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 $ive a tr#e and fair vie" of the financial state of the entit . .( What do o# mean ! vo#chin$' Ans"er ( /o#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 . ( Definition of a#dit ' Ans"er ( An e)amination and verification of a compan 0s financial and acco#ntin$ records and s#pportin$ doc#ments ! a professional- s#ch as a 1ertified 2#!lic Acco#ntant. . ( 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 3#st cond#cts it to *eep a chec* on the operations of the compan . 4n 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 re5#ires it for ta)ation p#rposes. . ( What is ann#al $eneral meetin$+A67, ' Ans"er ( A67 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 . ( What is e)traordinar $eneral meetin$+E67, ' Ans"er ( A meetin$ other than the ann#al $eneral meetin$ !et"een a compan 0s

shareholders- e)ec#tives and an other mem!ers. An E67 is . ( R#les s#rro#ndin$ the A67 Ans"er ( 7ost private companies are not re5#ired to hold an A67. 2#!lic limited companies +plcs, m#st hold an A67 "ithin si) months of their financial ear end. 1ompanies can still hold an A67 if the choose to. As "ith other meetin$s- an A67 m#st !e arran$ed if an director as*s for one "ith d#e notice- or if 8 per cent of the mem!ers re5#est one. A compan ma also still need to hold one in certain circ#mstances. 9or e)ample- o# m#st hold an A67 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 A67( : ;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 A67 can !e held at shorter notice if >? per cent of mem!ers a$ree +>8 per cent for plcs,. : ;o# are no lon$er re5#ired to circ#late copies of the compan 0s acco#nts !efore an A67. Ho"ever- the m#st !e sent to mem!ers !efore the are d#e to !e filed "ith the re$istrar of companies. : Directors and shareholders can vote on the appointment of directors and a#ditors to the compan +if re5#ired,. : 4rdinar resol#tions can no" !e passed ! a simple ma3orit and special resol#tions re5#ire at least @8 per cent of those eli$i!le to vote in favo#r. : ;o# m#st file at 1ompanies Ho#se an special resol#tions passed at a meetin$. #s#all called on short notice and deals "ith an #r$ent matter. . ( 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. . ( Definition of Accr#al Aasis acco#ntin$ ' Ans"er ( The most commonl #sed acco#ntin$ method- "hich reports income "hen earned and e)penses "hen inc#rred. . ( "hat is capital e)pendit#re ' Ans"er ( 7one spent to ac5#ire or #p$rade ph sical assets s#ch as !#ildin$s and machiner . also called capital spendin$ or capital e)pense. . ( "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. Aeside 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. . ( What is Asset ' Ans"er ( Assets are a compan Bs reso#rcesCthin$s the compan o"ns. E)amples of assets incl#de cash- acco#nts receiva!le- inventor - prepaid ins#rance- investmentsland- !#ildin$s- e5#ipment- and $ood"ill. 9rom the acco#ntin$ e5#ation- "e see that the amo#nt of assets m#st e5#al the com!ined amo#nt of lia!ilities pl#s o"nerBs +or stoc*holdersB, e5#it . . ( "hat is Lia!ilities ' Ans"er ( Lia!ilities are a compan Bs o!li$ationsCamo#nts the compan o"es. E)amples of lia!ilities incl#de notes or loans pa a!le- acco#nts pa a!le- salaries and "a$es pa a!le- interest pa a!le- and income ta)es pa a!le . ( "hat is 4"nerBs or stoc*holdersB e5#it ' Ans"er ( 4"nerBs or stoc*holdersB e5#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. . ( 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. . ( definition of e)pense ' Ans"er ( 2a ment of cash or cashDe5#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. . (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$e- or o!solescence. 7ost assets lose their val#e over time +in other "ords- the depreciate,. ( What is income statement ' Ans"er ( A financial statement that presents the reven#es and e)penses and res#ltin$ net income or net loss of a compan for a specific period of time . . ( "hat is !alance sheet ' Ans"er ( A financial statement that s#mmariEes a compan 0s assets- lia!ilities and shareholders0 e5#it at a specific point in time.

. ( "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 . . ( definition of ta) ' Ans"er ( A fee char$ed +FleviedF, ! a $overnment on a prod#ct- income- or activit of an or$aniEation or person . . ( What is direct ta) ' Ans"er ( In the $eneral sense- a direct ta) is one paid directl to the $overnment ! the persons or or$aniEation +3#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). . ( What is indirect ta) ' Ans"er ( A ta)- s#ch as a sales ta) or val#eDadded 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. . ( "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$n investment. . ( "hat is /AT' Ans"er ( /al#e Added Ta). A cons#mption ta) "hich is levied at each sta$e of prod#ction !ased on the val#e added to the prod#ct at that sta$e. . ( What is income ta) ' Ans"er ( a ta) levied on incomes- especiall an ann#al $overnment ta) on personal incomes. . ( What is internal rate of ret#rn +IRR, Ans"er ( The internal rate of ret#rn +IRR, is a rate of ret#rn #sed in capital !#d$etin$ to meas#re and compare the profita!ilit of investments. It is also called the disco#nted cash flo" rate of ret#rn +D19R4R, or simpl the rate of ret#rn +R4R, . ( "hat is Net present val#e' Ans"er ( Net present val#e is an economic standard method for eval#atin$ competin$ lon$Dterm pro3ects in capital !#d$etin$

. ( 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$reement to arise. . ( "hat is hard"are ' Ans"er ( Hard"are refers to a ph sical piece of a comp#ter. This co#ld !e a hard drive- monitor- memor chip- or 12U. The *e idea is that the item is somethin$ o# can to#ch. This compares to soft"are "hich is not tan$i!le in an "a . ;o# can0t pic* it #p or "ei$h it. ;et- "itho#t soft"are- hard"are is #seless. T pical e)amples of hard"are incl#de the comp#ter o#0re #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. .( "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 . . ( 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$overnmental- and other net"or*s- all of "hich #se the same set of comm#nications protocols. .( What is EDcommerce' Ans"er ( EDcommerce +electronic commerce or E1, is the !# in$ and sellin$ of $oods and services on the Internet- especiall the World Wide We!. In practice- this term and a ne"er term- eD!#siness- are often #sed interchan$ea!l . 9or online retail sellin$- the term eDtailin$ is sometimes #sed. . ( "hat is EDmail' Ans"er ( EDmail +electronic mail, is the e)chan$e of comp#terDstored messa$es ! telecomm#nication. +Some p#!lications spell it emailG "e prefer the c#rrentl more esta!lished spellin$ of eDmail., EDmail messa$es are #s#all encoded in AS1II te)t. Ho"ever- o# can also send nonDte)t files- s#ch as $raphic ima$es and so#nd files- as attachments sent in !inar streams. S47E Ela!orate (
I1AA D Instit#te of 1hartered Acco#ntants of Aan$ladesh. I17AA D Instit#te of 1ost and 7ana$ement Acco#ntants of Aan$ladesh. 1I7A D 1hartered Instit#te of 7ana$ement Acco#ntants I1DDRA D International 1entre for Diarrhoeal Disease Research- Aan$ladesh

NAR D National Aoard of Reven#e SE1 D Sec#rities and E)chan$e 1ommission DSE D Dha*a Stoc* E)chan$e 1SE- D 1hitta$on$ Stoc* E)chan$e 9A11I D 9ederation of Aan$ladesh 1ham!ers of 1ommerce and Ind#stries 6AA2 D 6enerall Accepted Acco#ntin$ 2rinciples RA7 D RandomDaccess memor S47E A114UNTIN6 A4DIES IASA D International Acco#ntin$ Standards Aoard. 9ASA D 9inancial Acco#ntin$ Standards Aoard . ASA D Acco#ntin$ Standards Aoard . 6ASA D 6overnmental Acco#ntin$ Standards Aoard . 4THER 4R6ANIHATI4N I A4DIES I9I1 D International 9ederation of Acco#ntants AIA D Association of International Acco#ntants AAA D American Acco#ntin$ Association I1AEW D Instit#te of 1hartered Acco#ntants in En$land and "ales SA9A D So#th Asian 9ederation of Acco#ntants S47E STANDARDS I 2RIN1I2LES 6AA2 D 6enerall Accepted Acco#ntin$ principles AAS D Aan$ladesh Acco#ntin$ Standards I9RS D International 9inancial reportin$ Standards 9AS D 9inancial Acco#ntin$ Standards +USA, 9RS D 9inancial reportin$ Standards +U*, AUDITIN6 STANDARDS I A4DIES ISA D international Standards on a#ditin$ IAASA D International A#ditin$ and Ass#rance Standards Aoard 2R49ESSI4NAL DE6REES I 4R6ANIHATI4N 1A J chartered Acco#ntant A1A J Associate of 1hartered Acco#ntants 91A J 9ello" of 1hartered Acco#ntants I1AA D Instit#te of 1hartered Acco#ntants of Aan$ladesh. these *inds of de$ree provid ! Instit#te of 1hartered Acco#ntants of Aan$ladesh+I1AA, 12A J 1ertified 2#!lic Acco#ntant AI12A J American Instit#te of 1ertified p#!lic Acco#ntant 2R49ESSI4NAL DE6REES I 4R6ANIHATI4N 17A J 1ertified 7ana$ement Acco#ntants A17A J Associate of 1ertified 7ana$ement Acco#ntants 917A Jfello" of 1ertified 7ana$ement Acco#ntants

2R49ESSI4NAL DE6REES I 4R6ANIHATI4N

17A J 1ost and 7ana$ement Acco#ntants A17A J Associate of 1ost and 7ana$ement Acco#ntants 917A J 9ello" of 1ost and 7ana$ement Acco#ntants I17AA J Instit#te of 1ost and 7ana$ement Acco#ntants of Aan$ladesh.those *inds of de$ree provided ! Instit#te of 1ost and 7ana$ement Acco#ntants of Aan$ladesh 2R49ESSI4NAL DE6REES I 4R6ANIHATI4N 17A J 1hartered 7ana$ement Acco#ntants A17A J Associate of 1hartered 7ana$ement Acco#ntants 917A J 9ello" of 1hartered 7ana$ement Acco#ntants 1I7A J 1hartered instit#te 7ana$ement Acco#ntants. those de$ree provided ! 1hartered instit#te 7ana$ement Acco#ntants 2R49ESSI4NAL DE6REES I 4R6ANIHATI4N 1AT J 1ertified Acco#ntin$ Technician A11A J Associate of chartered 1ertified Acco#ntants 911A J fello" of chartered 1ertified Acco#ntants A11A J Association of chartered 1ertified Acco#ntants. those de$ree provided ! Association of chartered 1ertified Acco#ntants

"hat is 9inancial Acco#ntin$' Ans"er ( The area of acco#ntin$ concerned "ith reportin$ financial information to interested e)ternal parties. 6enerall Accepted Acco#ntin$ 2rinciples +6AA2,( 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 1ommission +SE1,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. . ( "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- $ood"ill- and other items that lac* ph sical s#!stance !#t provide lon$Dterm !enefits to the compan . 1ompanies 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 asset0s #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 G

Aoo* val#e DD total assets min#s total lia!ilities. +See also net "orth., Aoo* val#e also means the val#e of an asset as recorded on the compan 0s !oo*s or financial reports. Aoo* val#e is often different than tr#e val#e. It ma !e more or less. Area* even point DD the amo#nt of reven#e from sales "hich e)actl e5#als the amo#nt of e)pense. Area*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 e5#al to e)penses. Sales a!ove the !rea*even point prod#ce a profitG !elo" prod#ces a loss. Deferred income DD a lia!ilit that arises "hen a compan is paid in advance for $oods or services that "ill !e provided later. 9or e)ample- "hen a ma$aEine s#!scription is paid in advance- the ma$aEine p#!lisher is lia!le to provide ma$aEines for the life of the s#!scription. The amo#nt in deferred income is red#ced as the ma$aEines are delivered is called amortiEation- and companies almost al"a s #se the strai$htDline method to amortiEe intan$i!le assets. Ret#rn on investment +R4I,DD a meas#re of the effectiveness and efficienc "ith "hich mana$ers #se the reso#rces availa!le to them- e)pressed as a percenta$e. Ret#rn on e5#it is #s#all net profit after ta)es divided ! the shareholders0 e5#it . Ret#rn on invested capital is #s#all net profit after ta)es pl#s interest paid on lon$Dterm de!t divided ! the e5#it pl#s the lon$Dterm de!t. Ret#rn on assets #sed is #s#all the operatin$ profit divided ! the assets #sed to prod#ce the profit. T picall #sed to eval#ate divisions or s#!sidiaries. R4I is ver #sef#l !#t can onl !e #sed to compare consistent entities DD similar companies in the same ind#str or the same compan over a period of time. Different companies and different ind#stries have different R4Is. /aria!le cost DD a cost that chan$es as sales or prod#ction chan$e. If a !#siness is prod#cin$ nothin$ and sellin$ nothin$- the varia!le cost sho#ld !e Eero. Ho"ever- there "ill pro!a!l !e fi)ed costs. Wor*in$ capital DD c#rrent assets min#s c#rrent lia!ilities. In most !#sinesses the ma3or 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. WriteDdo"n val#e DD the partial red#ction in the val#e of an asset- reco$niEin$ o!solescence or other losses in val#e. WriteDoff DD the total red#ction in the val#e of an asset- reco$niEin$ that it no lon$er has an val#e. WriteDdo"ns and "riteDoffs are nonDcash e)penses that affect profits . ("hat is ta) ded#ction at so#rce +TDS, Ans"er ( Ta) ded#cted at so#rce is one of the modes of collectin$ IncomeDta) 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 IncomeDta) Act en3oins on the pa er of s#ch income to ded#ct a stip#lated percenta$e of s#ch income ! "a of IncomeDta) 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 6overnment treas#r to the credit of 1entral 6ovt. "ithin the specified time. The ta)

so ded#cted from the income of the recipient is deemed to !e pa ment of IncomeDta) ! the recepient at the time of his assessment. Income from several so#rces is s#!3ected to ta) ded#ction at so#rce. 2resentl 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#!3ected 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 nonDresidents etc. . ( What is !an* reconciliation' Ans"er ( Anal sis and ad3#stment of differences !et"een the cash !alance sho"n on a !an* statement- and the amo#nt sho"n in the acco#nt holder0s 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$reement. . ( "hat is Ratio Anal sis' Ans"er ( A tool #sed ! individ#als to cond#ct a 5#antitative anal sis of information in a compan 0s financial statements. Ratios are calc#lated from c#rrent ear n#m!ers and are then compared to previo#s ears- other companies- the ind#str - or even the econom to 3#d$e the performance of the compan . Ratio anal sis is predominatel #sed ! proponents of f#ndamental anal sis. . ( "hat is trade disco#nt ' Ans"er ( a s#m or percenta$e ded#cted from the list price of a commodit allo"ed ! a man#fact#rer- distri!#tor- or "holesaler to a retailer or ! one enterprise to another in the same trade .( "hat is cost acco#ntin$ ' Ans"er ( a !ranch of acco#ntin$ dealin$ "ith the classification- recordin$- allocations#mmariEation and reportin$ of c#rrent and prospective costs and anal Ein$ their !ehaviors. 1ost acco#ntin$ is fre5#entl #sed to facilitate internal decision ma*in$ and provides tools "ith "hich mana$ement can appraise performance and control costs of doin$ !#siness. 1arria$e in"ard ( 4cc#rs "hen a !#siness has to pa for p#rchased $oods to !e delivered to it0s 2remises. 1arria$e 4#t"ard( 4cc#rs "hen a !#siness 2A;S for sold $oods to !e delivered to it0s c#stomers premises. . ( What is irrecovera!le de!ts' Ans"er ( A de!t "hich is not e)pected to !e paid .

. ( "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. . ( "hat is Share ' Ans"er ( A #nit of o"nership that represents an e5#al proportion of a compan 0s capital. It entitles its holder +the shareholder, to an e5#al claim on the compan 0s profits and an e5#al o!li$ation for the compan 0s de!ts and losses. KKKT"o ma3or t pes of shares are +<, ordinar shares +common stoc*,( "hich entitle the shareholder to share in the earnin$s of the compan as and "hen the occ#r- and to vote at the compan 0s 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$hts. See also stoc*. . ( definition of trial !alance. Ans"er ( The act of totalin$ de!it !alances and credit !alances to confirm that total de!its e5#al total credits. . ( Definition of led$er. Ans"er ( A led$er contains s#mmariEed financial information that is classified ! assi$nment to a specific acco#nt n#m!er #sin$ a 1hart of Acco#nts. . ( definition of ad3#stment <.Ans"er ( increase or decrease to an acco#nt res#ltin$ from an ad3#stin$ 3o#rnal entr . 9or e)ample- the accr#al of "a$es at earDend "ill ca#se an increase in !oth salar e)pense and salar pa a!le. 2.Ans"er ( chan$in$ an acco#nt !alance !eca#se of some happenin$ or event. 9or e)ample- a c#stomer "ho ret#rns merchandise ill receive a credit ad3#stment to the acco#nt.

. ( 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. . ( 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 $oes on. These assets are said to appreciate. 4ther assets- s#ch as vehicles- man#fact#rin$ plants- and office e5#ipment lose val#e over time +depreciate,. AppreciationLdepreciation as a ver! is the process of increasin$ val#e. 9or instance- a piece of real estate mi$ht appreciate at 8M per ear and a car mi$ht depreciate <?M a ear. DeLAppreciation do N4T have to !e linear. 9or instance- the moment o# drive a ne" car off the lot- it depreciates a considera!le amo#nt +sa <?M of its val#e,. The ne)t ear- tho#$h- the car mi$ht onl depreciate 8M. Ho" one determines the rate of deLappreciation depends on o#r acco#ntin$ r#les. 9or ta) reasons- man companies have to a!ide ! strict depreciation la"s +9or instance- it "o#ld !e #nreasona!le to depreciate a factor at >?M of it0s val#e in one ear !eca#se it "o#ld effects the compan 0s profits and th#s the ta)es that compan pa s,. 9or most cons#mers- deLappreciation is !ased on the mar*et val#e of the asset. Aac* 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 F#sedF car- so people "on0t pa as m#ch for it. . ( "hat is fiscal ear' Ans"er ( A <2Dmonth period over "hich a compan !#d$ets its spendin$. A fiscal ear does not al"a s !e$in in Nan#ar and end in Decem!erG it ma r#n over an period of <2 months. The fiscal ear is referred to ! the date in "hich it ends. . ( difference !et"een fi)ed and varia!le costs' Ans"er ( 9i)ed costs are e)penses "hose total does not chan$e in proportion to the activit of a !#siness- "ithin the relevant time period. 9or e)ample- a retailer m#st pa rent and #tilit !ills irrespective of sales /aria!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 e5#al to fi)ed costs pl#s varia!le costs. . ( 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- itemiEed 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 .( 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 $overnment Ans"er ( a ta. ( definition of e)cise ta) ' Ans"er ( An indirect ta) char$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 . ( 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.

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