CH 3 Theory Base of Accounting Notes
CH 3 Theory Base of Accounting Notes
Accounting Principles
Accounting statements disclose the profitability and solvency of business to
various parties. It is necessary to prepare such a statement in a standard
language following a standard set of rules and regulations. These rules are
known as “Generally Accepted Accounting Principles” or GAAP.
Systems of Accounting
Accounting Standards
Accounting standards are those written statements, which are issued from
time to time by the accounting professionals body, specifying uniform rules
or practices for the preparation of the financial statements.
Features of GST
1. It is a consumption based tax.
2. Burden can be shifted in respect of GST.
3. Taxpayers do not receive a direct pinch while paying indirect taxes.
4. It is regressive in nature and it promotes social welfare
5. It is levied on commodities and services.
Advantages of GST
1. Ease of doing business.
2. Reduce Tax Evasion.
3. Tax system becomes more clear, systematic and foreseeable.
4. Decrease in the cost of goods, since tax on tax is eliminated in the
GST regime.