Master of Business Administration- MBA Semester 1Reg No.: 511011932
least it balances!)Adjusting entries – prepare and post accrued and deferred items to journals and ledger T-accountsAdjusted trial balance – make sure the debits still equal the credits after making the periodend adjustmentsFinancial Statements – prepare income statement, balance sheet, statement of retainedearnings, and statement of cash flows (this can occur at other points in time with appropriateadjustments)Closing entries – prepare and post closing entries to transfer the balances from temporaryaccounts (such as the revenue and expenses from the income statement to owner’s equityon the balance sheet).After-Closing trial balance – final trial balance after the closing entries to make sure debitsstill equal credits.
2. A. Bring out the difference between Indian GAAP and US GAAP norms?
Some of these major differences between US GAAP and Indian GAAP which give rise todifferences in profit are highlighted hereunder:1. Underlying assumptions: Under Indian GAAP, Financial statements are prepared inaccordance with the principle of conservatism which basically means “Anticipate no profitsand provide for all possible losses”. Under US GAAP conservatism is not considered, if itleads to deliberate and consistent understatements.2. Prudence vs. rules : The Institute of Chartered Accountants of India (ICAI) has beenstructuring Accounting Standards based on the International Accounting Standards ( IAS) ,which employ concepts and `prudence' as the principle in contrast to the US GAAP, whichare "rule oriented", detailed and complex. It is quite easy for the US accountants to handleissues that fall within the rules, while the International Accounting Standards provide ageneral framework of accounting standards, which emphasise "substance over form" for accounting. These rules are less descriptive and their application is based on prudence. USGAAP has thus issued several Industry specific GAAP , like SFAS 51 ( Cable TV), SFAS 50(Record and Music Industry) , SFAS 53 ( Motion Picture Industry) etc.3. Format/ Presentation of financial statements: Under Indian GAAP, financial statementsare prepared in accordance with the presentation requirements of Schedule VI to theCompanies Act, 1956. On the other hand , financial statements prepared as per US GAAPare not required to be prepared under any specific format as long as they comply with thedisclosure requirements of US GAAP. Financial statements to be filed with SEC include4. Consolidation of subsidiary companies: Under Indian GAAP (AS 21), Consolidation of
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