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Read this article to learn about the preparation of following accounts of railway companies under Railway Companies Act, 1911 i.e.,(a) Revenue Receipts and Expenditures (of the whole undertaking); (b) Capital Account (Receipts and Expenditures on Capital Account); and (c) General Balance Sheet.

1) Revenue, (2) Capital and (3) Debt (comprising public Debt and Loans and Advances). The first division deals with the proceeds of taxation and other receipts, classed as revenue and the expenditure therefrom. (In the case of the Railways, the traffic earnings are the main source of revenues).

Indian Railways maintain accounts in two sets viz., Government Accounts on actual basis and Commercial accounts on commercial lines. Finance accounts are compiled for submission to Government to provide information on ways and means and satisfy the requirements of Government accounting.

Functional Branches Indian Railways has divided itself into 16 zonal railways. Each zone, headed by a General Manager, is semi-autonomous and this creates a matrix organisation where the functional branches are under dual control viz.

Government accounts are presented under a six tier classification, viz., Major Heads (four digits), Sub-Major Heads (two digits), Minor Heads (three digits), Sub-Heads (two digits), Detailed Heads (two to three digits), and Object Heads (two or three digits).

Bills which are payable by the Railway are referred to as 'Bills Payable' and those which are recoverable from other parties as 'Bills Recoverable'.

Principle: In Account current, all the entries are shown net, i.e., after deduction of write back adjustments against each head of account. On no account, should minus results be transferred as plus results of the opposite side of Account. Schedules are prepared separately for Revenue and Capital.