstracts of Audited Bills and as regards expenditure for a month should be verified with the debits to 'Purchases' in the General Books. 

ACCOUNTAL OF EARNEST MONEY AND SECURITY DEPOSITS FOR TENDER AND CONTRACTS

2863 Tenders and Contracts for making 'applies of stores have under conditions of Tender or Contract to deposit earnest money or security deposits for the due discharge of the obligations under taken by them. The security may be either in cash or paper securities. Such moneys are held by the Railway till the obligations are faithfully, satisfactorily and completely discharged, when the sums are refunded to the parties concerned. The rules for the accounts! of such securities are prescribed in the State Railway Account Code.

Multiple choice questions:

1. How are liabilities incurred in connection with receipts of stores discharged?

a) By direct payment only
b) By book adjustments only
c) Either by direct payment or by means of book adjustments
d) Through external bank transfers

Answer: c) Either by direct payment or by means of book adjustments

2. Which of the following is NOT a type of direct payment?

a) Purchases arranged by the Controller of Stores
b) Supplies of timber
c) Payment for services of Railway staff
d) Customs duty on imported stores

Answer: c) Payment for services of Railway staff

3. What is checked first in the procedure for direct payments?

a) Receipt Notes
b) Purchase Orders
c) Purchase Account Registers
d) Supplier's bank statements

Answer: b) Purchase Orders

4. What must be verified on the Purchase Orders?

a) Continuity in the number of Purchase Orders
b) Shipping insurance details
c) Supplier's tax identification number
d) Delivery date

Answer: a) Continuity in the number of Purchase Orders

5. What should be done if a Purchase Order is found to be missing in sequence?

a) Ignore it and proceed with the next order
b) Report the missing numbers to the Controller of Stores
c) Cancel the Purchase Order
d) Reissue the missing Purchase Order

Answer: b) Report the missing numbers to the Controller of Stores

6. What document usually follows after the Receipt Note in the payment process?

a) Supplier’s invoice
b) Purchase Order
c) Bill of supply
d) Freight receipt

Answer: c) Bill of supply

7. What should be done if the Receipt Note contains overwritten figures?

a) Accept the figures as correct
b) Return the Receipt Note to the supplier
c) Verify and correct the figures before processing
d) Disregard the Receipt Note

Answer: c) Verify and correct the figures before processing

8. What should be recorded in the Purchase Account Register?

a) Only payments made
b) Only Purchase Orders issued
c) Both credits and debits for each transaction
d) Supplier’s contact information

Answer: c) Both credits and debits for each transaction

9. When are debit balances in the Purchase Account Register permissible?

a) At all times
b) Only for advance payments to suppliers
c) When the supplier has defaulted on delivery
d) When payment is made in advance of receipt of stores and the supplier is well-known

Answer: d) When payment is made in advance of receipt of stores and the supplier is well-known

10. What should be done if a bill is received without corresponding credit in the Purchase Account Register?

a) Pass the bill for payment immediately
b) Keep the bill pending until credit is received
c) Send the bill back to the supplier
d) Ignore the bill

Answer: b) Keep the bill pending until credit is received

11. What should be verified in a supplier's bill before passing it for payment?

a) Only the supplier’s address
b) The bill’s format and correctness of rates and quantities
c) The supplier's stock levels
d) The supplier's previous payment history

Answer: b) The bill’s format and correctness of rates and quantities

12. What happens if there is a debit balance in the Purchase Account Register due to advance payment?

a) It should be ignored
b) It should be investigated and cleared by debiting ‘Stores’ upon acknowledgment
c) The account should be closed
d) The debit balance should be recorded in a separate register

Answer: b) It should be investigated and cleared by debiting ‘Stores’ upon acknowledgment

13. Who should sign the Receipt Note Part II?

a) The Accounts Officer
b) The supplier’s representative
c) The Officer authorized to receive the stores
d) The Storekeeper

Answer: c) The Officer authorized to receive the stores

14. What action should be taken if a bill does not match the details in the Purchase Order?

a) Approve the bill with a note of discrepancy
b) Return the bill to the supplier for correction
c) Process the bill anyway
d) Disregard the Purchase Order

Answer: b) Return the bill to the supplier for correction

15. What should be done at the end of each month regarding the Purchase Account Register?

a) Conduct a review of pending bills
b) Prepare an abstract summarizing debits, credits, and balances
c) Send all records to the supplier
d) Archive the registers for the year

Answer: b) Prepare an abstract summarizing debits, credits, and balances

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16. Who is responsible for examining each bill to ensure that all prescribed checks have been applied and that the audit enfacements are correct?

• A) Stores Accounts Officer
• B) Section Officer
• C) Cashier
• D) Clearing Contractor

Answer: B) Section Officer

17. In cases of risk purchases, what should the Receipt Note Part III be valued at if an article is purchased at a higher rate than the contract rate?

• A) At the higher rate paid
• B) At the original contract rate
• C) At the average market rate
• D) At the rate determined by the auditor

Answer: B) At the original contract rate

18. What should be done with the amount paid in excess of the original contract rate if recovery from the defaulting contractor is effected before payment?

• A) Debited to miscellaneous advances
• B) Credited to deposits
• C) Added to the general fund
• D) Written off as a loss

Answer: B) Credited to deposits

19. What is the maximum number of days within which a bill should ordinarily be disposed of in the Accounts Office?

• A) Two days
• B) Three days
• C) Four days
• D) Five days

Answer: C) Four days

20. When a bill is paid, what should be recorded in the Register of Bills?

• A) Date of receipt of the paid bills
• B) Amount of the bill paid
• C) Name of the person who approved the bill
• D) Vendor details

Answer: A) Date of receipt of the paid bills

21. What should be maintained to record the particulars of bills checked and the results of the check by the Section Officer?

• A) Purchase Register
• B) Abstract of Audited Bills
• C) Manuscript Register
• D) Register of Bills Received

Answer: C) Manuscript Register

22. Which document is NOT typically required when making payments for direct purchases from abroad?

• A) Foreign Supplier’s invoice
• B) Bill of lading
• C) Certificate of compliance
• D) Marine insurance policy

Answer: C) Certificate of compliance

23. What should be done if the internal check reveals defects in shipping documents after payment has been made?

• A) Refund the amount and resolve issues with the supplier
• B) Inform the bank to credit the Railway’s account with the Reserve Bank of India
• C) Pay additional charges to cover discrepancies
• D) Ignore the defects and proceed with current transaction

Answer: B) Inform the bank to credit the Railway’s account with the Reserve Bank of India

24. What should be checked with reference to the Indian Customs Tariff for Customs Duty Bills?

• A) Rates charged
• B) Quantity of goods
• C) Shipping cost
• D) Vendor’s registration number

Answer: A) Rates charged

25. In the case of refund of Customs Duty, what should be credited to the cost of imported stores when a refund materializes?

• A) Claims for short landing
• B) Refund for wrong rates or classification
• C) Charges for demurrage
• D) Commission charges

Answer: B) Refund for wrong rates or classification

26. What should be checked for clearing contractor’s bills related to imported stores?

• A) The rate of interest charged
• B) Quantities or weight with respective vouchers
• C) Vendor’s credit rating
• D) The current stock levels

Answer: B) Quantities or weight with respective vouchers

27. For payments made through book adjustments, which account is debited in the case of supplies or services by government departments?

• A) Reserve Bank Suspense
• B) Exchange Accounts
• C) Transfer Railway-Secretary, Railway Board, Accounts
• D) Miscellaneous Advances

Answer: B) Exchange Accounts

28. When dealing with debits for purchases arranged through the Directorate General of Supplies and Disposals, how should the transactions be journalized?

• A) Credit to 'Reserve Bank Suspense', Debit to 'Purchases'
• B) Debit to 'Purchases', Credit to 'Reserve Bank Suspense'
• C) Debit to 'Stores', Credit to 'Reserve Bank Suspense'
• D) Credit to 'Purchases', Debit to 'Stores'

Answer: A) Credit to 'Reserve Bank Suspense', Debit to 'Purchases'

29. What should be maintained to watch expenditure on stores purchased in India against the allotted budget?

• A) Manuscript Register
• B) Expenditure Register
• C) Purchase Register
• D) Payment Abstracts

Answer: B) Expenditure Register

30. How should earnest money or security deposits for tenders and contracts be accounted for?

• A) As cash receipts
• B) As paper securities
• C) In a separate security deposit register
• D) According to State Railway Account Code rules

Answer: D) According to State Railway Account Code rules

 

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