This Book is for Federal Public Service Commission Paper of Senior Auditor BS 16 (A Key to Success in Test of FPSC regarding the appointment of Senior Auditor B-16 Part-II (80% Professional) This is helpful for the NTS , FPSC , SPSC , KPKSC , AJKSC in islamabad

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Experience Requirements

This Book is for Federal Public Service Commission Paper of Senior Auditor BS 16 (A Key to Success in Test of FPSC regarding the appointment of Senior Auditor B-16 Part-II (80% Professional)
This is helpful for the NTS , FPSC , SPSC , KPKSC , AJKSC , PPSC , NTS , UTS , STS , PTS MTS for the Posts of Accountant , Auditor , Audit Assistant , Audit Officer , Accounts Officer , State Bank OG 1 old Paper , State Bank Officer Grade Papers , Business Related Posts and all Tests Related to Economics.
This Is also helpful for the test of Lecturer Management Science , Lecturer Economics through PPSC , AJPSC , FPSC , SPSC ,KPKPSC , and PPSC .
A Key to Success in Test of FPSC regarding the appointment of
Senior Auditor B-16
Part-II (80% Professional)

Accounting Principles & Procedure:
, Transaction-Any financial dealing between two person or things is a transaction. It may be relate to purchase and sells goods, receipt and payment of cash and rendering of service by one party to another.
OR
A business event which can be measured in terms of money and which must be recorded in books of account is called tons action.
Classification:-

Transaction may be divided into two groups,
(1) Cash Transaction-
If the value of a transaction in met is cash immediately, it is called cash transaction, e.g. We buy furniture for Rs. 2000/-from Zubair and immediately pay him in cash. It is cash transaction. (2) Credit Transaction,- If a transaction is made with the consent to make the payment in some future time, against such transaction.
Business:
Any legal activity which is done for the purpose of earning profit is known as business. e.g. banking business, an insurance business, etc.
1-Le is owner of a business. He invests capital in it, gives his time and attention to it. He is entitled to receive the profit or bear loss arising out of it. 10 Capital:- It is the source of funds provided by the owner of the business and it is long term liability of the business which is re-payable to the owner at the time of dissolution of the business or any other case. Drawing:- The amounts of cash or goods taken away by owners from the business for his personal use are known as drawings. .)› pihrcfrases:, in accounting language the word "purchases" has special meaning. When tradable goods are brought in business it is caked that purchases have been made.
• Cash Purchases:-
If goods ,are purchases from a supplier and Payment is made to him at the same time, such purchases are known as "cash purchases".
• Credit Purchases or Purchases on Account:-
When goods are purchased from seller/supplier and payment is not made to him at the same time, rather the payment is arranged to be made at some future date, such purchases are known as "credit purchases" or "purchases on account",
Purchases Return or Returns Outwards:-
Goods once purchased may subsequently be sent back to the seller for certain reasons, i.e. goods are defective, not according to specification, damaged or below standard. Such return of goods to the seller is known as "purchases return".
• Purchases Discount:-
The concession given by the supplier to the buyer on purchases of goods is known as purchases discount.
Sales: -
When goods of the business are sale out to someone others for earning profit, this is known as safe is made the business.
Cash Sales:-
If goods are sold to customers at a specific price and price of goods is received from them at the time of sale of goods, such sales are known as "cash sales".
• Credit Sales:
If goods are sold to customers and he does not pay the price of goods at the same time but to make payment on some future date, the sales are called "credit sales" or "sates on account". . Sales Returns or Return Inwards:- If a customer to whom goods have been sold finds that the goods are defective, unsatisfactory, below standard Or not according to the specification, he may return these goods to the seller. Such return of goods is known as "sales return". V Trade Discount:- Discount allowed by manufacturer or wholesaler at the time of selling goods to retailer as a deduction from the list price or catalogue price is called trade discount.
Deb Receivable:-
A person who owes money to another is debtor when we say that we owe Mr. Amir Rs, 5000/ we mean that we have received from Mr. Amir 5000/ which we have to repay. We receivable. stand as debtor to Mr. Amir for Rs. 5000/ it is also termed as account payable. Creditors Accounts Pa able:- A person who pays out something or to whom money owing is a creditor, It is also termed as accounts
Commission:-
It is form of remuneration for services rendered by one person to another, Ex Expenses are the cost of the goods and services used up in the process of obtaining revenue. e.g. Salaries, Insurance, rent etc.
known as Revenue FINAL ACCOUNT Debit N ". Expenditures. These are also known as Expenses '.. Expired Cost. t is prepared to determine the profit and loss of the business and its solid reasons’
1- If goods bought n credit are returned to seller for a4ianc. . la: position. a note. This noetebisrycearlideedbdtettibitur1ot'e.o the seller account and inform the seer through TRADING & PROFIT & LOSS ACCOUNT/ INCOME Credit
Note: - If -5 the name of this account, it is made by two accounts that in trading TATE M E NT S,. decredit its the buyer - goods sold on credit are returned by the buyer, L account and note is called credit note. informs the buyer through a note. Ti aount and profit & loss account. Trading Account in prepared to etermine the gross profit or gross loss of a trader while profit & loss

. mount is prepared to determine the net profit or net loss of a trader.
Cash Discount;
It is a deduction or allowance given by a creditor ti debtor before the due dates & profit & loss account/income statement is prepared in Tracoun :„ Discount allowed by manufacturer or wholesale wroth ways. It is prepared in T form (T Account) as well as in report the time of selling goods to retailer as a deduction from the fist price)r.m. catalogue price is called trade discount.

DIRECT EXPENSES
expenses are those which are incurred to convert the raw iaterial into finished goods. Direct expenses are charged to Trading count for example wages, freight, cartage, excise duty etc. MANUFACTURING EXPENSES anufacturing Expenses are those which are relating to manufacturing 'ocess/factory such as factory insurance and factory repair etc. these (perises are direct expenses and shall be charged to Trading Account. PROFIT & LOSS ACCOUNT 'oft & Loss Account is prepared to determine the net profit or net loss 'a trader.
COST OF GOODS SOLO
dictates the cost price of goods which have been sold during a given period, Simply it can he written as Opening Stock + Cost of goods purchase = Cost of Goods Sold - Closing Stock.
v. FICTITIOUS ASSETS/ TANGIBLE ASSETS,
Fictitious or intangible assets are those which have no physical existence and which neither can i. Seen with eyes nor touched with hands for exams Good Will, Prepaid Insurance etc.
vi. CONTINGENT ASSETS
Contingent Assets are those which are arise ah happening of a certain event. For example uncart capital for a limited company. vii. Outstanding Assets Out Standing Assets are those when experts paid in advance are called outstanding assets I. example prepaid wages etc.
DEFINE LIABILITY? WHAT ARE THE TYPES/ CLASSIFICATIOI OF LIABILITIES?
LIABILITY The outstanding amount against the assets of the fr is called liability.
TYPE Of LIABILITY There are following types of liabilities:-
a. FIXED LIABILITIES These are the liabilities which are not payable ,immediately or in near future. These liabilities payable after a long period of time for example lot', f term loans etc.
b. CURRENT LIABILD IES These liabilities are payable immediately or near future such as creditors, Bank loans etc.
CONTINGENT LIABILITIES,
These are liabilities which are arises after happening of a certain event. The event may or may not involve. Thus a contingent liabilities may or may not involve the payment of money These liabilities are not recorded in the balance sheet. It is just sufficient to make a foot note on balance sheet for example a pending case against a person in court etc, debtor fails to fulfill his obligation.
OUTSTANDING LIABILTITES
Outstanding expense or unearned income is called out standing liability for example outstanding wages, outstanding rent, outstanding salary etc.
ACCOUNTING EQUATION
ASSETS = LIABILITIES -I- CAPITAL
DESCRIBES THE DIFFERENCE BETWEEN THE TRIAL BALANCE & BALANCE SHEET:
TRIAL BALANCE,
It is the test of balance
01 obtained from the ledger account. It is a statement of assets and liabilities. It contains the balances of 02 all accounts real, nominal& It contains the balances of assets and liabilities. personal NC's. 03 It is prepared before
03 trading and profit & loss Account. It is prepare after trading and profit and loss account 04 It does not contain the
04 : value of closing stock. It contains the value of closing stock which appears on the assets side.
05 Expenses due but not paid 05 Expenses due but riot paid, income due but not income due but not received do not appear in received appears in the trial balance, balance sheet.

OUTSTANDING EXPENSE
Expenses incurred but have not been actually paid are cafe out standing expenses for example outstanding wages, outstand rent etc. these are shown in profit & loss account as expenses an shown in the balance sheet as liabilities,
PREPAID EXPENSES
Expenses paid in advance before they have fallen due are called prepaid expenses for example prepaid rent, prepaid wages etc. these are shown in profit & loss account by deducting from the relevant account on debit side and shown in balance sheet as assets
ACCRUED INCOME
Earning or income such as interest on loan, commission, dividend and rent receivable from tenant is called accrued income. This will be shown in profit & loss account as income on credit side and will be shown in balance sheet as an asset •
UN EARNED INCOME
Income received in advance but not earned is called un earned income for example rent, interest commission and discount etc which might have been receivable in advance but full service have not been given so for this will be shown in profit & loss account by deduction from the relevant account on credit side and will be shown in balance sheet as liability.

SOME IMPORTANT DEFINITIONS EBIME COST
The sum of direct material, direct labour are called prime cost. It is also called basic or flat cost.
CONVERSION COST/ TOTAL COAST
It is the total cost which converts the basic raw martial from one stage of production to the next stage of production. It is the cost which converting the direct raw material into prepared material or finished goods excluding the cost of raw material.
2. MARGINAL, COQ
It is the difference in the cost of alternatives is called marginal cost. N`CUI I 3. FACTORY OST TOTAL WORK COST
This cost is made up of prime cost plus factory overhead.] other words, it is the figure by which completed goods an shown in the inventory. This is also known as total workt.t cost or total manufacturing cost. 12. 4. VA R.TABLECOSTFI Variable costs are those which fluctuate in proportion to tMi volume of production are ca/led variable .costs e.g. dire; material and direct labour.
Mears purchasing hasing be. yond
DUE oR If EAri, S are. i E. Duet-heads are nclirect exPenses e.g. selling ex droinistration expenses and financing 9, cosi. OF GOODS oaverheads. MANuMCtuR ED expenses are called --e-07-. of goods of the costs manufactured is a summary included in the manufact re of goods e.g. cost materials,
Your capital is called over trading.
TOTAL MAIN 11,
5. FACTORY OVERHEAD 13,
Factory overhead are those costs which are indirectly relate , with production and are incurred before the goods are pt into the finished goods.
6. FIXED/ CONSTANT COSTS
Fixed/ constant costs are those costs which remain fixed total except the charges in the volume of production or sale labors etc.
DIRECT LABOR
WAGES
which converts the raw material into finished goods is called labour engages gaged directly in the production of goods and direct labour.
INDIRECT LABOUR
Which is not Involved directly in the production manufacturing from but helps the manufacturing process indirectly is called indirect labour. INDIRECT EXPENSES In direct expense are those which are not directly related to the production but helps indirectly in the production process is called indirect expense e.g. rent, insurance, Gen expenses etc.
TURN OVER
The total sales of a trader within a given period is called turn over.
DIRECT COST
The aggregate of the material which is directly used in the course of manufacture is carled direct cost.
15. INDIRECT COST.
The aggregate of The material which is not directly used in the course of manufacture is called indirect cost e.g. repair to . machinery, inspection etc. 16. OOOD WILL The value of a business bought as a going concern over and above the cash price of its marketable assets such as houses, lands and plants etc. 17. SINKING FUNDS . A sinking fund is a reserve created out of profit and usually invited outside the business in early marketable securities.
18. DEPRECIATION
Depredation means the gradual decrease in the value of an asset. The net results of asset deprecation are that sooner or later the asset will become useless.
19. DIVIDEND
The term dividend means the profit of a company which is distributed among its shareholders. It is the liability of the company and appears in the balance sheet on liability side.
20. BAD DEBTS
Irrecoverable recoveries from debtors are called bad debts.

21. DOUBTRIUM
When the recoveries from debtors are seems, to become debt, such debts are called doubtful debts.
22. MIMCKin2 Transfer Entries are the entries, which are intended transfer an item form one head of account to another 23.CA,E0 1ASH BOOK The sum of small money which is required for the purpose small payment.

24 SUSPENSE ACCOUNT.
The word suspense means uncertainty. It is an amount it which the transactions are not entered in its Proper heed due to lack of information.
25- PUNCHING MEDIA
Punching Media is an extract of certain date pertaining to a voucher which is sent by audit sections of Controllers Office to the Data Management section of MAG's Office for compilation.
26. PREFERENCEUARE.
These are the shares whose holders have preferential riots
in respect of the nament
capital in the event of winding up. The rate of dividend these shares is fixed.
27. PARTNERSHIP DEED
It is a document which contains all necessary rules regulations which are required to run the partners business.
28. ACCOMMODATION BILL
Accommodation Bill is a bill of exchange which has been drawn and accepted for financial assistance. 29. BILL OF EXCHANGE It is an unconditional order in writing to pay addressed by one person to another, and a person who gives must be Sign in it and a person who, receives it must be accepted. It may be drawn on any paper. Stamp Duty has to be paid on be of exchange. It can be drawn is sets, 30. Promissory Note. It is an unconditional promise in writing signed by the maker to pay on demand. There are only two parties the drawer in to the payee. There is no need of acceptance. It is never drawn in sets.
21. Bank DRAFT
Commercial Banks give the facility of transferring money from one place to another place. So it means that the bank draft is a source of transferring money from one place to another. It.is an order from one bank to Its other branch at another place to pay the specified sum to or the order of the holder on demand for value received.
32. POSTAL ORDER,
It is an instrument like bank draft but the postal department issues it.
33. RANK OVER DRAFT
When a customer is authorized to overdraw an agreed amount in excess of his bank balance Is called our draft/Bank overdraft. The bank charged the interest on the amount which is overdrawn by the customer.
34. TYPE OF DEPRECIATION
There are following types of depreciation.
a. Straight line method b. Diminishing method/ Reducing method c Annuity method d. Depreciation fund method! n group: e, Revaluation method.
5. ANNUITY
It is methods of depreciation in which the valued of an asset along with interest are written down annually by equal installments until the book value is reduced to nil. The annual charge is to be made Out by way of depreciation, which is found out from annuity tables.
6. MEMORANDUM OF ASSOCIATION,
It is a document which contains the right, powers and objects of company business. It is the main document of the business.
ARTICLES OF ASSOCIATION
It is a document, which contains the rules and regulations of the business.

RESERVE FUNDS
It is a fund, which is made against profits of the business to avoid the losses uncertain condition which may arise in future. It is the liability of the business,
COMPANY AND ITS TYPES
Company means an association of persons who contribute mo or money's worth for a common stock and uses it for a corn purpose of business.
a. on the basis of liability b. on the basis of investment a. co The Basis Of liability
(i) Unlimited Company: In these companies, the liability the members is unlimited. It may or may not house s capital. When this company winds up, the private property the members is also liable to pay company's debt,
(ii) Companies limited by share In these companies, the liability of the members is limited to the value of their share.
ON THE BASIS OF INVESTMENT PRIVATE COMPANY

Private company is a company which has the following characteristics

(iii) Companies limited by Guarantee In these companies every member gives guarantee contribute a specified amount of money at the winding company. This company may be formed with or with share capital.
Minimum members are two and maximum members are .50 The shares of the company are not transferable. iii, The company uses the word private with Its name. iv. It is not necessary for the company to issue prospectus. IL PUBLIC COMPANY Public Company has the following characteristics a. Minimum members must be "Seven" and no limit for maximum members. b. The word limited is used after the name of company. c. Shares are easily transferable. d. It is necessary for the company to issue prospects.
PRIVATE COMPANY
PUBLIC COMPANY
1 In private Company Minimum members are two and maximum members are fifty -
In Public Company minimum members must be Seven and there is no limit for maximum members.
2 The shares of the company are not transferable .
3 The company uses the word "Private" with its name .
The shares of the company are
transferable .
The Company Was The word "Limited" after its name.
4 It is not necessary for the company to issue prospectus .
A private company cannot Kits Its shares to public .
The audit of the company is not compulsory .
It is necessary for the company to issue prospectus . A public company can sells its 1 share. The audit of the company it I compulsory.
7 The member of directors must be at least two.
The number of directors must be at least seven .
BRANCHES OF ACCOUNTING
it is the orig financial Account prteinpa confined to the preparation of financial statements for the use of outsiders like real form of accounting. It is mainly creditors, bankers and financial institutions etc the main purpose of financial accounting is to calculate profit or loss made by the business during the year and exhibit financial position of the business as on a particular date, Cost Accounting: The main purpose of accounting is to determine the of the product and to help the management in the control of cost. In the first phase it determines the standards of all the elements of cost i.e. Direct Mate.ia!,D;rect Labour and FOti cost for production department to control the ccs: of the product.

,Management4cc Accounting which provides necessary information to the management for discharging its hinctions. It is the reproduction of financial accounts in such a way as will enable the management to take decision and to controf activities.
Cash s
System of Accounting
stem of Accountin It is a system in which accounting entries are Made only when cash is received or paid. No entry is made when a payment or ;receipt is merely doe.
2I
Accrual System of Accounting: It is a system in v•Mich accounting entl are made on the basis of amount having become due for payment or receipt. For example payment system of salaries of P.'4AD. ACCOOUNTI NG CYC.E ACCOUNTING PROCEDURE.

gig ACCOUNTING SYta
It is a system of collecting, processing and evaluating the operating data i.e. cost of products, cost of operation,cost of processing he jobs, cost of material used, cost of labour used etc, for internal Manning and control as well as for external control and reporting,
iww CSS
here join group VvhatsApp

system of Cost Accounting
i) Actual Cost Accounting System
Standard Cost Accounting System • '",41 —4 hi ra n I
NATURE/PURPOSE OF COST ACCOUNTINQ
rt '1.• it is helpful and provide the guidelines in the following ways?
PLANNING Controlling 1 K corn/9 roupsicss. pcs O Evaluation of alternatives
Internal Reporting
External Reporting
c• Pricing of 'products and projects,
•• Analysis of Financial Statements

KINDS OF COST

OCONTROLLABLE COST Depreciation of plant, accidental losses, insurances, taxes;
cal salaries etc.


Standard Cost: tt is the predetermined cost manufacturing a single unit or a specific Quantity of Goods. It has components, a physical standard (i.e., standard quantity of inputs unit of output) and a price standard (i e rate per unit of output)
Fixed Cost: Cost which is not change with the char) of Production activity, e.g Rent of Factory Building

Variabre Cost: which change according to the change if activity level, e.g. a Material and D.Labour cost of the product.
Semi-variable Cost: composed of both fixed and veria cost of production eg. Cost of electricity consumed in the factory. i) Cost for lighting and air conditioning purpose is fixed ii) Electricity consumed for driving the machines is the Component which thange with the activity level of on
CONTROLLABLE COST

Which may control by the manager with some planning
Capacity level

It means ability to produce up to a specific level and it is also nown activity level or volume for capacity. Theoretical Capacity
It is a maximum capacity level that could be attained if there were 100% Utilization of time and resources. This level can never be achieved because of unavoidable interruptions e.g. Sunday holidays, repairs, maintenance, break down of machines and break down of electricity etc.
asgawrositi It is the maximum activity level that can be attained under effective working condition. (Theoretical capacity level —unavoidable losses.) Canatity It is the level which is expected to be attained during the
%Ian
c al year for which the budget is being prepared. It is heavily ePendent on the market demand for the products. It may be equal to activity, e.g for a production, cost of D. material and a Labour cost less then the practical capacity. Term Annual Budget volume and control with some strict control over the activity? Master Volume are also used to denote expected Actual Capacity. 32..
level is to smooth out the effects of seasonal, cyclical and tier, number of year. The object of computing such and average active! Normal Capacity is the average of expected Actual Capacity over ? lAilatapgries r Electricity Normal Capacity A Maintenance & repair of tools for general shop use variations. ? Gas
All manufacturing Costs other then the Direct Material ar, Direct Labour costs are collectively termed as Factory Overhead cost is also known as manufacturing overheads, indirect material, indir labour, power, lights, depreciation charges, repairs, cleaning 2
maintenance charges. etc. Some examples of FOH is given below, JELEMENTS OF VARIABLE OVERHEADS Pay & allowances and over time (officers/staff employed in Production shop).. ? General shop tabour ;S FPSC PCS
Over Time / Piece Work
Wages Under / Over Allocation. . Shop store (consumable)
1
?
? ? Tn.
Steam Compressed air high pressure Water
ELEMENT'S OF FIXED OVERHEADS A Pay & Allowances (officers & staff of non production shops/ manager & above) ? Pay & Allowances (officers & staff of services at factory level TPT, telephone & yard etc. Admin expenses at factory level Group insurance ) Misc. Charges Assistance package Store adjustment/ loss

KINDS OF
A
oRY OVERHEADS
jt11109J-----.Blaret at It is a kind of rate which is calculated for the factory over head expenses of entire Factory.

? TA / 'DA . Shop Store Other than consurnabte items) ? Maintenance of Building A Maintenance I repair of Plant 8, Machinery. ? Maintenance & repair of TPT., Rail & Road " Repair of Furniture
shoo/ DepartmentalRate: This type of rate may be calculated for all the shops the factory separately through which the product pass.
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DEPRECIATION
Value of an asset gradually reduces on account of use.,, Such reduction in value is known as depreciation. or we can say that depreciation is the gradual and permanent decrease in the value of fixed as from any cause, Kinds of a reeiation
1) Depreciation: This term is used with reference to tangible fixed assets for their reduction in value, 2) Depletion: The depletion 'is used for the depreciation of wasting assets such as mines, oil well, timber trees etc. 3) Amortization: The term amortization is used in respect of intangible assets like patents, copyright, leasehold and good will which are recorded at cost.
MATHODS OF DEPRECIATION There are following methods of depreciation. a. Straight line method: under this method the expected life of an asset is first calculated, in years, After this scrap value deducted from the cost of the asset then net value divided on the useful life of the asset. In this way a fixed amount calculated which is charged every year from the

37
value of an asset. Depreciation of copy right, patent and short lease etc. Egrmic r oo ---- Machines w W lue cra value Depreciation = C Estimated life of Machinery
b. D bin et •d educin down value methods Under this method the asset is depredated at fixed percentage calculated on the debit balance of the asset which is diminished year after year on account d depreciation. Depreciation or machinery and plant etc.
inethodbwr' en
C. Annuity method According to this method the cost of the asset and interest are written down annually by equal installments until the book value of the asset in question is reduced to nil or its breakup value at the end of its effective life These charges made by way of depreciation out of annuih tables. This is applicable on long leases assets.
d. Depreciation fund S'nki F rid Amortization method, Under this method a fund known as depreciation Fund is created and an amount is added at this accommodated fund until the life of the asset. It is suitable whenever it is desired not only to charge depreciatioOn but also to replace the asset as happens in case of plant and machinery and other wasting assets.
e Insurance policy system. Under this method the amount represented by the depreciation fund, instead of being used to buy securities is paid to an insurance company as premium. The insurance company issues a policy promising to pay a lump sum at the end of the working life of the asset for its replacement.
JOURNAL LADGER & CASH BOOK


The word journal has been derived from the French word "leer. Jour mews day. SD journal mean daffy. Transactions are recorded day in Journal and hencet has been named so. ft is a book of original entry to record chronologically, means date kfo recordings are made on daily biases. It is also called Day Book, as per the morel d entries.
Important Features of journal Entries. Journal is the first successful step of the Double Entry system. A transaction is recorded first of all in the journal. So, journal is called bcd of original entry. A transaction is recorded on the same day it takes place. so, journal is •;.s. called Day Book. Transactions are recorded chronotogicalty. So, journal is co Chronological Buck. e• For each transaction the names of the two concerned accounts Indic& which is debited and which is credited, are clearly written in consecutive lines. This makes ledger-posting easy. That is why journal called "Assistant to ledger or "Subsidiary Beak". 0 Narration is written below each entry.
i• The amount is mitten in the last two columns----debut amount in Debit Column and credit amount in Credit Column.
Example of Journal Ilan 15,2012 Mr. Malik Zama n started Business with*cash Ps. 1500,000- J Ian 21,2012. Purchase Building for Cash Rs. 12,00,000/-
tuL jna
Date

Particulars

L.F. Debit Rs.
Rio
2012

Cash Account Capital Account Started business with cash Building Account Cash Account Purchase &Min on cash
LEDGER ACCOUNTS When all the transactions for a given period have been journalized, next step is to classify them according to the accounts affected. For exaho all transactions relating to cash must be put in one place. Similarly, transactions with a customer or a supplier must also be assembled at cf place. The book in which this classification is dose is called the Ledger.
Recording of data from original book of entry/journal to ledger is kno,, as posting of data.
FEATURES OF LEDGER BOOK It has two identical sides --Left side is Debit side and Right side is called Credit side. 4. Debit aspect of all the concerned transaction is recorded on Dett side, while credit aspect on Credit side according to date: ' 4. Difference of the totals of the two sides represents balance. The excess of Debit side over Credit side indicates debit balance and vice versa. 4- Usually balance is drawn at the end of the year and recorded on deficit side to make the two sides equal. This balance is known as closing balance. The closing balance of the current year will b the opening balance of the next year.
kY
1 Separate account Is opened for each item of assets, liabilities, expense and revenue. In this way relevant dosing balance is transferred to Trial Balance accordingly. -1 Complete and reliable information is available in respect of each and every account,


EXAMPLE OF POSTING FROM JOURNAL 70 LEDGER ACCOUNTS
Jan 15,2012 _Mr. Malik Zaman started Business with cash Rs. 15,00,000/-1' Jan 21, 2012- Purchase Building for Cash Rs. 12,00,000J-
Journal
Date 2:112 An-15 Jan-21
Particulars LF. Debit Credit Rs. Rs. 15,00,000
Cash Account
Capital Account
Started business with cash

Building Account Cash Account
Purchase Building on cash
Na A3 cw
15,00,000
12,00,000
12,00,000
aumwres+1101111• ???•••?•?•?•
LEDGER ACCOUNTS (POSTING OF DATA FROM JOURNAL TO lEDGER1
Cast Atcounts
Bui!ding Accounts
Pate
Particular
J.F.
Amount Rs.
Date
PartioAr
Amount
Rs.

Par6cular I T. Amount Date Partpular
Os.
ban-15
2012 Capital a/c 13,04,000 tan-21 eui`dinga/c Jan-31 Balance a/c B/F
J.F. Amour!


12,00000
3,00,000
15,00,000 Total

15,00,000

Date
Particular 11.
Capital AccountE
Amount Date
Particular 11. Ains41

/vial Total
12,00,000
Total
12,00,000
TRIAL BALANCE

Having posted all the transactions into the ledger, it is necessary to heck the correctness of the work done before proceeding further. In order to test the arithmetical accuracy of our ledger we should prepare a
statement called the Trial Balance.
As.

fan•3I
lan,31
—1r es r—s. s A trial Badance is a statement prepared by taking out the debit and
15,00,000 Jan-21 credit balances of all accounts appearing in the ledger.
Group: 0301351545Q

Example of Trial Balance
Note: please carry on the above stated exa
Ledger Accounts
Cash Accounts Capital Accounts Building Accounts
Total
L.F Dr. Balance
Cr. Balance

CASH BOOK
The cash book is the book of original entry in which transactions relating only to cash receipts and payments are recorded in detail. When the cash is received it is entered on the debit or left side and similarly cash is paid out the same is recorded on the credit or the right hand side of the cash book.
The cash book is balanced at the end of a given period by inserting the excess of the debit on the credit side as "By balance carried down" to make both sides agree. The balance is then shown on the debit by "to balance brought down" to start the next period.
Kinds of Cash Book The following are the three forms of Cash Books met with in practice: ? Simple or Single Column Cash Book
loin.• CSS r 0 ere joint yt uu. WatsAi3p

Or. (Receipt Side)
Dale Particular

Amount at Rs.

Cr. (Payment Side)
Particular L.F. Amount Rs.
bo

ble Column Cash Book
Cr. (payment Side)
Panicular
V.Mo
i.r.
vnG
A,,,ount BS.
Triple Columri Ca sh Book
Dr. (Receipt Side)
Cr. (Payment Side)
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PUBLI_...________._ PROCU ._____„,..__, C PFA4ENT RULES,2004 te 111 contract exeNbon to the detriment of the misrepresentation agencies; or epresentation of facts in order to Influence a procurement process of the execution of a contract, collusive practices among bidders (prior Islamabad, June 9, 2005 to or after bid submission) designed to establish bid prices at artificial, non-competitive levels and to deprive the procuring agencies of the NOTIFICATION benefits of free and open competition and any request for, or S.R.O. 432(1)/2004.- In exercise of the powers conferred by section 26 of the Public Procurement Regulatory Authority Ordinance, 2002 (Xicn solicitation of anything of value by any public official in the course of of 2002), the Federal Government is pleased to make the following the exercise of his duty; rules, namely:- (g) "emergenc-y" means natural calamities, disasters, accidents, war and operational emergency which may give rise to abnormal situation (milting prompt and immediate action to limit or avoid damage to person, property or the environment; (h)"lowest evaluated bid"means,- 0) a bid most closely conforming to evaluation criteria and other conditions specified in the bidding document; and (ii) having lowest evaluated cost; 2. Definitions.- 0) 'Ordinance" means the Public Procurement Regulatory Authority (1) In these rules, unless there is anything repugnant in the subject cr Ordinance, 2002 (XXII of 2002); con text,- (1) "Repeat orders" means procurement of the same commodity from (a) "bid" means a tender, or an offer, in response to an invitation, bye . the same source without competition and includes enhancement of person, consultant, firm, company or an organization expressing hiss contracts; "Sup;plier" means a person, consultant, firm, company or an its willingness to undertake a specified task at a price; r aganization who undertakes to supply goods, services or works; and (b) 'Bidder" means a person who submits a bid; procedure leading to the aNard 0 (i)"value for money" means best returns for each rupee spent in (C) "competitive bidding" means a reliability, after sales service, up grade a contract whereby all the interested persons, firms, companies ci t8trns 0 cluahty, tirne.liness‘ the contract and includes both natiod it price, source, and the combination of whole life cost and quality organizations may bid for l)frieet the procuring agency's requirements. competitive bidding and international competitive bidding; •(2) The expressions used but not defined in these rules shall have the organization who undertakes to suPPIY goods, services or works; 1 (d) "Contractor" means a person, consultant, firm, company or al ;-1 site meanings as are assigned to them in the Ordinance. (e) "Contract" means an agreement enforceable by law; practices" includes the offering, 04 (0 "corrupt and fraudulent of anything of value to influence the action ofi receiving, or soliciting supplieror contractor in the procurement procei public official or the su co S .2serm.....—_ _
1. Short title and commencement...- (I) These rules may be called the Public Procurement Rules, 2004, (2) They shall come into force at once. GEN FRAL PROVISIONS
3. Scope and applicability.• Save as otherwise provided, these rules shall apply to all procurernerat made by all procuring agencies of the federal Government whethe within or outside Pakistan. 4. PrintIples of procurements.- Procuring agencies, while engagirc in procurements, shall ensure that the procurements are conducted int lair and transparent manner, the object of procurement brings value ir money to the agency and the procurement process is efficient ze economical.
Issued within thirty days of the expiry of the said period enabling the supplier or contractor to submit the final • Except for unsettled darns, which shall be resolved through arbitration, the bill shall be paid ethic the time given in the conditions of contract, which shall not exceed sixty days to close the contract for final audit.

5. International and inter-govemmental commitments of ttg Federal Government- Whenever these rules are in conflict with 4, obligation or commitment of the Federal Government arising out of ' international treaty or an agreement with a State or States, or international financial institution the provisions of such internal treaty or agreement shall prevail to the extent of such conflict.
6. Language.-(1) Ali communications and documentation related to procurement3 the Federal Government shall either be in Urdu or English or bdi Except where a procuring agency is situated outside the territories Pakistan and procurements are to be made locally, the procu agency may use the local language in addition to Urdu or English. (2) Where the use of local language is found essential, the or documentation shall be in Urdu or English, which shall be retained record; for all other purposes their translations in local language be used: Provided that such use of local language ensures maximum and efficiency in the procurement. (3) In case of the dispute reference shall be made to the documentation retained on record.


7. Integrity pact.- Procurements exceeding the prescribed limit S be subject to an integrity pact, as specified by regulation with apPl• of the Federal Government, between the procuring agency an6 suppliers or conth,ctors.
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PROCUREMENT P WANING
. Procurement planning.-Within one year of commencement of these rules, all procuring agencies shall devise a mechanism, for planning in detail for all proposed procurements with the object of realistically determining the requirements of the procuring agency, within Its available resources, delivery time or completion date and benefits that are likely to accrue to the procuring agency in future. . Limitation on splitting or regrouping of proposed procurement.-Save as otherwise provided and subject to the regulation made by the Authority, with the prior approval of the Federal Government, a procuring agency shall announce in an appropriate manner all proposed procurements for each financial year and shall proceed accordingly without any splitting or regrouping of the procurements so planner, The annual requirements thus determined would be advertised in advance on the Authority's website as well as on the website of tit procuring agency in case the procuring agency has its own website. Specifications,-Specifications shall allow the widest possible competition and std not favour any single contractor or supplier nor put others at d. disadvantage. Specifications shall be generic and shall not indite references to brand names, model numbers, catalogue numbers q, similar classifications. However if the procuring agency is conviixd that the use of or a reference to a brand name or a catalogue numte rt is essential to comp lete an otherwise incomplete specification, slid) with the words or equivalent".
or reference shall be qualified wit
1 ,Approval mechanism.- ties shall provide clear authorization
PROCUREMENT ADVERTISEMENTS • Methods of advertisement.-(1) Procurements over one hundred thousand rupees and up to the limit of two million rupees shall be advertised on the Authority's website in the manner and format specified by regulation by the .Authority from time to time. These procurement opportunities may also be advertised in print media, if deemed necessary by the procuring agency: Provided that the lower financial limit For advertisement on AtrthOnItY's website for open competitive bidding shall be the prescribed financial limit for request for quotations under clause (b) of rule 42; and (2) All procurement opportunities over two million rupees should be advertised on the Authority's website as well as in other print media or rewspapers having wide circulation. The advertisement in the newspapers shall principally appear in at least two national dailies, one in English and the other in Urdu. (3) in Cases where the procuring agency has its own website it may also post all advertisements concerning procurement on that website as el. (4) A procuring agency utilizing electronic media shall ensure that the hformat;on posted on the website is complete for the purposes for lifliCh it has been posted, and such information shall remain available a)that website until the closing date for the submission of bids. Response time.-(1) The procuring agency may decide the response time for receipt of ads or proposals (including proposals for pre-qualification) from the e of publication of an advertisement or notice, keeping in view the edviduar procurement's complexity, availability and urgency. However, ir.cW no circumstances the response time shall be less than fifteen for national competitive bidding and thirty days for international orripetitive bidding from the date of pubficati ii)!ix, d
delegation of Powers once a" only initiate procurements All procuring safgoer different categories of procurement and iNts•ig date: • , allowing sufficient time to complete and submit the bid by date a vertisernent or isements or notices shall expressly mention the approval of the competent aurhol, ,,4rnation for ll • time allowed for that particular procurement along with the collection of bid documents which shall be issu • concerned has been accorded. that • • ed till a
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no time limit shall be applicable in case ofsir
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(2) The response time shall be calculated from the date of first publication of the advertisement in a newspaper or posting on the web site, as the case May be, (3) In situations where publication of such advertisements or notices has occurred in both electronic and print media, the response time shall be calculated from the day of its first publication in the newspapers.
. Exceptions.- It shall be mandatory for all procuring agencies to advertise all procurement requirements exceeding prescribed financial lime which is applicable under sub-clause (I) of dause (b) of rule 92, However under following drcurnstances deviation from the requirement is permissible with the prior approval of the Authority,-(a) the proposed procurement is related to national security and its publication could jeopardize national security objectives; and (b) the proposed procurement advertisement or notice or publication of it, in any manner, relates to disclosure of information, which is proprietary in nature or falls within the definition of intellectual property l; which is available from a single source. J PRE-OUALIFICATION. OUALIFICATION AND DIS-• ; OUALIFICATION OF SUPPLIERS AND CONTRACTORS v . Pre-qualiffeation at suppliers and contractors , .- 1 (1) A procuring agency, prior to the floating of tenders, invitation to proposals or offers in procurement proceedings, may engage in pre -el qualification of bidders in case of services, civil works, turnkey projects . f and in case of procurement of expensive and technically complex f equipment to ensure that only technically and financial!), capable firms having adequate managerial capability are Invited to submit bide Such pre-qualification shall solely be based upon the ability of the interested parties to perform that particular work satisfactOrilY, (2) A procuring agency while engaging in pre-qualification may take into consideration the following factors, namelye (a) Relevant experience and past performance;

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(b) Capabilities with respect to personnel, equipment, and plant; (c) Financial position; (d) Appropriate managerial capability; and (e) Any other factor that a procuring agency may deem relevant, not incensistent with these rules,
pre-qualification process.-(1) The procuring agency engaging in pre-qualification shall announce, in the pre-qualification documents, all Information required for pre-Qualification including instructions for preparation and submission of the pre-qualification documents, evaluation criteria, list of documentary evidence required by suppliers or contractors to demonstrate their respective qualifications and any other information that the procuring agency deems necessary for pre-qualification, (1) The procuring agency shall provide a set of pre-qualification merits to any supplier or contractor, on request and subject to payment of price, if any. Explanation.- For the purposes of this sub-rule price means the cost of ting and providing the documents only. (3) The procuring agency shall promptly notify each supplier or contractor submitting an application to pre-qualify whether or not It has leen pre-qualified and shall make available to any person directly in the pre-qualification process, upon request, the names of all sflyeliers or contractors who have been pre-qualified. Only suppliers or erectors who have been pre-qualified shall be entitled to participate in the procurement proceedings. (4) The procuring agency shall communicate to those suppliers or rectors who have not been pre-qualified the reasons for not pre-Cua*ing them. Qualification of suppliers and contractors.- A procuring agency, at any stage of the procurement eedings, having credible reasons for or prima fade evidence of any sect In supplier's or contractor's capacities, may require the suppliers c011tractors to provide information concerning their professional, Real, financial, legal or managerial competence whether already 'qualified or not:
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ProspectWe bidders shall be provided in a timely manner and on equd opportunity basis. Where notification of such change, addition, modIfitation or deletion becomes essential, such notification shall be made in a manner similar to the original advertisement. (4) Procuring agencies shall use standard bidding documents as and when notified by regulation by the Authority: Provided that bidding documents already in use of procuring agencies may be retained in their respective usage to the extent they are rel inconsistent with these rules and till such time that the standar:, bidding documents are specified by regulations. (5) The procuring agency shall provide a set of bidding documents to any supplier or contractor, on request and subject to payment of price, if any Explanation. • For the purpose of this sub-rule price means the cost printing and providing the documents only. . Reservations and preference: (1) Procuring agencies shall allow all prospective bidders to participae in procuring procedure without regard to nationality, except in cases which any procuring agency decides to limit such participation t national bidders only or prohibit participation of bidders of sort nationalities, in accordance with the policy of Federal Government. (2) Procuring agencies shall allow for a preference to domestic e national suppliers or contractors in accordance with the policies of th Federal Government. The magnitude of price preference to be accords shall be clearly mentioned in the bidding documents under the • evaluation criteria.
Bid security.-The procuring agency may require the bidders to furnish a security not exceeding five per cent of the bid price.
Bid validity.-(1) A procuring agency, keeping in view the nature of the procurers shah subject the bid to a bid validity period.
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(2) Bids shall be valid for the period of time specified in the bidding document, (3) The procuring agency shall ordinarily be under an obligation to process and evaluate the bid within the stipulated bid validity period. However under exceptional circumstances and for reason to be recorded in writing, if an extension is considered necessary, all those who have submitted their bids shall be asked to extend their respective bid validity period. Such extension shall be for not more than the period equal to the period of the original bid validity. (4) Bidders who,-(a) Agree to extension of their bid validity period shall also extend the vaidity of the bid bond or security for the extended period of the bid validity; (b) Agree to the procuring agency's request for extension of bid validity period shall not be permitted to change the substance of their bids; and (c) Do not agree to an extension of the bid validity period shall be allowed to withdraw their bids without forfeiture of their bid bonds or securities.
Extension of time for submission of bids.• there a procuring agency has already prescribed a deadline for the submission of bids and due to any reason the procuring agency finds it recessary to extend such deadline, it shall do so only after recording its reasons in writing and in an equal opportunity manner. Advertisement of such extension in time shall be done in a manner similar to the criginal advertisement.

OPENING, EVALUATION AND REJECTION OF BIDS peening of bids.-{{) The date for opening of bids and the last date for the submission of *s shall be the same. Bids shall be opened at the time specified in the !ter documents. The bids shall be opened at least thirty minutes !ter the deadline for submission of bids. (J)All bids shall be opened publicly in the presence of the bidders or heir representatives who may choose to be present, at the time and ()Lace announced prior to the bidding. The procuring agency shall read gi ss
aloud the unit price as well as the bid amount and shall record the minutes of the bid opening. All bidders in attendance shall sign an attendance sheet. All bids submitted after the time prescribed shall be rejected and returned without being opened. Evaluation criteria.- P rocuring agencies shall formulate an appropriate evaluation criterion listing all the relevant information against which a bid is to be evaluated. Such evaluation criteria shall form an integral part of the bidding documents. Failure to provide for an unambiguous evaluation criteria in the bidding documents shall amount to mis-procurement.
. Evaluation of bids.-(1) All bids shall be evaluated in accordance with the evaluation criteria and other terms and conditions set forth in the prescribed bidding documents. Save as provided for in sub-clause (iv) of clause (c) of rule 36 no evaluation criteria shall be used for evaluation of bids that had not been specified in the bidding documents. (2) For the purposes of comparison of bids quoted in different currencies, the price shall be converted into a single currency specified in the bidding documents. The rate of exchange shall be the selling rate, prevailing on the date of opening of bids specified in the bidding 1 documents, as notified by the State sank of Pakistan on that day. !(3) A bid once opened in accordance with the prescribed procedure !shall be subject to only those rules, regulations and policies that are in force at the time of issue of notice for invitation of bids. Clarification of bids.-j(d) No bidder shall be allowed to alter or modify his bid after the bids rave been opened. However the procuring agency may seek and zic-cept clarifications to the bid that do not change the substance of the id. 2) Any request for clarification in the bid, made by the procuring gency shall invariably be in writing. The response to such request shafi Iso be in writing. . iiii I ii.a./...ii .cier %.0 1 Na. ,uo
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Discriminatory and difficult conditions.-Save as otherwise provided, no procuring agency shall introduce xly condition, which discriminates between bidders or that is considered to be met with difficulty. In ascertaining the discriminatory br difficult nature of any condition reference shall be made to the ordinary practices of that trade, manufacturing, construction business or service to which that particular procurement is related.

• Rejection of bids.- (I) The procuring agency may reject all bids or proposals at any time prior to the acceptance of a bid or proposal. The procuring agency shall upon request communicate to any supplier or contractor who submitted a bid or proposal, the grounds for its rejection of all bids or proposals, but is not required to justify those grounds. (2) The procuring agency shall incur no liability, solely by virtue of its invoking sub-rule (1) towards suppliers or contractors who have submitted bids or proposals. (3) Notice of the rejection of all bids or proposals shall be given promptly to all suppliers or contractors that submitted bids or proposals.
Re bidding,-(I) tf the procuring call for a re-bidding. (2) The procuring agency before invitation for re-bidding shall assess the reasons for rejection and may revise specifications, evaluation criteria or any other condition for bidders as it may deem necessary.
agency has rejected all bids under rule 33 it may
.Announcement of evaluation reports,-Procuring agencies shall announce the results of bid evaluation in the form of a report giving justification for acceptance or rejection of kis at least ten days prior to the award of procurement contract.
)135154,.
•. Procedures of open competitive bidding.- . Save as otherwise provided in these . rules the forty/ill procedures shall be permissible for open competitive bidding, namely; . (a) Single stage — one envelope procedure.- Each tad shall comprise one single envelope containing, separatel financial proposal and technical proposal (if any). All bids received shal be opened and evaluated in the manner prescribed in the bidding document. (b) Single stage - two envelope procedure.- (i) The bid shall comprise a procuring agency; . single package containing two separate envelopes. Each envelope alai Oa The procuring agency may revise, delete, modify or add any aspect contain separately the financial proposal and the technical proposal; of the technical requirements or evaluation criteria, or it may add new (ii) The envelopes shall be marked as "FINANCIAL PROPOSAL" ard requirements or criteria not inconsistent with these rules: "TECHNICAL PROPOSAL" in bold and legible letters to avoid confusion; provided that such revisions, deletions, modifications or additions are (iii) Initially, only the envelope marked "TECHNICAL PROPOSAL" dal! communicated to all the bidders equally at the time of Invitation to be opened; submit final bids, and that sufficient time is allowed to the bidders to (Iv) The envelope marked as "FINANCIAL PROPOSAL" shall be retained prep in the custody of the procuring agency without being opened; prepare revised further thatbiatsdusc: such allowance of time shall not be less than (v) The procuring agency shall evaluate the technical proposal in a fifteen days in the case of national competitive bidding and thirty days manner prescribed in advance, without reference to the price and rejed any proposal which does not conform to the specified requirements; (v) Those casesebdiddinetresmnaotiot nivaililing to conform their respective bids to the (vi) During the technical evaluation no amendments .in the technical procuring agencies technical requirements may be allowed to proposal shall be permitted; • withdraw from the bidding without forfeiture of their bid security; (vii) The financial proposals of bids shall be opened publicly at a tang Scond date and venue announced and communicated to the .bidders to .,,6; The stage bidders, whose technical proposals or bids have not been advance; rejected and who are waling to conform their bids to the revised (viii) After the evaluation and approval Of the technical proposal ft technical requirements of the procuring agency, shall be invited to procuring agency, shall at a time within the bid validity period, submit a revised technical proposal along with the financial open the financial proposals of the technically accepted bids only. The proposal; financial proposal of bids found technically non-responsive shad be (vii) The revised technical proposal and the financial proposal shall be returned on-opened to the respective bidders; and opened at a time, date and venue announced and communicated (ix) The bid found to be the lowest evaluated bid shall be accepted. to the bidders in advance; and (r) Two stage bidding procedure.- (viii) The revised technical proposal and the financial proposal shall be evaluated in the manner prescribed above. The bid found to be the lowest evaluated bid shall be accepted:
first stage • (i) The bidders shall first submit, according to the required specifications, a technical proposal without price; (it) The technical proposal shall be evaluated in accordance with the specified evaluation criteria and may be discussed with the bidders regarding any deficiencies and unsatisfactory technical features; (iii) Alter such discussions, all the bidders shall be permitted to revise their respective technical proposals to meet the requirements of the
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Provided that in setting the date for the submission of the revised technical proposal and financial proposal a procuring agency shall allow sufficient time to the bidders to incorporate the agreed upon changes in the technical proposal and prepare their financial proposals accordingly. (d) Two stage - two envelope bidding procedure-', First stage . (i) The bid shall comprise a single package containing two separate I, envelopes. Each envelope shall contain separately the financial , proposal and the technical proposal; 1 (ii) The envelopes shall be marked as "FINANCIAL PROPOSAL" and "TECHNICAL PROPOSAL" in bold and legible letters to avoid confusion; (iii) Initially, only the envelope marked "TECHNICAL PROPOSAL' shall be opened; (iv) The envelope marked as "FINANCIAL PROPOSAL" shall be retained in the custody of the procuring agency without being opened; (v) The technical proposal shall be discussed with the bidders with reference to the procuring agency's technical requirements; (vi) Those bidders willing to meet the requirements of the procuring agency shall be allowed to revise their technical proposals following these discussions; (vii) Bidders not willing to conform their technical proposal to the revised requirements of the procuring agency shall be allowed to withdraw their respective bids without forfeiture of their bid security; e- re .e. re, r-- e-- re e-- r.". 1 Second stage (viii) after agreement between the procuring agency and the bidders on the technical requirements, bidders who are willing to conform to the revised technical specifications end whose bids have not already been rejected shall submit a revised technical proposal and supplementary financial proposal, according to the technical requirement; ._, Jp: https://vvww WhatsApp Group.: 46
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(ix) The revised technical proposal along with the original financial proposal and supplementary financial proposal shall be opened at a date, time and venue announced in advance by the procuring agency: Provided that in setting the date for the submission of the revised technical proposal and supplementary price proposal a procuring agency shall allow sufficient time to the bidders to incorporate the agreed upon changes in the technical proposal and to prepare the required supplementary financial proposal; and (x) The procuring agency shall evaluate the whole proposal in accordance with the evaluation criteria and the bid found to be the lowest evaluated bid shall be accepted:
. Conditions for use of single stage two envelope, two stage and two stage two envelope bidding procedures.-Single stage one envelope bidding procedure shall ordinarily be the main open competitive bidding procedure used for most of the procurement. Other appropriate procedures of open competitive bidding shall be selected in the following circumstances, namely:-(a) single stage two envelope bidding procedure shall be used where the bids are to be evaluated on technical and financial grounds and price is taken into account after technical evaluation; (0) two stage bidding procedure shall be adopted in large and complex contracts where technically unequal proposals are likely to be encountered or where the procuring agency is aware of its options in the market but, for a given set of performance requirements, there are two or more equally acceptable technical solutions available to the procuring agency; and (c) two stage two envelope bidding method shall be used for procurement where alternative technical proposals are possible, such as certain type of machinery or equipment or manufacturing plant
)OOk 351545t)
ACCEPTANCE OF BIDS AND AWARD OF PROCUREMENT CONTRACTS Acceptance of bids.-The bidder with the lowest evaluated bid, if not in conflict with any other law, rules, regulations or policy of the Federal Government, Shall be awarded the procurement contract, within the original Or extended period of bid
Performance guarantee.
Where needed and dearly expressed in the bidding documents, the procuring agency shall require the successful bidder to furnish a performance guarantee which shall not exceed ten per cent of the 1. contract amount. -'
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Limitation on negotiations.- Save as otherwise provided there shall be no negotiations with the bidder having submitted the lowest evaluated bid or with any other bidder: Provided that the extent of negotiation permissible shall be subject to the regulations issued by the Authority,
Confidentiality.- The procuring agency shall keep all information regarding the bid evaluation confidential until the time of the announcement of the evaluation report in accordance with the requirements of rule 35.
Alternative methods of p rocurements.- A procuring agency may utilize the following alternative methods of procurement of goods, services and works, namely:-(a) Petty purchases.-Procuring agencies may provide for petty purchases where the object of the procurement is below the tumid limit of twenty five thousand rupees. Such procurement shall be exempt from the requirements of bidding or quotation of prices:
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Provided that the procuring agencies shall ensure th procurement of petty purchases is in conformity with the principles procurement prescribed in rule 4: Provided further that procuring agencies convinced of th inadequacy of the financial limit prescribed for petty purchases i undertaking their respective operations may approach the Federa Government for enhancement of the same with full and prope justifications. En
(b) ReAquperstocfuriornoguoatgeatniocy stall quotations,- only if the following conditiongsaexgeistin, nthaimsemlye of procurement namely:-
• (i) The cost of object of procurement is below the prescribed limit of one hundred thousand rupees: Provided that the respective Boards of Autonomous bodies are authorized to fix an appropriate limit for request for quotations method of procurement subject to a maximum of rupees five hundred thousand which will become financial limit under this sub-rule:
(ii) The object of the procurement has standard specifications;
(iii) Minimum of three quotations have been obtained; and
(iv) The object of the procurement is purchased from the supplier offering protvhiededlowtehsattp ircoecu: ring agencies convinced of the inadequacy of the financial limit prescribed for request for quotations in undertaking their respective operations may approach the Federal Government for enhancement of the same with full and proper justifications;
(c) direct contracting.-
A procuring agency shall only engage in direct contracting if the following conditions exist, namely:-{) The procurement concerns the acquisition of spare parts or supplementary services from original manufacturer or supplier: Provided that the same are not available from alternative sources;
(ii) Only one manufacturer or supplier exists for the required procurement J13b154bt.-
Provided that the procuring agencies shall specify the appropriate \ forum, vvViich may authorize procurement of proprietary object after due diligence; and , (iii) Where a change of supplier would oblige the procuring agency to acquire material having different technical specifications or characteristics and would result in incompatibility or disproportionate technical difficulties in operation and maintenance: Provided that the contract or