Theory Base of Accounting Test - 8

As per Dual aspect for every debit there is credit. Every transaction should have two sided effect to the extent of same amount.

The IASC was reponsible for developing the international accounting standards and promoting the application of these standards worldwide so as to bring the international uniformity in the presentation and methods followed by the orgnaisations. It was founded in JUNE 1973 in london.

In India The ICAI constituted ASB( Accounting Standards Board) to formulate the accounting standards, taking into consideration the applicable laws, customs, usages and business enviornment, bringing them in line with IASs.

IFRS are to develop in public interest, a single set of high quality, understandable and enforceable global accounting standards that require high quality, transparent and comparable information in financial statements and other financial reporting at fiar value.

IFRS are more comprehensive and market driven since it improves quality of information, increases market efficiency and minimises capital lost. And they are priniciple based accounting standards. At international level.

IASB  has replaced IAS and has adopted 41 International Accounting Standards and SIC (Standards Interpretation Committee). Though there has been certain modifiactions as per the changing environment in certain IASs.

According to Prudence principle all anticipated profits should be ignored and all anticipated losses are recorded for., thus overvaluation of assets and revenue will lead to anticipated profits which should not be recorded for.

Accounting Statndard is a selected set of accounting policies or broad guidelines issued by an accounting body, regarding the principles and methods to be chosen out of several alternatives. They are norms and not accounting concept as concept is logical consideration and a notion which is generally and widely accepted.

Accoring to accrual concept revenue is recognized when it is earned and expenses is recognised when an obligation of payment arises. Thus Rent of the month of march 2012, though not paid will be recorded as expenses for the year ended 31st March, 2012.

according to the concept of prudencee all anticipated losses should be accounted for and all anticipated profits should be ignored. So the inventory is valued at market price or costs whichever is lower. Thus valuing inventory at market price which is higher than the costs is violation if prudence concept.