F1 Flashcards
What is direct tax
Paid to gov by person liable
What is indirect tax
Borne by one person but paid and collected by others
What is incidence of tax
Distribution of tax burden
What is formal incidence
Person with direct contact with tax authroity
What is actual incidence
Person who ends up bearing the costs
What is a tax base
Identifies what’s Subject to tax
What is hypothecation
Certain taxes devoted to certain expenditure
What is capital taxes?
Gains made on disposal of investments and other nc assets
What is unit taxes?
Based on number or weight of items
What is ad valorem taxes?
Based on value of items
What are benefits in kind?
Non cash benefits in lieu of cash payment
What is tax avoidance?
Tax planning to arrange affairs within the scope of the law to minimise tax liability
What is tax evasion
Illegal manipulation of tax system to minimise liability
What is balancing allowance
Tax loss on disposal
What is balancing charge
Tax profit on disposal
What is GAAP
Generally accepted accounting practices
Encompasses rules and procedures necessary to define accepted accounting practice
What are the ethical threats?
Self interest
Intimidation
Familiarity
Advocacy
Self review
What are the fundamental qualitative characteristics
Relevance
Faithful representation
What are the enhancing qualitative characteristics
Compatability
Verifiablity
Timeliness
Understandility
What are assets
Present economic resource controlled by entity as a result of a past event
What are historical costs
Price paid at acquisition
What is current value
Value at measurement date
What is IAS 1
Presentation of financial statements
What is the going concern
Entity considered to trade for the foreseeable future
What is IAS 16
Plant property and equipment
What is the cost model
Carrying amount = cost
What is revaultion model
Carrying amount = fair value
What is IAS 36
Impairment of assets
When carrying amount exceeds its recoverable amount
What is IFRS 5
Non current assets held for sale and discontinued operations
What is iFRS 16
Leases
What is a lease
Contract that concerns the right to use an underlying asset for a period of time in exchange for consideration
What is lease liability?
Present value of lease payment not yet made
What is IAS 2
Inventories
What is inventories value at
Lower of cost or net releasable value
What two methods are permitted in inventories?
FIFO and AvCO
What is IAS 7?
Statement of cash flows
What are the three cash flow groups
Operating activities
Investing activities
Financing activities
What is factoring
Outsourcing credit control department to third party
What is invoice discounting?
Invoices used as security against which the entity may borrow funds
What is a bank loan?
Contractual agreement for a specified sum loaned for a fixed terms at an agreed interest rate
What is documentary credit
Issued by bank on behalf of customer authorising supplier to withdraw amount from branches
What is working capital
Capital expenditure for conducting day to day operations of an org
What is the working capital cycle
Cash
Raw materials
WIP
Finished goods
Receivables
What is the current ratio
Measures how much of total current assets are financed by current liabilities
What is quick ratio
Measures how well current liabilities are covered by liquid assets
What is an aggressive policy
Reduced costs by holding low levels of assets
What is a Conservative policy
Reduces risk by holding high levels of cash
What is a moderate policy
Middle ground balance between cost and risk
What is economic order quantity
How many items should be ordered when order is placed
What is the optimum reorder level
How many items should be left in inventory when next order is placed
What is buffer stock
Stock you hold above and beyond the known demand
What is cash forecasts for?
Used to assess operating budgets, plan for cash shortages and surpluses, compare with actual spending
