BAS and IAS Forms
1. BAS= they are generally used by the entities to pay off the collected or summed up GST from the business and to report it. The work of the BAS form is to provide the company with valid information and also to calculate the GST liability.
IAS= the main use of the Instalment Activity Statement is to keep a track that is to report and to pay off the due amount of the employees in the form of salaries. It is to be noted that the IAS form is drafted on a monthly basis and also included on a quarterly BAS form.
2. A general ledger can be defined as an account that is utilized to filter, as well as store the balance sheet and the transactions. There are various examples when it comes to the general ledger like the inventory, accounts receivables, plant and equipment. In short, it covers the asset account. On the other hand, the liability account contains the notes payable, expenses that are accrued, expenses (salaries), rent, etc. it needs to be noted that ledger accounts of various type are control accounts and will be traced in the form of a subsidiary ledger (Choi & Meek, 2011). Accounts receivable can be termed as a control account and there will be a presence of a subsidiary ledger that includes the credit performance of every customer.
3. Ethical Principles
- Behavior reflected by integrity, dealing in a fair manner, and performing in the clients interest that is beneficial to them
- Adherence to the rules and providing excellence in technical part.
- In times of conflict and issue providing priority to the ethics.
- Regular application to ethical behavior that is positive in the entire industry.
Codes in financial service industry
- There should be an advising body so as to provide assistance while selling policies of life insurance.
- Competencies of basic nature and training that must be present with the advisers
- Handling of complaints that pertain to the internal department and membership that links to the dispute of the external resolution scheme needs.
- Supervision and training of agents and employees.
- Improved claims handling procedures.
- Enhances the level of policy documentation that contains the information regarding the code existence.
4. The manual system of record keeping is not as preferable as computer based record keeping. In the manual system of record keeping the financial record of the company are all on paper. All the accounting are done in paper. Sort and store all the paperwork, receipts, and payment in 12 separate months. Serially according to date all papers are kept. The bank transaction from the pass book is recorded in the paper by preparing ledger and all. Even the credit card transactions are recorded in papers. In the case of electronic record keeping all the transaction are recorded electronically (Northington, 2011). There is different software which can easily record the transaction such as Tallyerp9, SAAP etc which are used by most of the companies in order to record a financial transaction. The backup also was taken weekly so that if the data lost then we can recover easily. We can maintain a detail of income and expenses, payments to workers, stock and assets detail.
General Ledger
5. The financial report is a report which gives full information about a particular company. The report aims to provide reasonable information to the shareholders and other people who are interested in the activities of the organization (Vaitilingam, 2010). The companies that are listed on stock exchange are needed to make a financial report at frequent interval. There are various information present in the financial report such as general information of the corporate, director’s report, operating and financial review, auditor’s report, balance sheet which is also defined as statement of financial position, income statement also termed as profit and loss statement, statement of changes in equity, cash flow statement, cash flow statement which contained all the cash and bank records, notes to financial statement, Accounting policies. Various other information can even be traced in report of corporate social responsibility that projects the role of the company for the environment as a whole (Bodie et. l, 2014). For the purpose of compliance form 10_K is submitted to the U.S. Securities and Exchange Commission.
6. Budgets – for a particular period of time the quantitative expression of a financial plan is collectively known as the budget. The money summed up or collected for a particular cause or the summary of expected expenses together with projections on how to meet them is termed as budgets. It defines and shows the plan of a particular company while discussing their strategies and activities in defined term. The budget of a company may include liabilities, cash flows, costs, expenses and sales volume.
Cash Flows – the incomings and outgoings of a company in the form of cash representing the operatives activities is put under the heading of cash flows. If we consider the definition from the accounting point of view then it can be said that the difference in the cash available at the beginning of the period with the cash available at the end is known as the cash flows. Cash flow is said to be positive and healthy if the closing balance is higher than the opening balance.
General Ledgers – It can be defined as an account or record that is utilized to filter and store the data of balance sheet and statements. The example of general ledger contains the assets accounts like that of fixed assets, current assets and the general liability contains current liabilities and liabilities. It is a well defined set of accounts that are numbered for the record of accounting. It gives an overall record of the financial happenings over the entire proceedings of the company. Further, it even contains information that aids in the preparation of financial statements like the assets, liabilities, owner’s equity, etc.
Ethical Principles in Financial Services
Profit and Loss Statements – the revenues, costs, and expenses that are incurred by the company during a specific period of time especially during the fiscal quarters of the company are summed up and put under the profit and loss statements. The profit and loss statements also provide the customers with satisfactory and valuable information about the profit generating ability of the company. The statements also tell us about the mistakes made by the company and the lacking factors of the entity.
7. Balance sheet used to give the full picture of the company. Statement of cash flows is maintained which given the exact inflow and outflow of cash of the company. Statement of stockholder equity is maintained. The current year balance sheet is compared with the previous with the previous year in order to view the changes in the liabilities and assets. Auditors report can be prepared with the help of balance sheet (Berk et. al, 2015). In income tax department Form 3CA is submitted by those who have a tax audit. In Form, 3CA lot of information are easily available from the balance sheet such as loan information whether secured or unsecured loan. From the balance sheet, fixed Asset detail can be prepared. By seeing the previous year figures of fixed assets current year fixed detail are prepared and depreciation is also calculated (Parrino et. al, 2012). By seeing the balance sheet working capital of the company are recorded easily which are used by the bankers from whom the company takes a loan
8. A report can be used to explain a situation to the reader. A financial report contains fully fledged information about the company. The shareholders purchase the shares by seeing the company financial report. By seeing the secured loan the company can make an estimate about the money the company has taken from the bank and other parties. By seeing the earning per share the company can analyze the profit per share of the company. The P/E ratio is also to see whether the company is capable of giving profit to the shareholders. In the balance sheet, the reader can see the share capital. The reader is also able to see the total assets the company held from which they can able to recover their all tax burden.
9. They should be given a previous year balance sheet from which they are required to analysis it. If all the ratio is calculated properly such as current ratio, quick ratio, earning per share etc. if the ratio is calculated properly that be very important for analyzing the report. The working capital is also recorded that is current asset minus current liability. Banker usually requires working capital in order to view the company status (Berk et. al, 2015). Thus this type of ratio is the basis which helps us to know how often reports are generated.
Manual vs. Computer-based Record Keeping
10. The double-entry procedure of accounting or bookkeeping defines that every business transaction can have two or more accounts. The double entry also keeps track of the accounting standard to be in a correct situation. A third aspect of double entry is that the amounts entered into the general ledger accounts as debits must be equal to the amounts entered as credits. For example, if an entity pays for an advertisement then its cash account will be decreased with an increase in the advertisement account (Arnold, 2010).
11. In accrual system of accounting, the transactions are recorded when they occur. Accrual system of accounting does the entry or records the transaction even if no cash changes hand. The accrual basis of accounting is heavily relied upon as compared to the cash basis of accounting. In cash basis of accounting, the transaction is recorded when the transaction takes place after cash changes the hand. But they are used very less as it leads to mismatching of revenue earned with the money which is used for expenses (Arnold, 2010).
12. Paying tax to the government is the responsibility of each and every citizen. They should disclose each and every amount in the report truly. They can even evade tax by showing less profit or showing fewer turnovers than actual. Taxpayers even can claim a refund by misrepresentation the taxpayers. Tax evasion is regarded as a crime. Many laws are there if any person evades tax such as prosecution and penalty. Even India has joined hand with America in one bond so that they can find people who are evading tax. The one who evades tax is liable for a penalty three times the amount concealed. When we get into the trap of government then it is very difficult to get out of this (Needles & Powers, 2013). The penalty can rise from 100% to 300% of the amount of income not shown to the government. If the person tries to evade tax than the government also seize the asset which is shown in the balance sheet. If the property which is size are not enough then the government also seize the companies’ director assets.
References
Arnold, G 2010, The Financial Times Guide to Investing, Prentice Hall.
Berk, J, DeMarzo, P & Stangeland, D 2015, Corporate Finance, Canadian Toronto: Pearson Canada.
Bodie, Z, Kane, A. & Marcus, A. J 2014, Investments, McGraw Hill
Choi, R.D. & Meek, G.K 2011, International accounting, Pearson Press .
Guerard, J. 2013, Introduction to financial forecasting in investment analysis, New York, NY: Springer.
Needles, B.E & Powers, M 2013, Principles of Financial Accounting, Financial Accounting Series: Cengage Learning.
Northington, S 2011, Finance, New York, NY: Ferguson’s.
Parrino, R., Kidwell, D & Bates, T 2012, Fundamentals of corporate finance, Hoboken, NJ: Wiley
Vaitilingam, R 2010, The Financial Times Guide to Using the Financial Pages, London: FT Prentice Hall.
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