1. WHAT IS STATUTORY AUDIT? answer :Statutory audit is done by chartered Accountants to !eri"y the "inancia# state$ent%s "airness and it is done annua##y. It ensures that to the best &now#ed'e o" the auditors "inancia# state$ents are "ree "ro$ any $isre(resentations and "rauds. 2. WHAT IS INTERNAL AUDIT ANSWER An inspection and verification of the financial records of a compan or firm ! a mem!er of its o"n staff to determine the acc#rac and accepta!ilit of its acco#ntin$ practices. %. WHAT IS E&TERNAL AUDIT ' ANSWER(a periodic e)amination of the !oo*s of acco#nt and records of an entit cond#cted ! an independent third part +an a#ditor, to ens#re that the have !een properl maintained- are acc#rate and compl "ith esta!lished concepts- principlesand acco#ntin$ standards- and $ive a tr#e and fair vie" of the financial state of the entit . .. E)plain The Difference /et"een Internal A#dit And E)ternal A#dit' ANSWER ( The internal a#dit is cond#cted to help the mana$ement. The "ea*ness of the mana$ement is disclosed. The e)ternal a#dit is cond#cted to help the shareholder. The ri$hts of o"ners are protected. The appointment of internal a#dit is made ! the mana$ement. The appointment in e)ternal a#dit is made ! the shareholders. Internal a#dit is the part of internal control. E)ternal a#dit is the not the part of internal control.The internal a#dit can s#$$est improvement in internal chec* s stem. The e)ternal a#dit can not s#$$est improvement in internal chec* s stem. The internal a#dit can perform his d#ties #nder the terms of appointment. The mana$ement can limit the scope of "or* at an time. The e)ternal a#ditor can perform his "or* to terms of appointment and other prescri!ed la". The scope is ver "ide. Internal a#dit is an emplo ee of the compan . He is not an independent person. E)ternal a#ditor is not an emplo ee of the compan . 0( What do o# mean ! vo#chin$' Ans"er ( 1o#chin$ is the process of chec*in$ the a#thentication of the vo#cher maintain ! the mana$ement "ith the respective s#pportin$ doc#ment 0 ( Definition of a#dit ' Ans"er ( An e)amination and verification of a compan 2s financial and acco#ntin$ records and s#pportin$ doc#ments ! a professional- s#ch as a 3ertified 4#!lic Acco#ntant. 0 ( What are 5!6ectives 5f Internal A#dit' Ans"er ( The p#rpose of internal a#dit is to *eep proper control over !#siness
activities. When there is proper control there is ma)im#m efficienc . The internal a#ditor determines the de$rees of control over "or*. The p#rpose of internal a#dit is to eval#ate the acco#ntin$ s stem. It is concerned "ith chec*in$ proper a#thorit for transactions li*e p#rchase- retirement and disposal of fi)ed assets. The vo#chers can !e compared "ith entries in order to determine that fi$#res are facts. The p#rpose of internal a#dit is to help the mana$ement. Internal a#ditor can point o#t the "ea*ness. The internal a#dit can !e #sed as a tool to correct the sit#ation. The mana$ement f#nctions can !e performed properl . The p#rpose of internal a#dit is to revie" the "or*in$ of !#siness. The "or*in$ of c#rrent tear can !e revie"ed in detail 6#st to note the s#ccessf#l area of "or*in$. There is a need to locate the "ea* points. The corrective meas#res can !e ta*en for proper "or*in$. 0 ( E)plain the difference !et"een internal a#dit and stat#tor a#dit' Ans"er ( An internal a#dit is one "hich is cond#cted ! the internal a#ditors of the compan . It is not mandator for the compan and the compan 6#st cond#cts it to *eep a chec* on the operations of the compan . 5n the other hand stat#tor a#dit is ver important !eca#se it is ! the e)ternal a#ditors and it is mandator for all *inds of companies. Stat#tor a#dit is #s#all cond#cted for vario#s p#rposes li*e ta) re$#lator re7#ires it for ta)ation p#rposes. 0 ( What is an a#dit process' Ans"er ( The "ord 2A#dit2 is a derivative of the "ord 2A#dition2 "hich means 2to hear2. In earlier times- the 8in$s #sed to hear their acco#ntants narrate the acco#nts ver!all . Ho"ever- as the comple)it of the acco#ntin$ f#nction $re"- need "as felt to thoro#$hl chec* the acco#nts for mista*es misclassification and doc#ment the findin$s in a "ritten form so that it can !e #sed ! the 9ana$ement- sta*eholdersinvestors- :overnment and vario#s other !odies. This process is *no"n as A#ditin$ or A#dit. 0 (;#nctions of a#dit' Ans"er ( The f#nction of internal a#dit is concerned "ith anal sis of internal chec*. The internal a#dit can loo* into the d#ties of each emplo ee. All emplo ees are provided 6o!s on the !asis of their a!ilities. The a#ditor can test the effectiveness of internal chec*. Thef#nction of internal a#dit is e)aminin$ the application of le$al re7#irements. The acco#nts are prepared #nder certain le$al frame "or*. 1erification of acc#rac is a f#nction of internal a#dit. The acc#rac of acco#ntin$ !oo*s and records can !e verified "ith the help a#ditin$ techni7#es. The a#dit techni7#es incl#de inspectiono!servation- in7#ir - confirmation- comp#tation and revie". An a#ditor can chec* the acc#rac thro#$h these techni7#es. 0 ( What is ann#al $eneral meetin$+A:9, ' Ans"er ( A:9 the stat#tor meetin$ of the directors and shareholders of a compan
or of the mem!ers of a societ - held once ever financial ear- at "hich the ann#al report is presented 0 ( What is e)traordinar $eneral meetin$+E:9, ' Ans"er ( A meetin$ other than the ann#al $eneral meetin$ !et"een a compan 2s shareholders- e)ec#tives and an other mem!ers. An E:9 is 0 ( R#les s#rro#ndin$ the A:9 Ans"er ( 9ost private companies are not re7#ired to hold an A:9. 4#!lic limited companies +plcs, m#st hold an A:9 "ithin si) months of their financial ear end. 3ompanies can still hold an A:9 if the choose to. As "ith other meetin$s- an A:9 m#st !e arran$ed if an director as*s for one "ith d#e notice- or if < per cent of the mem!ers re7#est one. A compan ma also still need to hold one in certain circ#mstances. ;or e)ample- o# m#st hold an A:9 if o# "ant to dismiss a director or a#ditor !efore the end of their term- or if o# are a p#!lic compan "ith traded shares. If the compan does hold an A:9( = >o# m#st send "ritten notice to the directors and shareholders ?. da s in advance +2? da s in advance for p#!lic companies "ith traded shares,- #nless o#r compan articles state other"ise. An A:9 can !e held at shorter notice if @A per cent of mem!ers a$ree +@< per cent for plcs,. = >o# are no lon$er re7#ired to circ#late copies of the compan 2s acco#nts !efore an A:9. Ho"ever- the m#st !e sent to mem!ers !efore the are d#e to !e filed "ith the re$istrar of companies. = Directors and shareholders can vote on the appointment of directors and a#ditors to the compan +if re7#ired,. = 5rdinar resol#tions can no" !e passed ! a simple ma6orit and special resol#tions re7#ire at least B< per cent of those eli$i!le to vote in favo#r. = >o# m#st file at 3ompanies Ho#se an special resol#tions passed at a meetin$. #s#all called on short notice and deals "ith an #r$ent matter. 0 ( "hat is Acco#ntin$ ' Ans"er ( The information s stem that identifies -records- and comm#nicates the economic events of an or$aniCation to interested #sers 0 ( definition of cash !asis acco#ntin$' Ans"er( An acco#ntin$ method in "hich income is recorded "hen cash is received- and e)penses are recorded "hen cash is paid o#t. 0 ( Definition of Accr#al /asis acco#ntin$ ' Ans"er ( The most commonl #sed acco#ntin$ method- "hich reports income "hen earned and e)penses "hen inc#rred.
0 ( "hat is capital e)pendit#re ' Ans"er ( 9one spent to ac7#ire or #p$rade ph sical assets s#ch as !#ildin$s and machiner . also called capital spendin$ or capital e)pense. 0 ( "hat is reven#e e)pendit#re' Ans"er ( All e)penses inc#rred in r#nnin$ a !#siness s#ch as salaries- "a$es- rentli$htin$- stationar etc. are classed as reven#e e)pendit#re. /eside e)pense inc#rred in p#ttin$ the fi)ed assets in proper order ! repairs and rene"als are also reven#e e)pendit#res. 0 ( What is Asset ' Ans"er ( Assets are a compan Ds reso#rcesEthin$s the compan o"ns. E)amples of assets incl#de cash- acco#nts receiva!le- inventor - prepaid ins#rance- investmentsland- !#ildin$s- e7#ipment- and $ood"ill. ;rom the acco#ntin$ e7#ation- "e see that the amo#nt of assets m#st e7#al the com!ined amo#nt of lia!ilities pl#s o"nerDs +or stoc*holdersD, e7#it . 0 ( "hat is Lia!ilities ' Ans"er ( Lia!ilities are a compan Ds o!li$ationsEamo#nts the compan o"es. E)amples of lia!ilities incl#de notes or loans pa a!le- acco#nts pa a!le- salaries and "a$es pa a!le- interest pa a!le- and income ta)es pa a!le 0 ( "hat is 5"nerDs or stoc*holdersD e7#it ' Ans"er ( 5"nerDs or stoc*holdersD e7#it also reports the amo#nts invested into the compan ! the o"ners pl#s the c#m#lative net income of the compan that has not !een "ithdra"n or distri!#ted to the o"ners. 0 ( definition of reven#e' Ans"er ( this is the total amo#nt of mone received ! the compan for $oods sold or services provided d#rin$ a certain time period. 0 ( definition of e)pense ' Ans"er ( 4a ment of cash or cashFe7#ivalent for $oods or services- or a char$e a$ainst availa!le f#nds in settlement of an o!li$ation as evidenced ! an invoice- receiptvo#cher- or other s#ch doc#ment. 0 (What is depreciation' Ans"er (A non cash e)pense that red#ces the val#e of an asset as a res#lt of "ear and tear- a$e- or o!solescence. 9ost assets lose their val#e over time +in other "ords- the depreciate,-
0 ( What is income statement ' Ans"er ( A financial statement that presents the reven#es and e)penses and res#ltin$ net income or net loss of a compan for a specific period of time . 0 ( "hat is !alance sheet ' Ans"er ( A financial statement that s#mmariCes a compan 2s assets- lia!ilities and shareholders2 e7#it at a specific point in time. 0 ( "hat is cash co" ' Ans"er ( an !#siness vent#re - operation- or prod#ct that is a dependa!le so#rce of income or profit . 0 ( definition of ta) ' Ans"er ( A fee char$ed +GleviedG, ! a $overnment on a prod#ct- income- or activit of an or$aniCation or person . 0 ( What is direct ta) ' Ans"er ( In the $eneral sense- a direct ta) is one paid directl to the $overnment ! the persons or or$aniCation +6#ristic or nat#ral, on "hom it is imposed +often accompanied ! a ta) ret#rn filed ! the ta)pa er,. E)amples incl#de some income ta)es- some corporate ta)es- and transfer ta)es s#ch as estate +inheritance, ta) and $ift ta). 0 ( What is indirect ta) ' Ans"er ( A ta)- s#ch as a sales ta) or val#eFadded ta)- that is levied on $oods or services rather than individ#als and is #ltimatel paid ! cons#mers in the form of hi$her prices. 0 ( "hat is Ta) holida ' Ans"er ( A $overnment incentive pro$ram that offers a ta) red#ction or elimination to !#sinesses. Ta) holida s are often #sed to red#ce sales ta)es ! local $overnments- !#t the are also commonl #sed ! $overnments in developin$ co#ntries to help stim#late forei$n investment. 0 ( "hat is 1AT' Ans"er ( 1al#e Added Ta). A cons#mption ta) "hich is levied at each sta$e of prod#ction !ased on the val#e added to the prod#ct at that sta$e. 0 ( What is income ta) ' Ans"er ( a ta) levied on incomes- especiall an ann#al $overnment ta) on personal incomes.
0 ( What is internal rate of ret#rn +IRR, Ans"er ( The internal rate of ret#rn +IRR, is a rate of ret#rn #sed in capital !#d$etin$ to meas#re and compare the profita!ilit of investments. It is also called the disco#nted cash flo" rate of ret#rn +D3;R5R, or simpl the rate of ret#rn +R5R, 0 ( "hat is Net present val#e' Ans"er ( Net present val#e is an economic standard method for eval#atin$ competin$ lon$Fterm pro6ects in capital !#d$etin$ 0 ( What is fair mar*et val#e' Ans"er ( The price that an interested !#t not desperate !# er "o#ld !e "illin$ to pa and an interested !#t not desperate seller "o#ld !e "illin$ to accept on the open mar*et ass#min$ a reasona!le period of time for an a$reement to arise. 0 ( "hat is hard"are ' Ans"er ( Hard"are refers to a ph sical piece of a comp#ter. This co#ld !e a hard drive- monitor- memor chip- or 34U. The *e idea is that the item is somethin$ o# can to#ch. This compares to soft"are "hich is not tan$i!le in an "a . >o# can2t pic* it #p or "ei$h it. >et- "itho#t soft"are- hard"are is #seless. T pical e)amples of hard"are incl#de the comp#ter o#2re #sin$ to vie" this pa$e- the hard drive that has this pa$e stored on it- and the mo#se o# #sed to clic* on a lin* to !rin$ o# to this pa$e. 0( "hat is soft"are ' Ans"er ( Soft"are is a $eneral term for the vario#s *inds of pro$rams #sed to operate comp#ters and related devices.soft"are is not visi!le . 0 ( What is internet ' Ans"er ( a vast comp#ter net"or* lin*in$ smaller comp#ter net"or*s "orld"ide +#s#all preceded ! the ,. The Internet incl#des commercial- ed#cational$overnmental- and other net"or*s- all of "hich #se the same set of comm#nications protocols. 0( What is EFcommerce' Ans"er ( EFcommerce +electronic commerce or E3, is the !# in$ and sellin$ of $oods and services on the Internet- especiall the World Wide We!. In practice- this term and a ne"er term- eF!#siness- are often #sed interchan$a!l . ;or online retail sellin$- the term eFtailin$ is sometimes #sed. 0 ( "hat is EFmail'
Ans"er ( EFmail +electronic mail, is the e)chan$e of comp#terFstored messa$es ! telecomm#nication. +Some p#!lications spell it emailH "e prefer the c#rrentl more esta!lished spellin$ of eFmail., EFmail messa$es are #s#all encoded in AS3II te)t. Ho"ever- o# can also send nonFte)t files- s#ch as $raphic ima$es and so#nd files- as attachments sent in !inar streams. S59E Ela!orate ( I3A/ F Instit#te of 3hartered Acco#ntants of /an$ladesh. I39A/ F Instit#te of 3ost and 9ana$ement Acco#ntants of /an$ladesh. 3I9A F 3hartered Instit#te of 9ana$ement Acco#ntants I3DDR/ F International 3entre for Diarrhoeal Disease Research- /an$ladesh N/R F National /oard of Reven#e SE3 F Sec#rities and E)chan$e 3ommission DSE F Dha*a Stoc* E)chan$e 3SE- F 3hitta$on$ Stoc* E)chan$e ;/33I F ;ederation of /an$ladesh 3ham!ers of 3ommerce and Ind#stries :AA4 F :enerall Accepted Acco#ntin$ 4rinciples RA9 F RandomFaccess memor S59E A335UNTIN: /5DIES IAS/ F International Acco#ntin$ Standards /oard. ;AS/ F ;inancial Acco#ntin$ Standards /oard . AS/ F Acco#ntin$ Standards /oard . :AS/ F :overnmental Acco#ntin$ Standards /oard . 5THER 5R:ANIIATI5N J /5DIES I;I3 F International ;ederation of Acco#ntants AIA F Association of International Acco#ntants AAA F American Acco#ntin$ Association I3AEW F Instit#te of 3hartered Acco#ntants in En$land and "ales SA;A F So#th Asian ;ederation of Acco#ntants S59E STANDARDS J 4RIN3I4LES :AA4 F :enerall Accepted Acco#ntin$ principles /AS F /an$ladesh Acco#ntin$ Standards I;RS F International ;inancial reportin$ Standards ;AS F ;inancial Acco#ntin$ Standards +USA, ;RS F ;inancial reportin$ Standards +U*, AUDITIN: STANDARDS J /5DIES ISA F international Standards on a#ditin$ IAAS/ F International A#ditin$ and Ass#rance Standards /oard
4R5;ESSI5NAL DE:REES J 5R:ANIIATI5N 3A K chartered Acco#ntant A3A K Associate of 3hartered Acco#ntants ;3A K ;ello" of 3hartered Acco#ntants I3A/ F Instit#te of 3hartered Acco#ntants of /an$ladesh. these *inds of de$ree provid ! Instit#te of 3hartered Acco#ntants of /an$ladesh+I3A/, 34A K 3ertified 4#!lic Acco#ntant AI34A K American Instit#te of 3ertified p#!lic Acco#ntant 4R5;ESSI5NAL DE:REES J 5R:ANIIATI5N 39A K 3ertified 9ana$ement Acco#ntants A39A K Associate of 3ertified 9ana$ement Acco#ntants ;39A Kfello" of 3ertified 9ana$ement Acco#ntants 4R5;ESSI5NAL DE:REES J 5R:ANIIATI5N 39A K 3ost and 9ana$ement Acco#ntants A39A K Associate of 3ost and 9ana$ement Acco#ntants ;39A K ;ello" of 3ost and 9ana$ement Acco#ntants I39A/ K Instit#te of 3ost and 9ana$ement Acco#ntants of /an$ladesh.those *inds of de$ree provided ! Instit#te of 3ost and 9ana$ement Acco#ntants of /an$ladesh 4R5;ESSI5NAL DE:REES J 5R:ANIIATI5N 39A K 3hartered 9ana$ement Acco#ntants A39A K Associate of 3hartered 9ana$ement Acco#ntants ;39A K ;ello" of 3hartered 9ana$ement Acco#ntants 3I9A K 3hartered instit#te 9ana$ement Acco#ntants. those de$ree provided ! 3hartered instit#te 9ana$ement Acco#ntants 4R5;ESSI5NAL DE:REES J 5R:ANIIATI5N 3AT K 3ertified Acco#ntin$ Technician A33A K Associate of chartered 3ertified Acco#ntants ;33A K fello" of chartered 3ertified Acco#ntants A33A K Association of chartered 3ertified Acco#ntants. those de$ree provided ! Association of chartered 3ertified Acco#ntants "hat is ;inancial Acco#ntin$' Ans"er ( The area of acco#ntin$ concerned "ith reportin$ financial information to interested e)ternal parties.
:enerall Accepted Acco#ntin$ 4rinciples +:AA4,( A#thoritative $#idelines that define acco#ntin$ practice at a partic#lar time. Internal Reven#e Service +IRS,( A $overnment a$enc that prescri!es the r#les and re$#lations that $overn the collection of ta) reven#es in the U.S. Sec#rities and E)chan$e 3ommission +SE3,S( The $overnment !od responsi!le for re$#latin$ the financial reportin$ practices of most p#!licl o"ned corporations in connection "ith the !# in$ and sellin$ of stoc*s and !onds. 0 ( "hat is Intan$i!le Assets ' Ans"er ( Intan$i!le assets incl#de patents- cop ri$hts- trademar*s- trade namesfranchise licenses- $overnment licenses- $ood"ill- and other items that lac* ph sical s#!stance !#t provide lon$Fterm !enefits to the compan . 3ompanies acco#nt for intan$i!le assets m#ch as the acco#nt for deprecia!le assets and nat#ral reso#rces. The cost of intan$i!le assets is s stematicall allocated to e)pense d#rin$ the asset2s #sef#l life or le$al life- "hichever is shorter- and this life is never allo"ed to e)ceed fort ears. The process of allocatin$ the cost of intan$i!le assets to e)pense Short notes H /oo* val#e FF total assets min#s total lia!ilities. +See also net "orth., /oo* val#e also means the val#e of an asset as recorded on the compan 2s !oo*s or financial reports. /oo* val#e is often different than tr#e val#e. It ma !e more or less. /rea* even point FF the amo#nt of reven#e from sales "hich e)actl e7#als the amo#nt of e)pense. /rea*even point is often e)pressed as the n#m!er of #nits that m#st !e sold to prod#ce reven#es e)actl e7#al to e)penses. Sales a!ove the !rea*even point prod#ce a profitH !elo" prod#ces a loss. Deferred income FF a lia!ilit that arises "hen a compan is paid in advance for $oods or services that "ill !e provided later. ;or e)ample- "hen a ma$aCine s#!scription is paid in advance- the ma$aCine p#!lisher is lia!le to provide ma$aCines for the life of the s#!scription. The amo#nt in deferred income is red#ced as the ma$aCines are delivered is called amortiCation- and companies almost al"a s #se the strai$htFline method to amortiCe intan$i!le assets. Ret#rn on investment +R5I, FF a meas#re of the effectiveness and efficienc "ith "hich mana$ers #se the reso#rces availa!le to them- e)pressed as a percenta$e. Ret#rn on e7#it is #s#all net profit after ta)es divided ! the shareholders2 e7#it . Ret#rn on invested capital is #s#all net profit after ta)es pl#s interest paid on lon$Fterm de!t divided ! the e7#it pl#s the lon$Fterm de!t. Ret#rn on assets #sed is #s#all the operatin$ profit divided ! the assets #sed to prod#ce the profit. T picall #sed to eval#ate divisions or s#!sidiaries. R5I is ver #sef#l !#t can onl !e #sed to compare consistent entities FF similar
companies in the same ind#str or the same compan over a period of time. Different companies and different ind#stries have different R5Is. 1aria!le cost FF a cost that chan$es as sales or prod#ction chan$e. If a !#siness is prod#cin$ nothin$ and sellin$ nothin$- the varia!le cost sho#ld !e Cero. Ho"ever- there "ill pro!a!l !e fi)ed costs.
Wor*in$ capital FF c#rrent assets min#s c#rrent lia!ilities. In most !#sinesses the ma6or components of "or*in$ capital are cash- acco#nts receiva!le- and inventor min#s acco#nts pa a!le. As a !#siness $ro"s it "ill have lar$er acco#nts receiva!le and more inventor . Th#s the need for "or*in$ capital "ill increase.
WriteFdo"n FF the partial red#ction in the val#e of an asset- reco$niCin$ o!solescence or other losses in val#e.
WriteFoff FF the total red#ction in the val#e of an asset- reco$niCin$ that it no lon$er has an val#e. WriteFdo"ns and "riteFoffs are nonFcash e)penses that affect profits 0 ( "hat is entr ta) . t pe of entr ta) ' Entr ta) is levied on that prod#ct "hich tranfer or enter a prod#ct fromFone state to another state or one District to another district-if o# sale as s#ch the prodc#t not restr#ct#rin$. There is t"o t pes of entr ta) are availa!le ?, Entr on 9otor 1ehiclesFF 9otor 1ehicles p#rchsed in other state enteres to a different State- then entr ta) is levia!le. tHIS IS A44LI3A/LE 5NL> ;5R 1EHI3LES lia!le to !e re$istered #nder 9otor 1ehicles Act. The ta) paid in other State can !e compensated or set !ac* of ta*en- if the rate of ta) is hi$hter in the State "here the vehicle is entrin$ 2, Entr Ta) on $oodsFFthis has !een recentl str#c*ed ! the ape) co#rt in the case of Lindal Strips Ltd for the reason that entr levied sh$o#ld !e compensata!le other"ise it can !e levied Imposition of 1al#e Added Ta)( Imposition of 1AT
+?, 1al#e Added Ta) is imposed and pa a!le on +a, ta)a!le s#ppliesH and +!, ta)a!le imports. Amo#nt of 1AT pa a!le +2, The amo#nt of 1AT pa a!le is calc#lated ! m#ltipl in$ the val#e of the ta)a!le s#ppl or import ! the 1AT rate. E)ample( If the val#e is ta*a ?AA and the 1AT rate is ?<M- the 1AT pa a!le is ?AA ) ?<M K ta*a ?<. 1AT rate +%, The 1AT rate for a ta)a!le s#ppl or import is +a, if the s#ppl or import is CeroFrated- Cero per centH +!, in an other case- ?< +fifteen, per cent. 3han$e of rate +., Where there is a chan$e in the 1AT rate- the rate to !e applied is-E +a, for an import of $oods( the rate applica!le at the time the 1AT !ecomes pa a!le #nder section 2.H or +!, for a s#ppl of $oods- services- or immovea!le propert ( the rate applica!le at the time of s#ppl . 0 (What is inp#t ta) ' Ans"er ( Indirect ta) +s#ch as val#e added ta) or 1AT, levied on capital $oods- ra" materials- spare parts- services etc.- "hich a !#siness cons#mes or #ses in its operations. 0 ( What is o#tp#t ta) ' Ans"er ( Ta) that a seller adds to a !# er2s !ill "hen the sell partic#lar $oods or services. At re$#lar periods of time- the total ta) the have paid "hen !# in$ $oods and services themselves is ta*en a"a from the total o#tp#t ta)es the have paid to arrive at a val#eFadded ta) fi$#re that the m#st pa to the $overnment 0 ("hat is ta) ded#ction at so#rce +TDS, Ans"er ( Ta) ded#cted at so#rce is one of the modes of collectin$ IncomeFta) from the assessees. S#ch collection of ta) is effected at the so#rce "hen income arises or accr#es. Hence "here an specified t pe of income arises or accr#es to an one- the IncomeFta) Act en6oins on the pa er of s#ch income to ded#ct a stip#lated percenta$e of s#ch income ! "a of IncomeFta) and pa onl the !alance amo#nt to the recepient of s#ch income. The ta) so ded#cted at so#rce ! the pa er- has to !e deposited in the :overnment treas#r to the credit of 3entral :ovt. "ithin the specified time. The ta) so ded#cted from the income of the recipient is deemed to !e pa ment of IncomeFta) ! the recepient at the time of his assessment. Income from several so#rces is s#!6ected to ta) ded#ction at so#rce. 4resentl this concept of T.D.S. is also #sed as an instr#ment in enlar$in$ the ta) !ase. Some of s#ch income s#!6ected to T.D.S. are salar - interestdividend- interest on sec#rities- "innin$s from lotter - horse races- commission and
!ro*era$e- rent- fees for professional and technical services- pa ments to nonFresidents etc. 0 ( What is !an* reconciliation' Ans"er ( Anal sis and ad6#stment of differences !et"een the cash !alance sho"n on a !an* statement- and the amo#nt sho"n in the acco#nt holder2s records. This matchin$ process involves ma*in$ allo"ances for chec*s iss#ed !#t not et presented- and for chec*s deposited !#t not et cleared or credited. And- if discrepancies persist- findin$ the ca#se and !rin$in$ the records into a$reement. 0 ( "hat is Ratio Anal sis' Ans"er ( A tool #sed ! individ#als to cond#ct a 7#antitative anal sis of information in a compan 2s financial statements. Ratios are calc#lated from c#rrent ear n#m!ers and are then compared to previo#s ears- other companies- the ind#str - or even the econom to 6#d$e the performance of the compan . Ratio anal sis is predominatel #sed ! proponents of f#ndamental anal sis. 0 ( "hat is trade disco#nt ' Ans"er ( a s#m or percenta$e ded#cted from the list price of a commodit allo"ed ! a man#fact#rer- distri!#tor- or "holesaler to a retailer or ! one enterprise to another in the same trade 0( "hat is cost acco#ntin$ ' Ans"er ( a !ranch of acco#ntin$ dealin$ "ith the classification- recordin$- allocations#mmariCation and reportin$ of c#rrent and prospective costs and anal Cin$ their !ehaviors. 3ost acco#ntin$ is fre7#entl #sed to facilitate internal decision ma*in$ and provides tools "ith "hich mana$ement can appraise performance and control costs of doin$ !#siness. 3arria$e in"ard (5cc#rs "hen a !#siness has to pa for p#rchased $oods to !e delivered to it2s 4remises. 3arria$e 5#t"ard(5cc#rs "hen a !#siness 4A>S for sold $oods to !e delivered to it2s c#stomers premises. 0 ( What is irrecovera!le de!ts' Ans"er ( A de!t "hich is not e)pected to !e paid . 0 ( "hat is resid#al val#e ' Ans"er ( The amo#nt a compan e)pects to !e a!le to sell a fi)ed asset for at the end of its #sef#l life.
0 ( "hat is Share ' Ans"er ( A #nit of o"nership that represents an e7#al proportion of a compan 2s capital. It entitles its holder +the shareholder, to an e7#al claim on the compan 2s profits and an e7#al o!li$ation for the compan 2s de!ts and losses. NNNT"o ma6or t pes of shares are +?, ordinar shares +common stoc*,( "hich entitle the shareholder to share in the earnin$s of the compan as and "hen the occ#r- and to vote at the compan 2s ann#al $eneral meetin$s and other official meetin$s- and +2, preference shares +preferred stoc*,( "hich entitle the shareholder to a fi)ed periodic income +interest, !#t $enerall do not $ive him or her votin$ ri$hts. See also stoc*. 0 ( definition of trial !alance. Ans"er ( The act of totalin$ de!it !alances and credit !alances to confirm that total de!its e7#al total credits. 0 ( Definition of led$er. Ans"er ( A led$er contains s#mmariCed financial information that is classified ! assi$nment to a specific acco#nt n#m!er #sin$ a 3hart of Acco#nts. 0 ( definition of ad6#stment ?.Ans"er ( increase or decrease to an acco#nt res#ltin$ from an ad6#stin$ 6o#rnal entr . ;or e)ample- the accr#al of "a$es at earFend "ill ca#se an increase in !oth salar e)pense and salar pa a!le. 2.Ans"er ( chan$in$ an acco#nt !alance !eca#se of some happenin$ or event. ;or e)ample- a c#stomer "ho ret#rns merchandise ill receive a credit ad6#stment to the acco#nt.
0 ( definition of appreciation ' ?.Ans"er ( Increase in the val#e of an asset thro#$h a rise in mar*et price- appraised val#e- or income earned- as compared to an earlier period. The opposite is Depreciation. 2.Ans"er ( Increase in the val#e of one c#rrenc vs another- "itho#t an chan$e in official val#e occ#rrin$. It res#lts from $ro"th in mar*et demand #nder floatin$ e)chan$e rates rather than official action s#ch as a c#rrenc reval#ation. 0 ( Difference !et"een depreciation appreciation'
Ans"er ( Appreciation and depreciation !oth deal "ith asset val#e over time. Some assets- s#ch as real estate- !onds- and homes $ain val#e as time $oes on. These assets are said to appreciate. 5ther assets- s#ch as vehicles- man#fact#rin$ plants- and office e7#ipment lose val#e over time +depreciate,. AppreciationOdepreciation as a ver! is the process of increasin$ val#e. ;or instance- a piece of real estate mi$ht appreciate at <M per ear and a car mi$ht depreciate ?AM a ear. DeOAppreciation do N5T have to !e linear. ;or instance- the moment o# drive a ne" car off the lot- it depreciates a considera!le amo#nt +sa ?AM of its val#e,. The ne)t ear- tho#$h- the car mi$ht onl depreciate <M. Ho" one determines the rate of deOappreciation depends on o#r acco#ntin$ r#les. ;or ta) reasons- man companies have to a!ide ! strict depreciation la"s +;or instance- it "o#ld !e #nreasona!le to depreciate a factor at @AM of it2s val#e in one ear !eca#se it "o#ld effects the compan 2s profits and th#s the ta)es that compan pa s,. ;or most cons#mers- deOappreciation is !ased on the mar*et val#e of the asset. /ac* to the car e)ample( the moment a ne" car is driven off the lot- it loses a lot of its val#e !eca#se it is then consider a G#sedG car- so people "on2t pa as m#ch for it. 0 ( "hat is fiscal ear' Ans"er ( A ?2Fmonth period over "hich a compan !#d$ets its spendin$. A fiscal ear does not al"a s !e$in in Lan#ar and end in Decem!erH it ma r#n over an period of ?2 months. The fiscal ear is referred to ! the date in "hich it ends. 0 ( difference !et"een fi)ed and varia!le costs' Ans"er ( ;i)ed costs are e)penses "hose total does not chan$e in proportion to the activit of a !#siness- "ithin the relevant time period. ;or e)ample- a retailer m#st pa rent and #tilit !ills irrespective of sales 1aria!le costs ! contrast chan$e in relation to the activit of a !#siness s#ch as sales or prod#ction vol#me. In the e)ample of the retailer- varia!le costs ma primaril !e composed of inventor +$oods p#rchased for sale,- and the cost of $oods is therefore almost entirel varia!le. In man#fact#rin$- direct material costs are an e)ample of a varia!le cost. Alon$ "ith varia!le costs- fi)ed costs ma*e #p one of the t"o components of total cost. In the most simple prod#ction f#nction- total cost is e7#al to fi)ed costs pl#s varia!le costs. 0 ( definition of 9E95RANDU9 5; ASS53IATI5N' Ans"er ( The memorand#m of association of a compan - often simpl called the memorand#m +and then often capitalised as an a!!reviation for the official name"hich is a proper no#n and #s#all incl#des other "ords,- is the doc#ment that $overns the relationship !et"een the compan and the o#tside. It is one of the doc#ments
re7#ired to incorporate a compan in the United 8in$dom- Ireland- India- /an$ladesh4a*istan and Sri Lan*a- and is also #sed in man of the common la" 6#risdictions of the 3ommon"ealth.
Ans"er ( A 9emorand#m of Association +95A, is a le$al doc#ment prepared in the formation and re$istration process of a limited lia!ilit compan to define its relationship "ith shareholders. The 95A is accessi!le to the p#!lic and descri!es the compan 2s name- ph sical address of re$istered office- names of shareholders and the distri!#tion of shares. The 95A and the Articles of Association serve as the constit#tion of the compan . The 95A is not applied in the U.S. !#t is a le$al re7#irement for limited lia!ilit companies in E#ropean co#ntries incl#din$ the United 8in$dom- ;rance and Netherlands- as "ell as some 3ommon"ealth nations. 0 ( definition of Articles of Association' Ans"er ( A doc#ment descri!in$ the p#rpose- place of !#siness- and details of a nonF profit or$aniCation. Ans"er ( A doc#ment that specifies the re$#lations for a compan 2s operations. The articles of association define the compan 2s p#rpose and la s o#t ho" tas*s are to !e accomplished "ithin the or$aniCation- incl#din$ the process for appointin$ directors and ho" financial records "ill !e handled. 0 ( "hat *inds of terms incl#ded in Articles of Association' The Articles can cover a medle of topics- not all of "hich is re7#ired in a co#ntr 2s la". Altho#$h all terms are not disc#ssed- the ma cover( = the iss#in$ of shares +also called stoc*,- different votin$ ri$hts attached to different classes of shares = val#ation of intellect#al ri$hts- sa - the val#ations of the I4R of one partner and- in a similar "a as ho" "e val#e real estate of another partner = the appointments of directors F "hich sho"s "hether a shareholder dominates or shares e7#alit "ith all contri!#tors = directors meetin$s F the 7#or#m and percenta$e of vote = mana$ement decisions F "hether the !oard mana$es or a fo#nder = transfera!ilit of shares F assi$nment ri$hts of the fo#nders or other mem!ers of the compan do = special votin$ ri$hts of a 3hairman- and hisOher mode of election = the dividend polic F a percenta$e of profits to !e declared "hen there is profit or other"ise = "indin$ #p F the conditions- notice to mem!ers = confidentialit of *no"Fho" and the fo#nders2 a$reement and penalties for disclos#re = first ri$ht of ref#sal F p#rchase ri$hts and co#nterF!id ! a fo#nder.
0( definition of memorand#m of a$reement ' Ans"er ( A memorand#m of a$reement +95A, or cooperative a$reement is a doc#ment "ritten !et"een parties to cooperativel "or* to$ether on an a$reed #pon pro6ect or meet an a$reed o!6ective. The p#rpose of an 95A is to have a "ritten #nderstandin$ of the a$reement !et"een parties. An 95A is a $ood tool to #se for man herita$e pro6ects. It can !e #sed !et"een a$encies- the p#!lic and the federal or state $overnments- comm#nities- an0 ( definition of resident compan ' Ans"er ( Entit treated ! the 6#risdiction- in "hich it is re$istered or incorporated or cond#cts its !#siness- as resident for e)chan$e control andOor ta) p#rposes d individ#als. A0 ( definition of non resident compan ' Ans"er ( That is incorporated in a 6#risdiction as nonFresident for ta) p#rposes. Ans"er ( A compan treated ! the 6#risdiction in "hich it is incorporated as nonF resident for ta) p#rposes or e)chan$e control p#rposes or !oth n 95A la s o#t the $ro#nd r#les of a positive cooperative effort. 0 ( definition of sales ta)' Ans"er (A sales ta) is a cons#mption ta)- #s#all paid ! the cons#mer at the point of p#rchase- itemiCed separatel from the !ase price- for certain $oods and services. The ta) amo#nt is #s#all calc#lated ! appl in$ a percenta$e rate to the ta)a!le price of a sale 0( definition of p#rchase ta)' Ans"er ( A ta) that is added to the price of $oods sold in shops- !#t not on !asic $oods that people need to !# - that the o"ner of the shop m#st pa to the $overnment Ans"er ( a ta0 ( definition of e)cise ta) ' Ans"er ( An indirect ta) char$ed on the sale of a partic#lar $ood. Ans"er ( An e)cise ta) is a ta) on #se or cons#mption of certain prod#cts. E)cise ta)es are sometimes incl#ded in the price of a prod#ct- s#ch as motor f#els- ci$arettes- and alcohol. E)cise ta)es ma also !e imposed on some activities- li*e $am!lin$. E)cise ta)es ma !e imposed ! the federal $overnment or ! a state. ) levied on nonessential cons#mer $oods and added to sellin$ prices ! retailers
0 ( definition of #se ta) ' Ans"er ( Use ta) is levied "hen the prod#cts are p#rchased from a different state pa in$ the sales ta) to that state. This ta) compensate the state "here the $oods are finall p#t to #se- the loss it has s#ffered !eca#se of the p#rchase from a different state.