What is the Bangladesh standard on Audit(BSA-300) ? Describes in details

Corporate practice bd

Ans:-

01. What is financial year / Fiscal Year (FY) / Income year (IY)?

 

Ans:-Financial year / Income year / Fiscal year are the immediate preceding of the assessment year. A Financial year or income year (FY) is starting from 1st April of the calendar year & ends on 31st March of the next calendar year. If you earn money in the financial year but you have to pay tax return in the next year, I mean assessment year.

Say for example,

You earn money total individual income =5, 00, 0000 in (2020-2021) (IY). Now your assessment year is 2021-2022 (AY) where you have to submit an individual tax return.

 

02. Assessment year(AY):-

 

 Ans:-Assessment year is the year immediately following the financial year. if your financial year is 2020-2021 then your assessment year (EY) will be 2021-2022.

03. Accounting year (AY) / Accounting period:-

 

Ans:-The accounting year/Accounting period is the year that covers twelve months period of time. It may be started from any month but must cover twelve months when it starts. The business owner may take the decision from which month starts for accounting year depending on their best choices. The accounting year may be following categories depending nature of the business.

   01. Start from 1st April-2020 to 31 march-2021 or

   02. Start from 1st February -2020 to 31 January-2021 or

   03. Start from 1st October -2020 to 31 September -2021

   04. Calendar year:-

 

 Ans:-

The calendar year is the year refers to a one-year period, starting from 1st January to

And ending on 31, December. A calendar year lasts 365 days and 366 days during a leap year.

Say for example,

 If your income year is 2020-2021 stars from 1st April -2020 of calendar year & ends on 31stMarch-2021 of the next calendar year, whereas, Calendar year starts from 1st January to and on ends 31, December will be your Calendar year.

05. What is GAAP?

Ans. GAAP is the abbreviation for Generally Accepted Accounting Principles (GAAP) issued by the Institute of Chartered Accountants of India (ICAI) and the provisions of the Companies Act, 1956. It is a cluster of accounting standards and common industry usage, and it is used by organizations to: 

 01.Record their financial information properly

02.Summarize accounting records into financial statements

 03.Disclose information whenever required

  06. What do you mean by Accounting Cycle?

Ans:-

There are Eight steps to implementing Accounting cycle, these are

a)    putting transaction into the general journal

b)    Posting entries in to the general ledger

c)     Preparing adjusted trial balance

d)     Adjusting entries properly

e)     Preparing an adjusted trial balances

f)      Organizing the account into the financial statements

g)     Closing the book

h)      And finally preparing a post closing trial balance

07.  What is Accounting conventions?

Ans:-An accounting convention is a most common practice in accounting where as used as a guideline associated with the principles, of accounting and are aimed at bringing about consistency in the maintenance of accounts. These standards are used in accounting for more accuracy, efficiently and maintain professional standard code conduct also

  There are four Accounting conventions are as follows:-

 01. Monetary measurement:-

In every accounting transaction must be fulfill the criteria of monetary term unless it is not a pure account.

   02. Separate entity:-

In every transaction must be separate entity, I mean a transaction is a business or private transaction, must be segregate from transactions that relate to the business.

 03. Realization:-

Under this convention every transaction must have realization I mean monetary inflow or outflow exist to satisfy pure accounting transaction. 

 

   04. Materiality:- 

It is important convention. Under this convention “Materiality” suggests that this should only be an issue if judgment is significant or material to user of the accounts. The concept of materiality is an important issue for auditor of financial accounts. 

08. What is Accounting concepts?

a. Going concern:-

The going concern concept is defined as the assumption that the enterprise will continue in operational existence in the foreseeable future. This means that the income statement and balance sheet assume no intention or necessity to liquidate.

b. Consistency:-

Under this concept it is assumed that business runs year to year, period to period, I mean it is not stable for pacific period. It runs Consistency for ever also.

c. Prudence:-

It is a concept where profits are not recognized until a sale has been completed. Only sales agreement is not a valid process of revenue recognition unless actually goods or product are delivered to the customer.

d. Matching concepts:-

Under a matching concept requires that the expenses incurred during a period be recorded in the same period in which the related revenues are earned. This principle recognizes that businesses must incur expenses to earn revenues. It is associated with the accrual basis of accounting.

09. What is Contingent Liabilities?

Ans.Contingent Liabilities are potential obligations that may or may not become an actual liability. They may or may not be incurred by an entity, based on the outcome of an uncertain future event, e.g. – If an ex-employee of an ABC company sues it for gender discrimination for any particular sum, the company has a contingent liability. In case the company is found guilty, it will have a liability, and if it is not found guilty, the company will not have an actual liability.

10. Can you name some common errors in Accounting?

   Ans:-

     Some common accounting errors are:-

 01.Error of omission

  02.Error of commission

 03. Error of original entry

 04. Error of accounting principle

            05.Compensating error

 06.Error of entry reversal

  07. Error of duplication