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Accounting Interview Question- 2

1. What is statutory audit?

Answer: Statutory audit is done by chartered Accountants, to verify the financial statement's fairness and it is
done annually. It ensures that, to the best knowledge of the auditors, financial statements are free from any
misrepresentations and frauds.
2. What is internal audit?
Answer: An inspection and verification of the financial records of a company or firm by a member of its own
staff to determine the accuracy and acceptability of its accounting practices.
3. What is external audit?

ANSWER: a periodic examination of the books of account and records of an entity conducted by an independent
third party (an auditor) to ensure that they have been properly maintained, are accurate and comply with
established concepts, principles, and accounting standards, and give a true and fair view of the financial state of
the entity.
4. Explain The Difference Between Internal Audit And External Audit?

ANSWER: The internal audit is conducted to help the management. The weakness of the management is
disclosed. The external audit is conducted to help the shareholder. The rights of owners are protected. The
appointment of internal audit is made by the management. The appointment in external audit is made by the
shareholders. Internal audit is the part of internal control.

External audit is the not the part of internal control.The internal audit can suggest improvement in internal check
system. The external audit can not suggest improvement in internal check system. The internal audit can perform
his duties under the terms of appointment. The management can limit the scope of work at any time. The external
auditor can perform his work to terms of appointment and other prescribed law. The scope is very wide. Internal
audit is an employee of the company. He is not an independent person. External auditor is not an employee of the
Q: What do you mean by vouching?
Answer: Vouching is the process of checking the authentication of the voucher maintain by the management with
the respective supporting document
Q: Definition of audit?
Answer: An examination and verification of a company's financial and accounting records and supporting
documents by a professional, such as a Certified Public Accountant.
Q: What are Objectives of Internal Audit?
Answer: The purpose of internal audit is to keep proper control over business activities. When there is proper
control there is maximum efficiency. The internal auditor determines the degrees of control over work. The
purpose of internal audit is to evaluate the accounting system. It is concerned with checking proper authority for
transactions like purchase, retirement and disposal of fixed assets. The vouchers can be compared with entries in
order to determine that figures are facts.

The purpose of internal audit is to help the management. Internal auditor can point out the weakness. The internal
audit can be used as a tool to correct the situation. The management functions can be performed properly. The


purpose of internal audit is to review the working of business. The working of current tear can be reviewed in
detail just to note the successful area of working. There is a need to locate the weak points. The corrective
measures can be taken for proper working.
Q: Explain the difference between internal audit and statutory audit?

Answer: An internal audit is one which is conducted by the internal auditors of the company. It is not mandatory
for the company and the company just conducts it to keep a check on the operations of the company. On the other
hand statutory audit is very important because it is by the external auditors and it is mandatory for all kinds of
companies. Statutory audit is usually conducted for various purposes like tax regulatory requires it for taxation
Q: What is an audit process?

Answer: The word 'Audit' is a derivative of the word 'Audition' which means 'to hear'. In earlier times, the Kings
used to hear their accountants narrate the accounts verbally. However, as the complexity of the accounting
function grew, need was felt to thoroughly check the accounts for mistakes misclassification and document the
findings in a written form so that it can be used by the Management, stakeholders, investors, Government and
various other bodies. This process is known as Auditing or Audit.
Q: Functions of audit?

Answer: The function of internal audit is concerned with analysis of internal check. The internal audit can look
into the duties of each employee. All employees are provided jobs on the basis of their abilities. The auditor can
test the effectiveness of internal check. Thefunction of internal audit is examining the application of legal

The accounts are prepared under certain legal frame work. Verification of accuracy is a function of internal audit.
The accuracy of accounting books and records can be verified with the help auditing techniques. The audit
techniques include inspection, observation, inquiry, confirmation, computation and review. An auditor can check
the accuracy through these techniques.
Q: What is annual general meeting (AGM)?

Answer : AGM the statutory meeting of the directors and shareholders of a company or of the members of a
society, held once every financial year, at which the annual report is presented
Q: What is extraordinary general meeting (EGM)?

Answer: A meeting other than the annual general meeting between a company's shareholders, executives and any
other members. An EGM is Q : Rules surrounding the AGM

Answer : Most private companies are not required to hold an AGM. Public limited companies (plcs) must hold an
AGM within six months of their financial year end.

Companies can still hold an AGM if they choose to. As with other meetings, an AGM must be arranged if any
director asks for one with due notice, or if 5 per cent of the members request one. A company may also still need
to hold one in certain circumstances. For example, you must hold an AGM if you want to dismiss a director or
auditor before the end of their term, or if you are a public company with traded shares.

If the company does hold an AGM:

* You must send written notice to the directors and shareholders 14 days in advance (21 days in advance for
public companies with traded shares), unless your company articles state otherwise. An AGM can be held at
shorter notice if 90 per cent of members agree (95 per cent for plcs).
* You are no longer required to circulate copies of the company's accounts before an AGM. However, they must


be sent to members before they are due to be filed with the registrar of companies.
* Directors and shareholders can vote on the appointment of directors and auditors to the company (if required).
* Ordinary resolutions can now be passed by a simple majority and special resolutions require at least 75 per cent
of those eligible to vote in favor.
* You must file at Companies House any special resolutions passed at a meeting.usually called on short notice
and deals with an urgent matter.
Q: what is accounting?
Answer: The information system that identifies ,records, and communicates the economic events of an
organization to interested users
Q: definition of cash basis accounting?
Answer: An accounting method in which income is recorded when cash is received, and expenses are recorded
when cash is paid out.
Q: Definition of Accrual Basis accounting?
Answer: The most commonly used accounting method, which reports income when earned and expenses when
Q: what is capital expenditure?
Answer: Money spent to acquire or upgrade physical assets such as buildings and machinery. It also called capital
spending or capital expense.
Q: what is revenue expenditure?
Answer: All expenses incurred in running a business such as salaries, wages, rent, lighting, stationary etc. are
classed as revenue expenditure. Beside expense incurred in putting the fixed assets in proper order by repairs and
renewals are also revenue expenditures.
Q: What is Asset?
Answer: Assets are a companys resourcesthings the company owns. Examples of assets include cash, accounts
receivable, inventory, prepaid insurance, investments, land, buildings, equipment, and goodwill. From the
accounting equation, we see that the amount of assets must equal the combined amount of liabilities plus owners
(or stockholders) equity.
Q: what is Liabilities?
Answer: Liabilities are a companys obligationsamounts the company owes. Examples of liabilities include
notes or loans payable, accounts payable, salaries and wages payable, interest payable, and income taxes payable
Q: what is Owners or stockholders equity?
Answer: Owners or stockholders equity also reports the amounts invested into the company by the owners plus
the cumulative net income of the company that has not been withdrawn or distributed to the owners.
Q: definition of revenue?
Answer: this is the total amount of money received by the company for goods sold or services provided during a
certain time period.


Q: definition of expense?
Answer: Payment of cash or cash-equivalent for goods or services, or a charge against available funds in
settlement of an obligation as evidenced by an invoice, receipt, voucher, or other such document.
Q: What is depreciation?
Answer: A non-cash expense that reduces the value of an asset as a result of wear and tear, age, or obsolescence.
Most assets lose their value over time (in other words, they depreciate),
Q: What is income statement?
Answer: A financial statement that presents the revenues and expenses and resulting net income or net loss of a
company for a specific period of time.
Q: what is balance sheet?
Answer: A financial statement that summarizes a company's assets, liabilities and shareholders' equity at a
specific point in time.
Q: what is cash cow?
Answer: any business venture , operation, or product that is a dependable source of income or profit .
Q: definition of tax?
Answer: A fee charged ("levied") by a government on a product, income, or activity of an organization or person.
Q: What is direct tax?
Answer: In the general sense, a direct tax is one paid directly to the government by the persons or organization
(juristic or natural) on which it is imposed (often accompanied by a tax return filed by the taxpayer). Examples
include some income taxes, some corporate taxes, and transfer taxes such as estate (inheritance) tax and gift tax.
Q: What is indirect tax?
Answer: A tax, such as a sales tax or value-added tax, that is levied on goods or services rather than individuals
and is ultimately paid by consumers in the form of higher prices.
Q: what is Tax holiday?
Answer: A government incentive program that offers a tax reduction or elimination to businesses. Tax holidays
are often used to reduce sales taxes by local governments, but they are also commonly used by governments in
developing countries to help stimulate foreign investment.
Q: what is VAT?
Answer: Value Added Tax. A consumption tax which is levied at each stage of production based on the value
added to the product at that stage.
Q: What is income tax?

Answer: a tax levied on incomes, especially an annual government tax on personal incomes.


Q: What is internal rate of return (IRR)?
Answer: The internal rate of return (IRR) is a rate of return used in capital budgeting to measure and compare the
profitability of investments. It is also called the discounted cash flow rate of return (DCFROR) or simply the rate
of return (ROR)
Q: what is Net present value?
Answer: Net present value is an economic standard method for evaluating competing long-term projects in capital
Q: What is fair market value?
Answer: The price that an interested but not desperate buyer would be willing to pay and an interested but not
desperate seller would be willing to accept on the open market assuming a reasonable period of time for an
agreement to arise.
Q: what is hardware?
Answer: Hardware refers to a physical piece of a computer. This could be a hard drive, monitor, memory chip, or
CPU. The key idea is that the item is something you can touch. This compares to software which is not tangible in
any way. You can't pick it up or weigh it. Yet, without software, hardware is useless.

Typical examples of hardware include the computer you're using to view this page, the hard drive that has this
page stored on it, and the mouse you used to click on a link to bring you to this page.
Q: what is software?
Answer: Software is a general term for the various kinds of programs used to operate computers and related
devices. Software is not visible.
Q: What is internet?
Answer: a vast computer network linking smaller computer networks worldwide (usually preceded by the ). The
Internet includes commercial, educational, governmental, and other networks, all of which use the same set of
communications protocols.
Q: What is E-commerce?
Answer: E-commerce (electronic commerce or EC) is the buying and selling of goods and services on the
Internet, especially the World Wide Web. In practice, this term and a newer term, e-business, are often used
interchangably. For online retail selling, the term e-tailing is sometimes used.
Q: what is E-mail?

Answer: E-mail (electronic mail) is the exchange of computer-stored messages by telecommunication. (Some
publications spell it email; we prefer the currently more established spelling of e-mail.) E-mail messages are
usually encoded in ASCII text. However, you can also send non-text files, such as graphic images and sound files,
as attachments sent in binary streams.
SOME Elaborate:

ICAB - Institute of Chartered Accountants of Bangladesh.
ICMAB - Institute of Cost and Management Accountants of Bangladesh.


CIMA - Chartered Institute of Management Accountants
ICDDRB - International Centre for Diarrhoeal Disease Research, Bangladesh
NBR - National Board of Revenue
SEC - Securities and Exchange Commission
DSE - Dhaka Stock Exchange
CSE, - Chittagong Stock Exchange
FBCCI - Federation of Bangladesh Chambers of Commerce and Industries
GAAP - Generally Accepted Accounting Principles
RAM - Random-access memory
Some accounting bodies

IASB - International Accounting Standards Board.
FASB - Financial Accounting Standards Board .
ASB - Accounting Standards Board .
GASB - Governmental Accounting Standards Board .
Other organization & bodies

IFIC - International Federation of Accountants
AIA - Association of International Accountants
AAA - American Accounting Association
ICAEW - Institute of Chartered Accountants in England and wales
SAFA - South Asian Federation of Accountants
Some standards & principles

GAAP - Generally Accepted Accounting principles
BAS - Bangladesh Accounting Standards
IFRS - International Financial reporting Standards
FAS - Financial Accounting Standards (USA)
FRS - Financial reporting Standards (Uk)
Auditing standards & bodies

ISA - international Standards on auditing
IAASB - International Auditing and Assurance Standards Board
Professional degrees & organization

CA = chartered Accountant
ACA = Associate of Chartered Accountants
FCA = Fellow of Chartered Accountants
ICAB - Institute of Chartered Accountants of Bangladesh. these kinds of degree proved by Institute of Chartered
Accountants of Bangladesh(ICAB)
CPA = Certified Public Accountant
AICPA = American Institute of Certified public Accountant
Professional degrees & organization

CMA = Certified Management Accountants
ACMA = Associate of Certified Management Accountants
FCMA =fellow of Certified Management Accountants


Professional degrees & organization

CMA = Cost and Management Accountants
ACMA = Associate of Cost and Management Accountants
FCMA = Fellow of Cost and Management Accountants
ICMAB = Institute of Cost and Management Accountants of Bangladesh. Those kinds of degree provided by
Institute of Cost and Management Accountants of Bangladesh

CMA = Chartered Management Accountants
ACMA = Associate of Chartered Management Accountants
FCMA = Fellow of Chartered Management Accountants

CIMA = Chartered institute Management Accountants. those degree provided by Chartered institute Management
Professional degrees & organization

CAT = Certified Accounting Technician
ACCA = Associate of chartered Certified Accountants
FCCA = fellow of chartered Certified Accountants

ACCA = Association of chartered Certified Accountants. those degree provided by Association of chartered
Certified Accountants.
What is Financial Accounting?
Answer: The area of accounting concerned with reporting financial information to interested external parties.
Generally Accepted Accounting Principles (GAAP): Authoritative guidelines that define accounting practice
at a particular time.

Internal Revenue Service (IRS): A government agency that prescribes the rules and regulations that govern the
collection of tax revenues in the U.S.

Securities and Exchange Commission (SEC)S:
The government body responsible for regulating the financial reporting practices of most publicly owned
corporations in connection with the buying and selling of stocks and bonds.
Q : what is Intangible Assets ?

Answer: Intangible assets include patents, copyrights, trademarks, trade names, franchise licenses, government
licenses, goodwill, and other items that lack physical substance but provide long-term benefits to the company.
Companies account for intangible assets much as they account for depreciable assets and natural resources. The
cost of intangible assets is systematically allocated to expense during the asset's useful life or legal life, whichever
is shorter, and this life is never allowed to exceed forty years. The process of allocating the cost of intangible
assets to expenses.
Short notes:
Book value: total assets minus total liabilities. (See also net worth.) Book value also means the value of an asset
as recorded on the company's books or financial reports. Book value is often different than true value. It may be
more or less.


Breakeven point: the amount of revenue from sales which exactly equals the amount of expense. Breakeven
point is often expressed as the number of units that must be sold to produce revenues exactly equal to expenses.
Sales above the breakeven point produce a profit; below produces a loss.

Deferred income: a liability that arises when a company is paid in advance for goods or services that will be
provided later. For example, when a magazine subscription is paid in advance, the magazine publisher is liable to
provide magazines for the life of the subscription. The amount in deferred income is reduced as the magazines are
delivered is called amortization, and companies almost always use the straight-line method to amortize intangible
Return on investment (ROI): a measure of the effectiveness and efficiency with which managers use the
resources available to them, expressed as a percentage. Return on equity is usually net profit after taxes divided
by the shareholders' equity. Return on invested capital is usually net profit after taxes plus interest paid on long-
term debt divided by the equity plus the long-term debt. Return on assets used is usually the operating profit
divided by the assets used to produce the profit. Typically used to evaluate divisions or subsidiaries. ROI is very
useful but can only be used to compare consistent entities -- similar companies in the same industry or the same
company over a period of time. Different companies and different industries have different ROIs.
Variable cost: a cost that changes as sales or production change. If a business is producing nothing and selling
nothing, the variable cost should be zero. However, there will probably be fixed costs.

Working capital: current assets minus current liabilities. In most businesses the major components of working
capital are cash, accounts receivable, and inventory minus accounts payable. As a business grows it will have
larger accounts receivable and more inventory. Thus the need for working capital will increase.

Write-down: the partial reduction in the value of an asset, recognizing obsolescence or other losses in value.

Write-off: the total reduction in the value of an asset, recognizing that it no longer has any value. Write-downs
and write-offs are non-cash expenses that affect profits
Q: what is entry tax? Type of entry tax?
Entry tax is levied on that product which transfer or enter a product from-one state to another state or one District
to another district, if you sale as such the product not restructuring.

There is two types of entry tax are available
1) Entry on Motor Vehicles-- Motor Vehicles purchased in other state enters to a different State, then entry tax is
livable. THIS IS APPLICABLE ONLY FOR VEHICLES liable to be registered under Motor Vehicles Act. The
tax paid in other State can be compensated or set back of taken, if the rate of tax is higher in the State where the
vehicle is entering.

2) Entry Tax on goods--this has been recently strucked by the apex court in the case of Jindal Strips Ltd for the
reason that entry levied should be compensable otherwise it can be levied.
Imposition of Value Added Tax:

Imposition of VAT
(1) Value Added Tax is imposed and payable on
(a) taxable supplies; and
(b) taxable imports.

Amount of VAT payable
(2) The amount of VAT payable is calculated by multiplying the value of the taxable supply or import by the
VAT rate.
Example: If the value is taka 100 and the VAT rate is 15%, the VAT payable is 100 x 15% = taka 15.
VAT rate:


(3) The VAT rate for a taxable supply or import is
(a) if the supply or import is zero-rated, zero per cent;
(b) in any other case, 15 (fifteen) per cent.

Change of rate
(4) Where there is a change in the VAT rate, the rate to be applied is,
(a) for an import of goods: the rate applicable at the time the VAT becomes payable under section 24; or
(b) for a supply of goods, services, or immoveable property: the rate applicable at the time of supply.
Q: What is input tax?

Answer: Indirect tax (such as value added tax or VAT) levied on capital goods, raw materials, spare parts,
services etc., which a business consumes or uses in its operations.
Q: What is output tax?
Answer: Tax that a seller adds to a buyer's bill when they sell particular goods or services. At regular periods of
time, the total tax they have paid when buying goods and services themselves is taken away from the total output
taxes they have paid to arrive at a value-added tax figure that they must pay to the government
Q: what is tax deduction at source (TDS)?
Answer: Tax deducted at source is one of the modes of collecting Income-tax from the assesses. Such collection
of tax is effected at the source when income arises or accrues. Hence where any specified type of income arises or
accrues to any one, the Income-tax Act enjoins on the payer of such income to deduct a stipulated percentage of
such income by way of Income-tax and pay only the balance amount to the recipient of such income. The tax so
deducted at source by the payer, has to be deposited in the Government treasury to the credit of Central Govt.
within the specified time. The tax so deducted from the income of the recipient is deemed to be payment of
Income-tax by the recipient at the time of his assessment. Income from several sources is subjected to tax
deduction at source. Presently this concept of T.D.S. is also used as an instrument in enlarging the tax base. Some
of such income subjected to T.D.S. is salary, interest, dividend, interest on securities, winnings from lottery, horse
races, commission and brokerage, rent, fees for professional and technical services, payments to non-residents etc.
Q: What is bank reconciliation?
Answer: Analysis and adjustment of differences between the cash balance shown on a bank statement, and the
amount shown in the account holder's records. This matching process involves making allowances for checks
issued but not yet presented, and for checks deposited but not yet cleared or credited. And, if discrepancies
persist, finding the cause and bringing the records into agreement.
Q: what is Ratio Analysis?
Answer: A tool used by individuals to conduct a quantitative analysis of information in a company's financial
statements. Ratios are calculated from current year numbers and are then compared to previous years, other
companies, the industry, or even the economy to judge the performance of the company. Ratio analysis is
predominately used by proponents of fundamental analysis.
Q: what is trade discount?
Answer: a sum or percentage deducted from the list price of a commodity allowed by a manufacturer, distributor,
or wholesaler to a retailer or by one enterprise to another in the same trade.
Q: What is an irrecoverable debt?
Answer: A debt which is not expected to be paid.


Q: what is residual value?
Answer: The amount a company expects to be able to sell a fixed asset for at the end of its useful life.
Q: what is cost accounting?
Answer: a branch of accounting dealing with the classification, recording, allocation, summarization and
reporting of current and prospective costs and analyzing their behaviors. Cost accounting is frequently used to
facilitate internal decision making and provides tools with which management can appraise performance and
control costs of doing business.
Carriage inward: Occurs when a business has to pay for purchased goods to be delivered to its Premises.
Carriage Outward: Occurs when a business PAYS for sold goods to be delivered to its customers premises.
Q: what is Share?
Answer: A unit of ownership that represents an equal proportion of a company's capital. It entitles its holder (the
shareholder) to an equal claim on the company's profits and an equal obligation for the company's debts and
Two major types of shares are

(1) ordinary shares (common stock): which entitle the shareholder to share in the earnings of the company as and
when they occur, and to vote at the company's annual general meetings and other official meetings, and

(2) preference shares (preferred stock): which entitle the shareholder to a fixed periodic income (interest) but
generally do not give him or her voting rights.
Q: definition of trial balance?

Answer: The act of totaling debit balances and credit balances to confirm that total debits equal total credits.
Q: Definition of ledger.

Answer: A ledger contains summarized financial information that is classified by assignment to a specific account
number using a Chart of Accounts.
Q: definition of adjustment

1.Answer: increase or decrease to an account resulting from an adjusting journal entry. For example, the accrual
of wages at year-end will cause an increase in both salary expense and salary payable.

2. Answer: changing an account balance because of some happening or event. For example, a customer who
returns merchandise ill receive a credit adjustment to the account.
Q: definition of appreciation?

1. Answer: Increase in the value of an asset through a rise in market price, appraised value, or income earned, as
compared to an earlier period. The opposite is Depreciation.

2. Answer: Increase in the value of one currency vs. another, without any change in official value occurring. It
results from growth in market demand under floating exchange rates rather than official action such as a currency


Q: Difference between depreciation appreciations?

Answer: Appreciation and depreciation both deal with asset value over time. Some assets, such as real estate,
bonds, and homes gain value as time goes on. These assets are said to appreciate. Other assets, such as vehicles,
manufacturing plants, and office equipment lose value over time (depreciate). Appreciation/depreciation as a verb
is the process of increasing value. For instance, a piece of real estate might appreciate at 5% per year and a car
might depreciate 10% a year. De/Appreciation does NOT have to be linear. For instance, the moment you drive a
new car off the lot, it depreciates a considerable amount (say 10% of its value). The next year, though, the car
might only depreciate 5%. How one determines the rate of de/appreciation depends on your accounting rules. For
tax reasons, many companies have to abide by strict depreciation laws (For instance, it would be unreasonable to
depreciate a factory at 90% of it's value in one year because it would effects the company's profits and thus the
taxes that company pays).

For most consumers, de/appreciation is based on the market value of the asset. Back to the car example: the
moment a new car is driven off the lot, it loses a lot of its value because it is then consider a "used" car, so people
won't pay as much for it.
Q: what is fiscal year?

Answer: A 12-month period over which a company budgets its spending. A fiscal year does not always begin in
January and end in December; it may run over any period of 12 months. The fiscal year is referred to by the date
in which it ends.
Q: difference between fixed and variable costs?

Answer: Fixed costs are expenses whose total does not change in proportion to the activity of a business, within
the relevant time period. For example, a retailer must pay rent and utility bills irrespective of sales

Variable costs by contrast change in relation to the activity of a business such as sales or production volume. In
the example of the retailer, variable costs may primarily be composed of inventory (goods purchased for sale),
and the cost of goods is therefore almost entirely variable. In manufacturing, direct material costs are an example
of a variable cost.

Along with variable costs, fixed costs make up one of the two components of total cost. In the most simple
production function, total cost is equal to fixed costs plus variable costs.

Answer: The memorandum of association of a company, often simply called the memorandum (and then often
capitalized as an abbreviation for the official name, which is a proper noun and usually includes other words), is
the document that governs the relationship between the company and the outside. It is one of the documents
required to incorporate a company in the United Kingdom, Ireland, India, Bangladesh, Pakistan and Sri Lanka,
and is also used in many of the common law jurisdictions of the Commonwealth.
A Memorandum of Association (MOA) is a legal document prepared in the formation and registration process of
a limited liability company to define its relationship with shareholders. The MOA is accessible to the public and
describes the company's name, physical address of registered office, names of shareholders and the distribution of
shares. The MOA and the Articles of Association serve as the constitution of the company. The MOA is not
applied in the U.S. but is a legal requirement for limited liability companies in European countries including the
United Kingdom, France and Netherlands, as well as some Commonwealth nations.
Q: definition of Articles of Association?

Answer: A document describing the purpose, place of business, and details of a non-profit organization.


A document that specifies the regulations for a company's operations. The articles of association define the
company's purpose and lays out how tasks are to be accomplished within the organization, including the process
for appointing directors and how financial records will be handled.
Q: what kinds of terms included in Articles of Association?

The Articles can cover a medley of topics, not all of which is required in a country's law. Although all terms are
not discussed, they may cover:
The issuing of shares (also called stock), different voting rights attached to different classes of shares
Valuation of intellectual rights, say, the valuations of the IPR of one partner and, in a similar way as how we
value real estate of another partner.
The appointments of directors - which shows whether a shareholder dominates or shares equality with all
Directors meetings - the quorum and percentage of vote.
Management decisions - whether the board manages or a founder.
Transferability of shares - assignment rights of the founders or other members of the company do special
voting rights of a Chairman, and his/her mode of election.
The dividend policy - a percentage of profits to be declared when there is profit or otherwise
winding up - the conditions, notice to members.
Confidentiality of know-how and the founders' agreement and penalties for disclosure.
First right of refusal - purchase rights and counter-bid by a founder.
Q: definition of memorandum of agreement?

Answer: A memorandum of agreement (MOA) or cooperative agreement is a document written between parties to
cooperatively work together on an agreed upon project or meet an agreed objective. The purpose of an MOA is to
have a written understanding of the agreement between parties.

An MOA is a good tool to use for many heritage projects. It can be used between agencies, the public and the
federal or state governments, communities,
Q: definition of resident company?
Entity treated by the jurisdiction, in which it is registered or incorporated or conducts its business, as resident for
exchange control and/or tax purposes the individuals.
Q: definition of non-resident company?
Answer: That is incorporated in a jurisdiction as non-resident for tax purposes.
A company treated by the jurisdiction in which it is incorporated as non-resident for tax purposes or exchange
control purposes or both And MOA lays out the ground rules of a positive cooperative effort.
Q: definition of sales tax?

Answer :A sales tax is a consumption tax, usually paid by the consumer at the point of purchase, itemized
separately from the base price, for certain goods and services. The tax amount is usually calculated by applying a
percentage rate to the taxable price of a sale.
Q: definition of purchase tax?

Answer: A tax that is added to the price of goods sold in shops, but not on basic goods that people need to buy,
that the owner of the shop must pay to the government.


Q: definition of excise tax?

Answer: An indirect tax charged on the sale of a particular good.
An excise tax is a tax on use or consumption of certain products. Excise taxes are sometimes included in the price
of a product, such as motor fuels, cigarettes, and alcohol. Excise taxes may also be imposed on some activities,
like gambling. Excise taxes may be imposed by the federal government or by a state.
Levied on nonessential consumer goods and added to selling prices by retailers
Q: definition of use tax?

Answer: Use tax is levied when the products are purchased from a different state paying the sales tax to that state.
This tax compensates the state where the goods are finally put to use, the loss it has suffered because of the
purchase from a different state.