The Governmental Accounting and the Commercial Accounting


Strategetic center

The governmental accounting differs from the financial commercial
accounting in many aspects. We will mention some of these differences.

1-The governmental accounting has no final account. They do not aim at
either loss or profit. They are revenues lists either automatic or
continuous from the finance ministry. They are balanced according to
commercial sections, groups and kinds. Moreover, there are no asset
accounts as in the commercial accounts. The asset accounts of the
governmental bodies are recorded in the statistic books and not the
books whose values are in book groups. Despite the fact that the
situation differs from the theory of units (Seif’s Original
Budget), the cash accounts are accumulated to all the assets of the
governmental accounting unit. It is posted from a year to another.
Moreover, it displays all the assets of the governmental accounting
unit. It is the account that makes these assets as it is previously
Further, the governmental accounts do not include personal accounts.
Dealings are always paid in cash and not verbal accounts like the
accounts of sales and purchased goods. They are not unreal accounts
like the reputation of a shop or any asset accounts.

1- Unlike the financial accounting, in the governmental accounting,
the consumptions are not calculated as part of the facility assets.
The accounts of the governmental accounting do not discriminate
between the capital expanses and the current revenue expenditures. To
safeguard the governmental accounting assets, an annual inventory
should be made by a committee formed by a management decision for this
purpose. Its task is to make an inventory for all the assets of the
government for protecting them from loss and to be sure that they are
registered in records.
Despite being assured of the result through this process, it is not
enough. This is due to the fact that there are many numbers checked by
these committees affirming the correctness of this inventory and the
data available for unbalancing between the actually present assets and
what should exist of these assets.

2- The governmental accounting does not distinguish between the
revenue expenditure and the capital one because the expanses of the
governmental accounting are annual and are not related from one year
to another. On the contrary, in the financial accounting, expanses are
related from one year to anther. Likewise, the balance between
revenues and expanses in the governmental accounting does not aim at
calculating the results of the governmental activity. However, the
goal is to achieve a comprehensive balance between revenues and
expanses for a period of a fiscal year. The expanse goal has no
relation with revenues. However, in the theory of units, the situation
is different as there is a kind of close association between expanses
and revenues. In fact, the expanse is a deduction from revenues at the
same quantity and value. The unit deducted from revenues makes
expanses. That is to say, the connection between them is very strong
and close between revenues and expanses in the governmental
accounting. The connection is a comprehensive and not a partial one.
Here is a kind of contradiction; if the connection is a comprehensive
one, there should be a kind of a partial relation. How this can be
achieved if it is based on a partial relation before being a total

3- In the governmental accounting, there is no capital as in the
financial accounting. Likewise, there is no protection for the money.
It is a financial control on revenues and expanses of the state. It
does not aim at preserving the entity and the ability of capital.
Moreover, there are no governmental accounting depreciations. This is
due to the fact that it has a non-profit and an intangible goal for
citizens. Purchasing the fixed assets can be considered an expanse.
Therefore, they could not be regarded as depreciations. Consumption
aims at protecting the real value for the institution capital. There
is no capital in the governmental accounting. Accordingly, there are
no depreciations.
In case of the desire to purchase the fixed asset instead of the old
ones, another equal sum should be added to replace it. Unlike the
governmental accounting, the cost accounts in the governmental
accounting are of immense importance in assessing performance. This is
as they are interested in depreciation accounts for defining the costs
for the accurately intangible units.

4- Unlike the financial accounting, the governmental accounts do not
depend on the maturity principle. Maturity here may due to either
expanses or revenues. It may be for both of them. It may be for
expanses and revenues. The year-end accounts are closed regardless of
the due expanses or revenues to add them on revenues and expanses.
This is followed in England and the Arab Republic of Egypt.

5- The calculation is developed in the financial accounting from
historical cost to the market one. Moreover, it is moved from the
current cost and the use of the standard numbers for the rise of
assets to make a profit in balance sheet. Accordingly, this leads to
the protection of the capital. Likewise, the depreciations are based
on the standard principle for keeping capital and the ability to buy
substitutes for assets in case of depreciation According to many years
of experience estimated for the asset.
The governmental accounting uses the historical cost as it does not
regard preserving capital or achieving the most profit. However, its
goal is to fulfill the services for citizens. Therefore, the principle
is often the use of the historical cost.

6- It is agreed that the term in the governmental and the financial
accounting is usually a fiscal year. In the financial accounting, by
the end of the fiscal year, the goal is to make revenues or expanses
as a result of activity. Further, assets or the budget can not be
posted from one year to another. All that is posted from the
governmental accounts are the cash balances (a bank or a fund) in the
state using the cash system, consignment and trust balances in the
state that used the maturity basis in expanses. The term concept in
the governmental accounting is different from that of the financial
accounting. This is despite the fact that both of them agreed that the
term is a fiscal year.

7- The governmental accounting system is governed by rules, laws and
principles different from those of systems followed in the financial
accounting. The financial one requires a body corporate independent
from that of owners. However, in the governmental accounts, the
governmental unit is not a body corporate or financial receivables
independent from the state. The revenues and expanses are obtained
from the state. In other words, it does not have an independent body
Similarly, the concept of revenues and expanses is different in the
financial accounting from the governmental accounting. In the
governmental accounting, there is no connection between revenues and
expanses. On the other hand, in the financial accounting, the revenue
is balanced with the cost of obtaining this revenue. The reminder is
the profit of the facility. In the governmental accounting, revenue
has no relation with expanse. It is not acceptable to make a clearing
between them. Every one of them is tackled in a separate way. The goal
in the governmental accounting system is to impose a financial and
legal control on the way of analyzing the revenues. The legal
procedures are practiced according to instructions.
The financial, procedural and legal control on expanses should conform
to the regulations and the laws prevailing in the governmental
administrative unit. Furthermore, it is to impose taxes for increasing
the inputs so that they can assess the services to citizens. On the
contrary of the commercial units spent according to resources.
Moreover, they cannot be increased by the issued decisions. They only
can increase the collected cash and not revenues by borrowing a loan
from banks that may have major disadvantages on the corporation

8- The administrative units in the state are divided into units whose
goal is to collect revenues. Moreover, they are divided into other
units combining between collecting revenues and rendering services to
citizens. These phenomena do not exist in the commercial accounting
aiming at achieving the proceeds as much as possible.

Aspects of Similarity and Disparity between the Governmental
Accounting and the Profit-generated Corporations

There are some aspects of similarity between the governmental
accounting and the profit-generated corporations. They are shown as

1-Both of them use the concept of the double-entry system (this
concept does not exist in Seif’s Original Budget)

2- Both of them are recorded in journal and posted to the ledger and
the subsidiary ledger. The scientific accounting style in forming
accounting structure does not differ from the governmental accounting
about the commercial accounting. Recording is done in documents of the
general journal and it is posted to ledgers or the subsidiary ledgers.
In addition, results are extracted in budget and the final accounts.

3- They prepare the balances of the daily and monthly audit.

4- They have the same classification operations for accounts either in
revenues or expanses in the private sector accounting manual or the
typical manual or the unified accounting system in the governmental
bodies divided into sections, groups, items and kinds as it is in
Kuwait and Egypt.

5- Both of them share the same accounting names as expanses for
furniture, cars and lands. All the accounting terms in the
governmental or the commercial accounting like revenues, expanses and
cash accounts.

6- The accounting unit in the governmental body similar to that of the
accounting unit in the commercial accounting. Both of them are parts
of the economic entity. They use money in exchange and revenues. The
financial systems are similar in both of them. Likewise, both of them
use a cost system similar to the purpose of getting unit cost or the
rendered service.

7- Both of them agree on the concept of the one-year periodical unit
of calculating the business results. This period may differ in the
governmental accounting and the commercial accounting in accordance
with the circumstances of each sector and the state itself. However,
both of them agree that the period aspect is often a year.

8- Both of them use money as a calculating unit used in both the
governmental accounting and the commercial accounting. In both of
them, the calculating unit is cash as a means either in the items of
the double-entry books or in the final results. This is despite the
reservation in using the theory of units (Seif’s Original
Budget). This is due to the fact that the measuring unit is unit and
not the value. In addition, the measuring tool is the classified unit
and not the cash.

The Aspects of Disparity

There are several differences between the governmental and the
profit-generating institutions. They will be shown as follows:

1- The governmental accounting does not seek profits while the sole
goal for the financial one is to make profit as much as possible

2- The commercial accounting has assets and liabilities. On the other
hand, the governmental accounting has revenues and expanses. Moreover,
the assets are treated statistically in records. It has no
relationship with the accounting cycle. However, in the theory of
units, cash makes the accounting unit assets.

3- There are no depreciations in the governmental accounting while
this is necessary in the governmental costs. However, depreciation is
a principle of the cost principles in the commercial accounting.

4- The governmental accounting is related to the state- developed
plan. On the other hand, the commercial accounting is related to the
main goal of the institution and activity.

5- The governmental accounting is regulated by laws, rules,
regulations and directives from the government. They are issued from
the finance ministry and the planning ministry. On the other hand, the
commercial accounting is regulated by the trade practices, principles
and the prevailing accounting rules.

6- The governmental accounting is committed to expanses within the
limits of the funds on the level of kinds, parts and articles. These
limits should not be followed without getting the necessary approvals.

7- The governmental accounting is developed as a result from the
increasing importance of control system. That is to say, it is
developed as a result of the trade practices and principles as well as
the general rules in the financial accounting. Moreover, it results
from the development of the accounting thought in applying these
principles and finding new principles governing the accounting
relationships in practice.

8- In the governmental accounting, it is not acceptable to assign
specific revenues. They are assigned to spend on specific articles in
budget. However, in the commercial accounting, it is possible but
according to the administrative arrangement for the commercial

9- In the commercial accounting, asset depreciations are accumulated
to replace an asset for another after it is depleted. On the other
hand, in the governmental accounting, it is for buying an asset, there
should be an allotted credit for buying this asset. Likewise, there is
no annual accumulation for this asset depreciation.

10- The cash money in fund or bank in the commercial accounting
represents a part of the facility assets and obligations. Money does
not represent an independent unit from assets and obligations as they
are interacted with each other.
In the governmental accounting, cash in fund or bank is not regarded
as an independent accounting unit with its revenues and expanses as
well as balances from one period to another. Revenues and expanses
that usually equal cash in the governmental accounting represent an
independent accounting unit of an independent individual entity in
view of the fact that they represent the government.

11- Credits in the governmental accounting do not allow spending these
credits without firmly established laws and directives for the
processes of expanses on the condition that the allotted credits
should not transcend these laws. In the ledger, the credited amounts
should be placed for every expanse of the governmental expanses. On
the other hand, in the commercial accounting, the exchange limit is
not determined by defined credits. The exchange operations are
governed by internal rules in the facility keeping up with its goal
and internal plan.

12- The commercial accounting represents assets and liabilities in its
balance sheet graded according to its liquidity. There are fixed
assets and circulating ones and fixed liabilities and circulating
ones. The reminder between the circulating assets and the circulating
liabilities expresses public capital in a corporation.
The governmental accounting is closer to the public capital in a
facility than in assets and liabilities. It faces a main interest for
cash represented in fund or bank in a lesser degree than stock and
much lesser degree than assets of the governmental body. They are
registered in statistic records unrelated to the accounting operations
for the governmental accounting.

13- Expanses in the commercial accounting represent the necessary
sacrifices to make revenues. The difference between revenue and
expanse is the profit of facility. On the other hand, in the
governmental accounting, expanses represent obligation on the credits
of the governmental body should be spent according to rules,
directives and the regulations regulating the expanse process.

14- The reason for submitting and investing money in the commercial
accounting is to make the utmost profit for achieving economic and
social welfare as much as possible for the individuals of the society
regardless of getting back the cost of this service or part of it or
vice versa.

15- The sources of revenues in the commercial accounting usually arise
from the contributing partners in corporations or from shares in the
limited companies or bonds and loans.
The money sources in the governmental body come out from tax, loans,
credits and aids. The revenue sources in the trade corporations
limited in capital, bonds or loans. However, money sources in the
governmental institutions are limitless.
They can be increased through the increase of taxes or depletion of
the state sources of oil, iron, mines or aids from the other nations.
The state has an ability to increase revenues according to its
expanses. This ability does not exist in commercial corporations. The
state can afford part of expanses to citizens as returned charges like
returning part of expanses afforded by the state for the sake of
saving this service like the fees of issuing licenses.

16- The units produced by trade corporations are controlled by the
supply -and- demand market. Moreover, they have many players in the
market from the other trade corporations producing the same product.
This leads to the rise of competition to satisfy the consumers. In
addition, this leads to exerting more effort to better the product
launched in market.
However, services performed by the government have no competitor.
There is no corporation or any other institution that perform the same
service in a better way for the consumer. In this case, a control is
necessary in many institutions in view of the monopoly of services
rendered by the state.
Further, there should be a kind of laws, regulations and instructions
as well as ways of control either before spending or after it in many
places outside the governmental body to be sure of applying
regulations, laws and instructions on these bodies. This is other than
the profit-generating institutions regulated by internal regulations
of their own.

17- In the commercial financial accounting, money is considered to be
part of assets in facility. Moreover, it is not independent from the
constituents of the project assets and reports. It represents a single
accounting entity. On the other hand, in the governmental accounting,
money does not represent part of assets. However, accounting unit has
a complete set of accounting records (ledger- personal-journal).
Acquiring this money is from several sources and not from one source.

18- The budget is different in the governmental accounting from the
financial accounting. In the governmental accounting, expanses and
revenues of the budget represent the laws of the approval of the
legislative body.
Similarly, revenues and expanses of the budget can be easily made as
they are based on an accurate study. Moreover, they can be prepared as
a means of planning and controlling the performance evaluation.
However, it does not have the quality of obligation as in the
governmental accounting in view of its obligatory law. Likewise, its
achievement in a degree lesser than the ability of governmental

19- In the governmental accounting, calculating performance in the
governmental programs aims at achieving service for citizens in a
better way and at the least cost. The performance measure greatly
contributes to improving the services offered to citizens. On the
other hand, in the governmental accounting, performance assessment
aims to achieve the greatest profit for the institution.
Likewise, in the governmental accounting, performance assessment is
related to the allotted credits for this performance. On the other
hand, in the commercial accounting, performance assessment is
connected with achieving the greatest flows for the institution.
Therefore, it is related to the increase of revenues and profits and
not performance.

20- The commercial accounting applies the maturity principle in its
accounting system for the relation between expanses and revenues in
the fiscal year regardless of collection or spending. As a result,
this facilitates the comparison processes necessary to evaluate the
performance of the facility.
The governmental accounting often pursues the cash principle in
revenues and expanses. Moreover, it may adopt maturity principle in
expanses to display them correctly. However, the cash principle for
the revenues along with systematic restrictions necessary to confine
the due revenues but in a way that does not affect the real accounts
for the governmental bodies. The effect of revenues here in the
systematic accounts is for reminding only and not in accounts
affecting the final account and the budget credits. Most trade
institutions use the maturity base in revenues and expanses in
accounts. Nevertheless, the most governmental bodies use the cash
principle or the adjusted cash amount.

21- In the commercial financial accounting, amounts can not be spent
without an invoice (document) that verifies the spending process. On
the other hand, the assigned budget credits recorded in ledgers before
spending them. This means before completing the spending process
itself. Similarly, the spending process itself may be divided into
several items and kinds and not one kind or one item.

22- Taxes may be imposed on the profits of the commercial units.
Therefore, its accounting system should be a means of displaying the
volume of profits during a year so that taxes can be imposed on
profits according to the prevailing taxation laws. On the other hand,
the governmental bodies are exempted from taxes. This is because its
accounts are subject to control over money and not for knowing the
profit volume. Unlike the commercial facility, the goal of the
governmental bodies is to offer the services of citizens and not
making the greatest profits.

23- The commercial units assess its historical values as present and
marketing values or by using the standardized numbers. This is for
knowing the real value for the profit quantity achieved for the
commercial facility. This is due to the fact that the historical
values do not give the real picture for the facility profits. However,
the governmental institutions do not aim at making a profit.
Therefore, the historical value keeps up with the goals in achieving
the best services to a society. The historical measure keeps up with
that of income in the governmental institutions. On the other hand,
the historical measure in the commercial corporations does not reflect
the real picture of the income of the facility.

24- In the commercial facility, there are auditors who oversee the
sums before expending in accounting units. Similarly, book checks and
results are supervised by chartered accountants outside the accounting
unit in exchange for fees fixed by the facility for these accounting
offices. In addition, its balance sheet represented in final accounts
in trade ministry and banks are not accepted unless they are credited
by an outside chartered accountant. On the other hand, finance
ministry is only responsible for controlling expanses in governmental
bodies. Further, it is responsible for preparing the annual budgets
and extracting the final accounts that controlling the expanses to
verify its correctness. Moreover, the accounting department, the
Central Accounting Office and finance ministry are responsible along
with the institution for extracting accounting results represented in
the final accounts for the facility. In addition, they are responsible
for preparing the financial budget annually according to rules and
instructions issued by the finance ministry in this regard. The
directives in the form of obligatory laws and rules issued by the
cabinet to regulate the financial matters.

25- In the commercial accounting, revenues are assessed during
budgeting the estimated budgets. Then, expanses are evaluated in next
stage in light of assessing revenues. On the other hand, the
governmental accounting expanses are evaluated first. On the other
hand, revenues are conducted by different means to cover the expanses
in view of state sovereignty through which the required money is
conducted to cover the expanses.

26- The commercial accounting has an independent body corporate. This
is because it owns its assets and obligations against these assets.
However, the governmental accounting does not have any independent
body corporate or capital through which the total assets are owned.
It has an intangible activity and does not lead to obligations on its
assets. They carry out the instructions and laws that intend to show
how to use these allotted credits. Moreover, they have no obligations
on their invested assets from capital as in the commercial facility.

27- The governmental units are under restrictions and conditions that
define how to bring revenues and how to conduct expanses. The assigned
credits in budgets are not spent without directives defining the ways
of expanses. The commercial accounting does not comply with defined
restrictions from creditors and shareholders. The project managers are
free to conduct its resources without any restrictions imposed by aid
owners, creditors and shareholders.

28- In the commercial accounting, the inventory of the stock-in-trade
goods and assets is a principal condition for determining business
either in profit or loss. However, in the governmental accounting, the
inventory of the stock assets aims at checking the existing assets.
Calculating expanses and revenues in the governmental accounts does
not require an annual inventory in the cash system. Nevertheless, the
inventory is not performed to check assets and record in statistic
records as well as keep control and not to define and calculate the
results of governmental business and the final accounts for the
institution as a statistic statement to display the value of these
assets recorded in statistic books away from the documentary cycle of
the government.

Researches on the Governmental Accounting

In the following pages, researches on the governmental accounting are
undertaken by the author. We will refer to some of these researches so
that they can be benefited in this field. They are patterns of
researches that can be applied in different situations after
determining the subject of research. Our goal is to show how to
develop them and the factors necessary for this development. As a
result, this will lead to save a great deal of time, efforts and cost.
These researches are:
1-A computer program in the expanse section in general accounting
2-Innovative ways to prepare bank adjustments for a whole year
correctly and quickly
3-The financial control on garages
In the next few pages, there are explanations:

A Computer Program on the Expanse Section in General Accounting

The most important handmade works in the expanse section:
1- Preparing expanse bonds
2- Recording these bonds in serial numbers
3- Preparing cheques and the exchange card
4- Preparing books of exchange transfers

To transfer these handmade works to information in the computer
systems, the following should be taken into account:

1- Coordinating between the general accounting sections and between
them as well as the balance-sheet control and the salaries control.

2- Imposing an internal control system in the automatic program in the
section to guarantee filling gapes

3- This program includes the internal control system

4- Guaranteeing useful and quick information to meet the daily
inquiries from men in charge and auditors, sections and the other

5- Completing the efficiency of the accounting system in general
accounting by placing governmental receivable accounts and the
commercial receivables of employees and workers. It is a reference in
time of need and especially this kind of accounting lost in the
governmental accounting despite being important.

The operating way of the system

First: Inputs

1- Data about employees and workers is entered in the program. This
data can be taken from personnel computer after getting the necessary
approvals after inserting any modifications to them.

2- Data about the governmental departments is entered represented in
ministries, institutions and bodies as well as the national

3- Data about corporations and the commercial institutions that deal
with these bodies is inserted.

4- Detailed files are opened for every group from the three groups in
the program. They can be accumulated on the level of the group. For
example, the group number (1) represents data on each employee
separately and the spent amounts. Likewise, the total expenditures are
given to all employees. In addition, the expanse percent and the total
exchange of due money.

Second: Output

1- Preparing and writing cheques, exchange permits as well as
2- Extracting the account statement for every employee or worker
showing the spent sums and their kinds during a specific term of a
week, month and a year. Likewise, a total account statement is shown
for every group of input groups and all the expanses in all groups
during any period.

Third: Identicalness

Identicalness is made weekly for the movement of expanses with the
journal in the general accounting and the bank books as well as fund
along with the necessary settlements.

Innovative Ways to Prepare the Bank Settlement for a Whole Fiscal Year

The accounting term starting from 1/7/1991 till 30/6/1992 includes
about 480 account statements. The monthly account statement represents
about 40 pages including the bank movement during a whole month. The
bank settlement is no longer made during a whole fiscal year.
Therefore, we have 480 pages of the account statement from the central
bank. They are required to be identical to books extracting the bank
settlements in 30/6/1992 during a week and for making a settlement in
the required period, the following ways can be applied:

The First Method:

This way aims at preparing the bank settlement in this period. The
necessary duration for preparing the settlements about this term is
about (7×12=84) three months of work. Increasing the number of these
individuals traditionally in settling does not lead to accelerate this
action. This is because the traditional ways of settlement are related
to each other. Accordingly, any mistake from any person will increase
the days necessary to finish the settlement. To accelerate the process
of preparing the bank settlement in order not to exceed seven days,
the following methods can be pursued:

The first method

1- It includes making settlement for each month separately.
Accumulating these settlements means preparing a settlement during a
month (6) /1992. This method includes months’ independency,
then, it merges them. Accordingly, they become related giving us
settlement in the known way.

2- Preparing the month of books accompanied by a month of bank
statement in one group and for every month severally and the bank book
for the institution for each month

3- Placing the book bank balance, its beginning and end in each month

4- Distributing these months into one group that consist of 9
individuals and 12 persons: Each individual is distributed on a month.
During five days, it should be submitted with the settlement. The
latter includes independency in work for every month without being
committed with the other month. As a result, this guarantees work
individuals distribution without being restricted with months.

Independent Settlement

× × the book balance at the end of a month (monthly settlements)
(+) Cheques in books that are not mentioned in the bank statement
(-) Deposits in books that are not mentioned in the bank statement
(+) Deposits in the bank statement and are not mentioned in books
(-) Cheques in the bank and are not mentioned in books
× × Settlement balance “The initial settlements of the balance
in a month”
(-)Balance increase in the initial book month on the balance of bank
(+) Reducing the balance of the beginning of the book month under the
balance of bank statement
× × the initial balance
× × the balance at the end of the month in a bank statement

In case of submitting these months in the above-mentioned settlement,
this means that the settlement of (6) /1992 is prepared. The committee
is assigned to prepare this settlement after reviewing the previous
settlements for the last year. The settlement reaches the month 6

The Advantages of This Method

1- It is quicker in preparing the settlement for the month 6 /1992
during five days or a week at most.
2- It makes work distribution without problems
3- In case of the settlement balance, it means that the settlement is
correct although it is independent from the other months.
4- It facilitates achieving this task as there is no settlement posted
from present months to previous ones. As a result, this will
facilitate settlements accurately and quickly.
5- It guarantees benefiting as many numbers as possible working in
bank settlement. This number can be increased to guarantee the speed.
6- It submits the settlements of the last year. This means that the
settlement of the month (6) /1992 usually and traditionally.
7- It guarantees that there are no mistakes moved from one month to
another. This is due to the fact that differences are limited and can
be handled.

The Second Method

It is the descending movement in making settlement from month 6 /1992
to the month of 5 etc. It is possible after three months that the
settlement of the month 6 /1992 is prepared. The assigned committee
can undertake this. There is no reason in this method to start from
7/1991 till 6/1992. This descending order will guarantee the
differences expected to equal zero in 6/1992. Consequently, the
settlement of the month of 6 /1992 is as follows:

(6) /1992 bank + settlements + books - bank books
mo. (6) mo. (6) mo. (5) mo. (5) = mo. (6)

(5) /1992 bank + settlements books - bank
mo. (6) mo. (5) mo. (4) mo. (4)

Month (6) 1992 is follows:
Bank + settlements + settlements books
mo.6 mo.6 mo.5, mo.4 period = mo.6

This is achieved by assuming that the difference between books and
bank statement is embedded in the settlements of month (6), (5) and
(4) /1992
This means that the differences are turned into zero

The advantages of this method:

1- Speed in preparing the settlement of (6) /1992
2- The committee assigned to undertake this task during a week
submitting the settlement of the month 6/1992
3- Saving about 75% of effort and time

The Third Method:

It is the usual known method starting from month 7 /1992 till the
reach of 1992.It is costly as well as difficult in dividing work.
Accordingly, it is related to a specific number. If it increases, this
will lead to the delay of achievement and efficiency. Further, the
relation between each month and the previous settlement doubles
settlement burden this month. This is in addition to the difficulty of
attaining differences in preparing settlements.

Financial Control over the Garage

The importance of the program of financial control over the garage.

The financial control garage program is one of the important programs
that takes into account the control based on quantity and value. In
this program, depreciated quantities in cars and prices can be known.
Accordingly, the total expended value can be determined in these cars
during a specified period. This is in addition to other statistic data
that can be shown. Indeed, the rule in any accounting operations is
taken as a quantity. Therefore, in this program, details on
depreciated quantities and values of spare parts are shown.
Accordingly, this leads to knowing the real value for consumption of
cars and spare parts during a specified accounting term. This leads to
make the right decisions prudently about these cars.

The Relationship between this Program and Cost Accounting

Cost accounting includes cost factors in budget parts divided on the
cost centers and units. The spare part process in the second part
represents one of the cost factors. The first group of the second part
includes commodity requirements. It includes the first part and the
number of light tools. The program displays analyses for this part in
quantity, price and value. This stems from the cost accounting in its
analyzing shapes. However, it is not enough to show the actual cost of
cost center as in garage.
The program does not distinguish between revenue expenditure
depreciated from the spare parts and other capital expanses like
buying a motor, for example. This is not from cost accounting of
depreciations. This is due to the fact that it increases the value and
the age of the car itself. It keeps up with such a financial
accounting concept for this purpose. It is considered expanses on the
part of cars. Therefore, the cost accounting is complementary to this
program. This program gives a benefit to financial analysis for all
aspects of expanses on a garage after joining all amounts with the
basic units in garage such as all kinds of cars (light-middle-heavy)

Importance of Financial Control Garage Program

Financial control program plays a key role in displaying all the
analyses of the expended amounts after joining the quantity and value
of the basic units exchange in garage: Motor vehicles. This program
analyzes all kinds of expanses of spare parts on cars. Therefore, it
is important in giving the accurate analysis given by this program
according to timing order. As a result, we can compare the cost of
repairing cars in case of repeating the maintenance process. Likewise,
it displays the garage activity in repairing processes. This includes
the dates of buying and selling these cars. In addition, this controls
the consumed spare parts of these cars.
This includes a statistic cars distribution in administrations and
centers affiliated to the body. This shows accurate statistics about
numbers of cars in every center. This is in addition to kinds and
items of this car whether they are light, medium and heavy detailing
the purchase value and depreciation sums of the present value.

The Association of the Program with Financial Accounting

This program is related to financial accounting. What is spent on
spare parts in this program enters the second part group (2) article
(1) the commodity requirements, spare parts, tools and equipments.
Hence, the expanse accumulations in these cars during one month. For
example, it should be balanced with expanses on this article in the
monthly loan (the monthly financial report) sent to the finance
ministry after making some necessary settlements for this comparison.

The Relationship between this Program and purchasing Department

From the quantitative aspect (spare parts), the program is related to
warehouses. What is spent as spare parts depreciations in the form of
car cards are the consigned quantities from warehouses to garages. The
rest is what remains in stores. The information existing in the car
maintenance department is divided into:
1- The garage department: Cards about every car item, the volume and
days of every spare part fixture is shown separately.
2- Data on cars: Files and details of each car (purchasing date-the
body number-the motor number).
Accordingly, what is spent from warehouses as spare parts sent to
garage should equal quantities of spare parts fixed in cars during a
specific period. This should take into consideration the quantities
delivered to the garage as the expenditures of monthly imprests
granted for men who are responsible for the garage. This is to cover
some of the complementary parts for fixing these cars in warehouse

How to Control the Garage?

The control over the garage is represented in two basic parts:
1- The quantities are registered separately in every car’s card.
Then, they are sent in ready-made models to the financial affairs
2- The quantities supplied to the garage as warehouse department or
monthly loans in transport and maintenance should equal the total
spent quantities on cars from cards of these cars. The difference
should exist in warehouse in the transport maintenance department.
This is achieved by a representative of the financial affairs in the
department of transport and maintenance.

The Used Models

1- It is a statement to discharge the consumed spare parts daily from
the car cards after preparing, overseeing and sending them to the
financial affairs of a copy and original
- The original for the financial affairs
- The copy is kept in the files of garages
2- Supply application from the garage to warehouse (store) an original
and 4 copies
- The original for the accounting stores
- A copy for the resources
- A copy for the financial affairs
- A copy for the purchased department
- A copy for the responsible store

The Reports Extracted from Programs

Through the program, we can conclude the following reports
1- The report with all the cars including kind-the purchasing date
– purchasing price – industry year….
2- The report shows the purchasing value and the consumption amount
and the present value with showing numbers, items and other data.

3- Report shows the cost of maintenance on cars during a specific
period for the medium, light and heavy as well as consumed quantities
in addition to the value of every kind of these cars

4- The report distributes cars on revenues, centers and names of
Sub reports required from these principal reports

The kinds of cars including program:

The program includes three chief kinds of cars that are:
(a) light cars
(b) medium cars
(c) heavy cars
Each car should be given including the previous kinds to recognize

Performance Assessment

Contents of the Periodic Reports

The periodic reports (monthly-quarterly-semiannual-annual) on the
following data:

1- The purchasing cost for every kind of these cars
2- The present cost for every kind of cars (light-medium-heavy)
3- Cost of maintaining cars during the period from ….. To
…. For every kind of these kinds
4- Seeking the help of showing this by statistic schedules.
5- Crystallizing these schedules in illustrative charts.


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