Question

1. can we find VAT in the expenses of the income statement? explain your answer.

2. What does the principle of connection between accounting and taxation consist of?

3. Explain what the reverse-charge mechanism is and indicate a situation where you must apply it

4. Explain what the collected VAT on service delieveris is

5. What does IFRS stand for? Indicate which companies must comply with them.

Answer 1

Answer 1. VAT in Intome statement NAT shouln't be Indcluded in the Income stateront asa he Because VAT Registered person ultimately It collected from Cytomes, what he pays to governament. To doesn't ha ang bare any expenditure In his owne 2. Principle Connection between Accounting & taxation Accounting Acconting is keeping of Records such as saly & Puncham Income & Expenditures Recording of transactions on day to day basis ie Journal & Repaning financial statements. (ie Income statent & Balans Taxation; where Accouting ends, Taxation begins. on the basis of Income statement prepared baby managmut, Andito will calculate the tax liability of concern

3 Revese charge mechanism: while collecting Indirect taxy like VAT & GST Goods & service) ther teeper of changes will apply for any transactions i) forward change 1) Reverse change mechanism of int) Exemption. category. Foward change: - pobie under folwand change utimate liability for collecting & tara panying to governmut live with supplies. lie supplies will collect tax from Receipicut & pay to the government on applied Rate. Reves Change Mechanism: unden Revere charge mechanism, liability to collecto pay to gout lie with Receipient only. [supplies has no Brobligation] Exempted tax. under extempted transaction no need to collect tally Exempted from tax liability & is

4 VAT on services delivery VAT is levied on the value of Product (6) searvice at each stage of production, distribution (on sale to the Consumen. ultimate bunden to the consumes. In the total chain be fare senile (6) Product deliven to cytomes, Earlien paid fax related to VAT can claim as Input tax to remove cascading Effecto V VAT is Consumption band tax. 6 IFRS: IFRS Stands for International financial Repolting Stare o Issued by the International Accounting Standards Board IIRS Introducy for single set of global Accounting Stand It consid: Ifes financial staternits consist of: staternt of financial position Staternt of Comprehesive Income Statement of changes in Equity - statement of call lows.

compliance of IFRS: IERS were established to create a common Acconting language All listed Companiy hay to mandory on comply with IFRS (1) IAS disclosure Requirenitsa Some of the conteries Based on Turnover also made Compliance of IFRS disclosure requirents Mandalay.