Question
State meaning of Accounting Standards and explain the concept thereof.
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Answer
Accounting standards are written statements of uniform accounting rules & guidelines issuedby the accounting bodies like $ICAI$ to be followed while preparing and presenting the financialstatement. The rules, policies or guidelines started by accounting standards are usually for measurement, valuation and disclosure of accounting information in the financial statements. The rules, policies or guidelines stated by accounting standards are usually for measurement valuation and disclosure of accounting information in the financial statements.
- According to Kohlar, Accounting standards are a code of conduct imposed on accountants by custome, law and a professional body.
- In India, Central Government in consultation with the National Advisory Committee onAccounting Standards $(NACAS),$ on $16-2-2015$ to come in to force from $1-4-2015.$ Underthese rules, the companies as specified there in and their auditor shall comply with theIndian Accounting Standards $($Ind $AS)$ specified there in preparation of their financialstatements and audit respectively.
- Professional accounting bodies indentify areas of accounting where alternative and diversepractices are followed.
- Accounting standards recommends the practice out of diverse accounting practices thatare available or evaluates then in detailed to ascertain acceptability thereof.
- Accounting standards are prepared keeping in view the business environment and laws ofcountry. Therefore, when business environment or laws of country. Therefore when businessenvironment or laws change the accounting standards are to be revised.
- In case of conflict between the accounting standard and law, the law shall prevail.
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$2$ Goods sold for $₹ 5000$, the amount of which directly deposited in bank.
$4$ Furniture of $₹ 10,000$ is purchased, payment is made through cheque.
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$18$ Fire insurance premium $₹ 450$ and life insurance premium of $₹300$ are paid by cheque.
$22$ A cheque of dividend warrant of $₹ 200$ deposited in bank
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