Chapter: One

Introductory Aspects

1 | Page

1. INTRODUCTION:
A lot of miraculous change has taken place in the world due to an unimaginable development of
science and technology. To match up with the developing and changing situation of the global
society we have to build up our new generation as of international level. The world is changing
very fast towards the present reckless culture and so called progressive trend in the society is a
real threat to our upcoming generation. Saving the young generation from its severe degradation
and onslaught, education is a crying need of the society.
The growing educational institutions in the world as well as in Bangladesh, particularly creates a
need to develop an effective accounting information system that helps in data archiving,
analyzing, and classifying to be ready use database. This study aims to shed a light on the factors
that enhance the effectiveness of AIS in Sylhet Cambrian School and College. Due to rapid
technological changes there is a need for efficient information systems to organize and develop
the institutions. Information technology and information systems play a vital role in supporting
the activities of the institutions by providing these institutions by economic information and that
will help them in decision making, that make administration able to cope with problems of
competitiveness and increasing technological developments.
1.1 BACKGROUND OF THE STUDY:
The internship or project report is an essential part Bachelor of Business Administration (BBA).
It is required for every student to work in an organization or institution to enhance his/her
practical knowledge and experiences. For the requirement of my course I have prepared this
report and also learned many things through this report. I was assigned to prepare a report on
An overview of Accounting System: A Study on Sylhet Cambrian School and College
1.2 STATEMENT OF THE STUDY ISSUE:
The Accounting Information System of Cambrian School and College is not well-developed in
recording financial transaction & maintaining several books of accounts so, it is unable to fulfill
the end users need. Besides, there are Lack of awareness as to benefits of adopting sound
accounting practices and Adoption of different basis of accounting Current accounting practices
by Cambrian college vary from that on cash basis, accrual basis to a hybrid form of accounting
i.e. a mix of both cash and accrual basis of accounting. As a result of the above factors, the
existing accounting practices of the Cambrian school and college have the following
characteristics:
There is no standard basis of accounting being followed.
2 | Page

 There is lack of uniformity in presentation of financial statements.

There is no proper reporting, whereby end-use of earmarked or restricted funds can be

verified.
In view of the above, information provided by the financial statements rise confusion and
misunderstanding among the users of financial information in Cambrian school and college.
1.3 SIGNIFICANCE AND RATIONAL OF THE STUDY:
The Accounting Information Systems competency plays important role in the success of the
organization to achieve competitive advantage. Whereas AIS is competent, the organization will
achieve outstanding performance. The importance of this study lies in expanding the information
and effectiveness relevant to the accounting information system practiced in Sylhet Cambrian
School and College. This study will be helpful for the college staffs, management and
stakeholders to meet the AIS efficiency requirements.
1.4 OBJECTIVES OF THE STUDY:
This report is being prepared to reflect the learning about the Accounting Information System of
Cambrian School and College. The major and specific objectives of this report are given bellow:
1.4.1 Major Objectives:
To have An overview of the Accounting System: A Study on Sylhet Cambrian School
and College
1.4.2 Specific Objectives:

To conceptualized AIS at Cambrian college.

To identify the manual and computer based record keeping system.
To provide demo on primary books of accounts; receipt book, journal, ledger etc.
To show the uses & practices of Salary sheet, student ledger in Excel.
To know about the preparation of budget.
To expose the financial statements; income statement, balance sheet.
3 | Page

To identify the problem of AIS at Sylhet Cambrian College.

To recommend guideline for improving their AIS.

1.5 LIMITATION OF THE STUDY:

Though I have given utmost effort to prepare this paper, but there are some limitations of the
study. Such as are follows

This study covers only the accounting information system of Sylhet Cambrian School and
College.
Due to confidentiality, the schools policy restricts of disclosing some data.
In many cases up to date information is not published.
Unavailability of the reference book is another limitation.
Job leave is also a big limitation for collecting data.

1.6 METHODOLOGY:
This study has been made along the basis of experiences accumulated during the period of my
work.
In this study both primary and secondary sources were utilized.

1.6.1 Data sources:

This report is mainly based on primary data. Some sorts of secondary data are also used in this
context. These data are collected from various sources. Data collection sources are given below:
Primary data sources: The primary data have been collected from the Accounts office,
principal, teachers and responsible office staff by consulting and interviewing.

4 | Page

Secondary data sources: Sometimes, it was not possible to collect information from the primary
sources. In those cases collections of data are made from a wide range of accounting related
publications, including books, manuals, journals, prospectus and statements and various
documents maintained by the college, and also from the website of Sylhet Cambrian School and
College.

5 | Page

Chapter: Two
Literature Review

6 | Page

2. INTRODUCTION:
Accounting, or accountancy, is the measurement, processing and communication of financial
information about economic entities. It was founded by the Italian mathematician Luca Pacioli,
in the end of the 15th century. Accounting, which has been called the "language of business",
measures the results of an organization's economic activities and conveys this information to a
variety of users including investors, creditors, management, and regulators. Practitioners of
accounting are known as accountants. The terms accounting and financial reporting are often
used as synonyms.
2.1 HISTORY OF ACCOUNTING:
The history of accounting is thousands of years old and can be traced to ancient civilizations. The
early development of accounting dates back to ancient Mesopotamia, and is closely related to
developments in writing, counting and money; there is also evidence for early forms of
bookkeeping in ancient Iran, and early auditing systems by the ancient Egyptians and
Babylonians. By the time of the Emperor Augustus, the Roman government had access to
detailed financial information.
Double-entry bookkeeping developed in medieval Europe and accounting split into financial
accounting and management accounting with the development of joint-stock companies. In Italy,
it was published the first work on double-entry bookkeeping system by Luca Pacioli. Accounting
began to transition into an organized profession in the nineteenth century, with local professional
bodies in England merging to form the Institute of Chartered Accountants in England and Wales
in 1880.

2.2 MEANING & DEFINATION OF ACCOUNTING:

2.2.1 Meaning:
Accounting, as an information system is the process of identifying, measuring and
communicating the economic information of an organization to its users who need the
information for decision making. It identifies transactions and events of a specific entity. A
transaction is an exchange in which each participant receives or sacrifices value (e.g. purchase of
raw material). An event (whether internal or external) is a happening of consequence to an entity

7 | Page

(e.g. use of raw material for production). An entity means an economic unit that performs
economic activities.

2.2.2 Definition:
American Institute of Certified Public Accountants (AICPA) which defines accounting as the art
of recording, classifying and summarizing in a significant manner and in terms of money,
transactions and events, which are, in part at least, of a financial character and interpreting the
results thereof.
2.3 OBJECTIVES OF ACCOUNTING:
Objective of accounting may differ from business to business depending upon their specific
requirements. However, the following are the general objectives of accounting.

To keep a systematic record: It is very difficult to remember all the business

transactions that take place. Accounting serves this purpose of record keeping by
promptly recording all the business transactions in the books of account.
To ascertain the results of the operation: Accounting helps in ascertaining result i.e.,
profit earned or loss suffered in business during a particular period. For this purpose, a
business entity prepares either a Trading and Profit and Loss account or an Income and
Expenditure account which shows the profit or loss of the business by matching the items
of revenue and expenditure of the same period.
To ascertain the financial position of the business: In addition to profit, a businessman
must know his financial position i.e., availability of cash, position of assets and liabilities
etc. This helps the businessman to know his financial strength. Financial statements are
barometers of health of a business entity.
To portray the liquidity position: Financial reporting should provide information about
how an enterprise obtains and spends cash, about its borrowing and repayment of
borrowing, about its capital transactions, cash dividends and other distributions of
resources by the enterprise to owners and about other factors that may affect an
enterprises liquidity and solvency.

8 | Page

To protect business properties: Accounting provides upto date information about the
various assets that the firm possesses and the liabilities the firm owes, so that nobody can
claim a payment which is not due to him.
To facilitate rational decision making: Accounting records and financial statements
provide financial information which help the business in making rational decisions about
the steps to be taken in respect of various aspects of business.
To satisfy the requirements of law: Entities such as companies, societies, public trusts
are compulsorily required to maintain accounts as per the law governing their operations
such as the Companies Act, Societies Act, and Public Trust Act etc. Maintenance of
accounts is also compulsory under the Sales Tax Act and Income Tax Act.

2.4 IMPORTANCE OF ACCOUNTING:

Owners: The owners provide funds or capital for the organization. They possess
curiosity in knowing whether the business is being conducted on sound lines or not and
whether the capital is being employed properly or not. Owners, being businessmen,
always keep an eye on the returns from the investment. Comparing the accounts of
various years helps in getting good pieces of information.
Management: The management of the business is greatly interested in knowing the
position of the firm. The accounts are the basis; the management can study the merits and
demerits of the business activity. Thus, the management is interested in financial
accounting to find whether the business carried on is profitable or not. The financial
accounting is the eyes and ears of management and facilitates in drawing future course
of action, further expansion etc.
Creditors: Creditors are the persons who supply goods on credit, or bankers or lenders of
money. It is usual that these groups are interested to know the financial soundness before
granting credit. The progress and prosperity of the firm, to which credits are extended, are
largely watched by creditors from the point of view of security and further credit. Profit
and Loss Account and Balance Sheet are nerve centers to know the soundness of the firm.
Employees: Payment of bonus depends upon the size of profit earned by the firm. The
more important point is that the workers expect regular income for the bread. The
demand for wage rise, bonus, better working conditions, etc. depends upon the
profitability of the firm and in turn depends upon financial position. For these reasons,
this group is interested in accounting.

9 | Page

Investors: The prospective investors, who want to invest their money in a firm, of
course, wish to see the progress and prosperity of the firm, before investing their amount,
by going through the financial statements of the firm. This is to safeguard the investment.
For this, this group is eager to go through the accounting, which enables them to know
the safety of investment.
Government: Government keeps a close watch on the firms which yield good amount of
profits. The state and central Governments are interested in the financial statements to
know the earnings for the purpose of taxation. To compile national accounting is
essential.
Consumers: These groups are interested in getting the goods at reduced prices.
Therefore, they wish to know the established accounting which in turn will reduce to cost
of production, in turn fewer prices to be paid by the consumers. Researchers are also
interested in accounting for interpretation.

Research Scholars: Accounting information, being a mirror of the financial performance

of a business organization, is of immense value to the research scholar who wants to
make a study into the financial operations of a particular firm.
To make a study into the financial operations of a particular firm, the research scholar
needs detailed accounting information relating to purchases, sales, expenses, cost of
materials used, current assets, current liabilities, fixed assets, long-term liabilities and
share-holders funds which is available in the accounting record maintained by the firm.
End of a proper accounting control,

2.5 FUNCTION OF ACCOUNTING:

2.5.1 Record Keeping Function:
The primary function of accounting relates to recording, classification and summary of financial
transactions-journalisation, posting, and preparation of final statements. These facilitate to know
operating results and financial positions. The purpose of this function is to report regularly to the
interested parties by means of financial statements. Thus accounting performs historical function
i.e., attention on the past performance of a business; and this facilitates decision making program
for future activities.
2.5.2 Managerial Function:
10 | P a g e

Decision making program is greatly assisted by accounting. The managerial function and
decision making programs, without accounting, may mislead. The day-to day operations are
compared with some predetermined standard. The variations of actual operations with predetermined standards and their analysis is possible only with the help of accounting.
2.5.3 Legal Requirement Function:
Auditing is compulsory in case of registered firms. Auditing is not possible without accounting.
Thus accounting becomes compulsory to comply with legal requirements. Accounting is a base
and with its help various returns, documents, statements etc., are prepared.
2.5.4 Language of Business:
Accounting is the language of business. Various transactions are communicated through
accounting. There are many parties-owners, creditors, government, employees, etc., who are
interested in knowing the results of the business.

2.6 BASIC ACCOUNTING PRINCIPLES:

There are general rules and concepts that govern the field of accounting. These general rules
referred to as basic accounting principles and guidelinesform the groundwork on which more
detailed, complicated, and legalistic accounting rules are based. For example, the Financial
Accounting Standards Board (FASB) uses the basic accounting principles and guidelines as a
basis for their own detailed and comprehensive set of accounting rules and standards.
GAAP is exceedingly useful because it attempts to standardize and regulate accounting
definitions, assumptions, and methods. Because of generally accepted accounting principles we
are able to assume that there is consistency from year to year in the methods used to prepare a
company's financial statements. And although variations may exist, we can make reasonably
confident conclusions when comparing one company to another, or comparing one company's
financial statistics to the statistics for its industry. Over the years the generally accepted
accounting principles have become more complex because financial transactions have become
more complex.

11 | P a g e

Since GAAP is founded on the basic accounting principles and guidelines, we can better
understand GAAP if we understand those accounting principles. The following is a list of the ten
main accounting principles and guidelines together with a highly condensed explanation of each.
2.6.1 Business Entity Assumption:
The accountant keeps all of the business transactions of a sole proprietorship separate from the
business owner's personal transactions. For legal purposes, a sole proprietorship and its owner
are considered to be one entity, but for accounting purposes they are considered to be two
separate entities.
2.6.2 Monetary Unit Assumption:
The monetary unit principle states that only record business transactions that can be expressed in
terms of a currency. Thus, a company cannot record such non-quantifiable items as employee
skill levels, the quality of customer service, or the ingenuity of the engineering staff.
The monetary unit principle also assumes that the value of the unit of currency in which you
record transactions remains relatively stable over time. However, given the amount of persistent
currency inflation in most economies, this assumption is not correct - for example, a dollar
invested to buy an asset 20 years ago is worth considerably more than a dollar invested today,
because the purchasing power of the dollar has declined during the intervening years. The
assumption fails completely if an entity records transactions in the currency of a
hyperinflationary economy. When there is hyperinflation, it is necessary to restate a company's
financial statements on a regular basis.

2.6.3 Time Period Assumption:

This accounting principle assumes that it is possible to report the complex and ongoing activities
of a business in relatively short, distinct time intervals such as the five months ended May 31,
2014, or the 5 weeks ended May 1, 2014. The shorter the time interval, the more likely the need
for the accountant to estimate amounts relevant to that period. For example, the property tax bill
is received on December 15 of each year. On the income statement for the year ended December

12 | P a g e

31, 2013, the amount is known; but for the income statement for the three months ended March
31, 2014, the amount was not known and an estimate had to be used.
It is imperative that the time interval (or period of time) be shown in the heading of each income
statement, statement of stockholders' equity, and statement of cash flows. Labeling one of these
financial statements with "December 31" is not good enoughthe reader needs to know if the
statement covers the one week ended December 31, 2014 the month ended December 31, 2014
the three months ended December 31, 2014 or the year ended December 31, 2014.
2.6.4 Cost Principle:
From an accountant's point of view, the term "cost" refers to the amount spent (cash or the cash
equivalent) when an item was originally obtained, whether that purchase happened last year or
thirty years ago. For this reason, the amounts shown on financial statements are referred to as
historical cost amounts.
Because of this accounting principle asset amounts are not adjusted upward for inflation. In fact,
as a general rule, asset amounts are not adjusted to reflect any type of increase in value. Hence,
an asset amount does not reflect the amount of money a company would receive if it were to sell
the asset at today's market value. (An exception is certain investments in stocks and bonds that
are actively traded on a stock exchange.) If you want to know the current value of a company's
long-term assets, you will not get this information from a company's financial statementsyou
need to look elsewhere, perhaps to a third-party appraiser.
2.6.5 Full Disclosure Principle:
If certain information is important to an investor or lender using the financial statements, that
information should be disclosed within the statement or in the notes to the statement. It is
because of this basic accounting principle that numerous pages of "footnotes" are often attached
to financial statements.
As an example, let's say a company is named in a lawsuit that demands a significant amount of
money. When the financial statements are prepared it is not clear whether the company will be
able to defend itself or whether it might lose the lawsuit. As a result of these conditions and
because of the full disclosure principle the lawsuit will be described in the notes to the financial
statements.

13 | P a g e

2.6.6 Going Concern Principle:

This accounting principle assumes that a company will continue to exist long enough to carry out
its objectives and commitments and will not liquidate in the foreseeable future. If the company's
financial situation is such that the accountant believes the company will not be able to continue
on, the accountant is required to disclose this assessment.
The going concern principle allows the company to defer some of its prepaid expenses until
future accounting periods.
2.6.7 Matching Principle:
This accounting principle requires companies to use the accrual basis of accounting. The
matching principle requires that expenses be matched with revenues. For example, sales
commission expense should be reported in the period when the sales were made (and not
reported in the period when the commissions were paid). Wages to employees are reported as an
expense in the week when the employees worked and not in the week when the employees are
paid. If a company agrees to give its employees 1% of its 2014 revenues as a bonus on January
15, 2015, the company should report the bonus as an expense in 2014 and the amount unpaid at
December 31, 2014 as a liability. (The expense is occurring as the sales are occurring.)
Because we cannot measure the future economic benefit of things such as advertisements (and
thereby we cannot match the ad expense with related future revenues), the accountant charges the
ad amount to expense in the period that the ad is run.
2.6.8 Revenue Recognition Principle:
Under the accrual basis of accounting (as opposed to the cash basis of accounting), revenues are
recognized as soon as a product has been sold or a service has been performed, regardless of
when the money is actually received. Under this basic accounting principle, a company could
earn and report $20,000 of revenue in its first month of operation but receive $0 in actual cash in
that month.
For example, if ABC Consulting completes its service at an agreed price of $1,000, ABC should
recognize $1,000 of revenue as soon as its work is doneit does not matter whether the client
pays the $1,000 immediately or in 30 days. Do not confuse revenue with a cash receipt.

14 | P a g e

2.6.9 Materiality:
Because of this basic accounting principle or guideline, an accountant might be allowed to
violate another accounting principle if an amount is insignificant. Professional judgement is
needed to decide whether an amount is insignificant or immaterial.
An example of an obviously immaterial item is the purchase of a $150 printer by a highly
profitable multi-million dollar company. Because the printer will be used for five years, the
matching principle directs the accountant to expense the cost over the five-year period. The
materiality guideline allows this company to violate the matching principle and to expense the
entire cost of $150 in the year it is purchased. The justification is that no one would consider it
misleading if $150 is expensed in the first year instead of $30 being expensed in each of the five
years that it is used.
Because of materiality, financial statements usually show amounts rounded to the nearest dollar,
to the nearest thousand, or to the nearest million dollars depending on the size of the company.
2.6.10 Conservatism:
If a situation arises where there are two acceptable alternatives for reporting an item,
conservatism directs the accountant to choose the alternative that will result in less net income
and/or less asset amount. Conservatism helps the accountant to "break a tie." It does not direct
accountants to be conservative. Accountants are expected to be unbiased and objective.
The basic accounting principle of conservatism leads accountants to anticipate or disclose losses,
but it does not allow a similar action for gains. For example, potential losses from lawsuits will
be reported on the financial statements or in the notes, but potential gains will not be reported.
Also, an accountant may write inventory down to an amount that is lower than the original cost,
but will not write inventory up to an amount higher than the original cost
15 | P a g e

2.7 METHODS OF ACCOUNTING:

Business transactions are recorded in two different ways.

Single Entry
Double Entry

Single Entry:
It is an incomplete system of recording business transactions. The business organization
maintains only cash book and personal accounts of debtors and creditors. So the complete
recording of transactions cannot be made and trial balance cannot be prepared.
Double Entry:
It this system every business transaction is having a twofold effect of benefits, giving and
benefit receiving aspects. The recording is made on the basis of both these aspects. Double Entry
is an accounting system that records the effects of transactions and other events in at least two
accounts with equal debits and credits.

2.8 STEPS INVOLVED IN DOBUL ENTRY SYSTEM:

Preparation of Journal: Journal is called the book of original entry. It records the effect
of all transactions for the first time. Here the job of recording takes place.
Preparation of Ledger: Ledger is the collection of all accounts used by a business. Here
the grouping of accounts is performed. Journal is posted to ledger.
Preparation of Trial Balance: Summarizing. It is a summary of ledger balances
prepared in the form of a list.

16 | P a g e

Preparation of Final Account: At the end of the accounting period to know the
achievements of the organization and its financial state of affairs, the final accounts are
prepared.

2.9 BASES OF ACCOUNTING:

There are three bases of accounting in common usage. Any one of the following bases may be
used to finalize accounts.

Cash basis.
Accrual or Mercantile basis
Mixed or Hybrid basis.

2.9.1 Accounting on Cash basis:

Under cash basis accounting, entries are recorded only when cash is received or paid. No entry is
passed when a payment or receipt becomes due. Income under cash basis of accounting,
therefore, represents excess of receipts over payments during an accounting period. Government
system of accounting is mostly on cash basis. Certain professional people record their income on
cash basis, but while recording expenses they take into account the outstanding expenses also. In
such a case, the financial statements prepared by them for the determination of their income are
termed as Receipts and Expenditure Account.

2.9.2 Accrual Basis of Accounting or Mercantile System:

Under the accrual basis of accounting, accounting entries are made on the basis of amounts
having become due for payment or receipt. Incomes are credited to the period in which they are
earned whether cash is received or not. Similarly, expenses and losses are detailed to the period
in which, they are incurred, whether cash is paid or not. The profit or loss of any accounting
period is the difference between incomes earned and expenses incurred, irrespective of cash
17 | P a g e

payment or receipt. All outstanding expenses and prepaid expenses, accrued incomes and
incomes received in advance are adjusted while finalizing the accounts. Under the Companies
Act 1956, all companies are required to maintain the books of accounts according to the accrual
basis of accounting.

2.9.3 Mixed or Hybrid Basis of Accounting:

When certain items of revenue or expenditure are recorded in the books of account on cash basis
and certain items on mercantile basis, the basis of accounting so employed is called hybrid basis
of accounting. For example, a company may follow mercantile system of accounting in respect
of its export business. However, government subsidies and duty drawbacks on exports to be
received from government are recorded only when they are actually received i.e., on cash basis.
Such a method could be adopted because of uncertainty with respect of quantum, amount and
time of receipt of such incentives and drawbacks. Such a method of accounting followed by the
company is called the hybrid basis of accounting. In practice, the profit or loss shown under this
basis will not be realistic. Conservative people who prefer recognizing income when received but
cautious to provide for all expenses, whether paid or not prefer this system. It is not widely
practiced due to the inconsistency.

2.10 ACCOUNTING EQUATION:

As indicated earlier, every business transaction has two aspects. One aspect is debited other
aspect is credited. Both the aspects have to be recorded in accounts appropriately. American
Accountants have derived the rules of debit and credit through a novel medium, i.e., accounting
equation. The equation is as follows:
Assets = Equities
The equation is based on the principle that accounting deals with property and rights to property
and the sum of the properties owned is equal to the sum of the rights to the properties. The
properties owned by a business are called assets and the rights to properties are known as
liabilities or equities of the business. Equities can be subdivided into equity of the owners which
is known as capital and equity of creditors who represent the debts of the business know as
18 | P a g e

liabilities. These equities may also be called internal equity and external equity. Internal equity
represents the owners equity in the assets and external represents he outsiders interest in the
asset. Based on the bifurcation of equity, the accounting equation can be restated as follows:

Assets = Liabilities + Capital

(Or)
Capital = Assets Liabilities
(Or)
Liabilities = Assets Capital

The equation is fundamental in the sense that it gives a foundation to the double entry bookkeeping system. This equation holds good for all transaction and events and at all periods of time
since every transaction and events has two aspects.

2.11 KEY FIELDS OF ACCOUNTING:

Accounting has several subfields or subject areas, including financial accounting, management
accounting, auditing, taxation and accounting information systems.
2.11.1 Financial accounting:
Financial accounting focuses on the reporting of an organization's financial information to
external users of the information, such as investors, regulators and suppliers. It measures and
19 | P a g e

records business transactions and prepares financial statements for the external users in
accordance with generally accepted accounting principles (GAAP). GAAP, in turn, arises from
the wide agreement between accounting theory and practice, and change over time to meet the
needs of decision-makers.
Financial accounting produces past-oriented reportsfor example the financial statements
prepared in 2006 reports on performance in 2005on an annual or quarterly basis, generally
about the organization as a whole.
2.11.2 Management accounting:
Management accounting focuses on the measurement, analysis and reporting of information that
can help managers in making decisions to fulfill the goals of an organization. In management
accounting, internal measures and reports are based on cost-benefit analysis, and are not required
to follow GAAP. In 2014 CIMA created the Global Management Accounting Principles
(GMAPs). The result of research from across 20 countries in five continents, the principles aim
to guide best practice in the discipline.
Management accounting produces future-oriented reportsfor example the budget for 2006 is
prepared in 2005and the time span of reports varies widely. Such reports may include both
financial and nonfinancial information, and may, for example, focus on specific products and
departments.
2.11.3 Auditing:
Auditing is the verification of assertions made by others regarding a payoff, and in the context
of accounting it is the "unbiased examination and evaluation of the financial statements of an
organization".
An audit of financial statements aims to express or disclaim an opinion on the financial
statements. The auditor expresses an opinion on the fairness with which the financial statements
presents the financial position, results of operations, and cash flows of an entity, in accordance
with GAAP and "in all material respects". An auditor is also required to identify circumstances in
which GAAP has not been consistently observed.

20 | P a g e

2.11.4 Tax accounting:

Tax accounting helps clients follow rules set by tax authorities. It includes tax planning and
preparation of tax returns. It also involves determination of income tax and other taxes, tax
advisory services such as ways to minimize taxes legally, evaluation of the consequences of tax
decisions, and other tax-related matters.
Balance sheet items can be accounted for differently when preparing financial statements and tax
payables. For example, companies can prepare their financial statements implementing the firstin-first-out (FIFO) method to record their inventory for financial purposes, yet they can
implement the last-in-first-out (LIFO) approach for tax purposes. The latter procedure reduces
the current year's taxes payable.

21 | P a g e

Chapter: Three
Overview of Cambrian School and College

22 | P a g e

3. AN OVERVIEW OF SYLHET CAMBRIAN SCHOOL AND COLLEGE:

Sylhet Cambrian School and College is a promising, emerging and comprehensive educational
institution in Sylhet. It was established in 2010. Since then, this school has been preserving its
impression equally remarkable among the Educational institutions in Sylhet city.
In the present world standpoint of changing and complex global society because of revolutionary
advancement, mobility, science and technology, it requires much more competitive, skilled,
proficient and potential persons cope with this new dynamism and challenge.
With this goal in view, Sylhet Cambrian School and College has been established to take on the
duty of supplying modern and international standard education to its students.

3.1 PRESENT LOCATION:

At first, Sylhet Cambrian School and College started to operate from a temporary campus. After
six months, it has been moved into the permanent campus, located at Shubidbazar, Sylhet. This
location is free from all sorts of urban untidiness and has an education friendly atmosphere.

3.2 MISSION:
The mission is to provide career-oriented academic education and social challenges instilling the
skills and knowledge that prepare them for a lifetime of learning, they will need to succeed in
their lives.

3.3 VISSION:
The vision is to be the leader and to set a new benchmark for educational institutes in Sylhet city,
by serving excellent education through a bunch of devoted, proactive and skilled teachers.

3.4 CORE VALUES:

Cambrian School and College have some core values. This institution lies on the following core
values:

Integrity and honesty

Dependable and Reliable
23 | P a g e

 Self-discipline
Courtesy, care and assistance.
Passion and Perseverance.
3.5 UNIQUE FEATURES:
Sylhet Cambrian School and College has some unique features designed to cope up with the
emerging challenges and to meet up the educational demand of the students.

Wi-Fi covered 1st digital campus in Sylhet.

Modern and up-to-date curriculum with skilled and trained teachers.
No students have to hire privet tutor.
Semester wise curriculum.
Special care for weak students.
Financial aid for meritorious and poor students.
Rich library and modern study equipment.
Computer lab & English language club.
Residential facilities for the students.
Charming, education friendly & smoking and politics free atmosphere.
Regular meeting with guardian.

3.7 GENERAL POLICY AND PROCEDURES:

3.7.1 Code of conduct:
Sylhet Cambrian School and College is committed to providing a positive and constructive
learning environment for students that is free from harassment, discrimination or threatening
behavior. To maintain this environment, students also has responsibility to maintain a high
standard of behavior. These standards are included

Interact in a polite and respectful manner with all students and staff of the school at all
times.

Students must be committed to own studies and attend classes on time.

Take part actively and constructively during classroom activities, and complete all tasks
allocated to them.
24 | P a g e

Utilize the campus buildings and equipment in a careful and responsible way.

Notify College staff immediately if noticing any threat or danger to the safety of yourself
or others.

Smoking is strictly forbidden on the college campus.

Physical harassment unwelcome physical contact.

Verbal harassment making negative or offensive comments about students & other
teachers and staff of the school is prohibited; not only within the campus grounds but on
the internet or via telecommunications.

3.7.2 Fee & other payment policies:

The policy and rules regarding fee payment are given below. All payments should be made by
the due dates as indicated in the policy.
For existing students

Tuition is due on a monthly basis for every academic year.

A non-refundable yearly charge is applicable for each existing student every academic
year.

For new students

At the time of admission, the student needs to pay an admission fee.

All students admitted to the school need to pay a security deposit, which is non- interest
bearing and is refundable upon the student leaving the school.

3.7.3 Payment dates:

Monthly tuition fees should be paid by the 10th day of the following month. After the 10th day,
students will have to pay the tuition with an ascertained late fine.
3.7.4General Policy:

25 | P a g e

A student name may be cancelled from the enrollment list if any rules and regulation of
the schools are violated.
The school will process the school Leaving From automatically in the following
circumstances:
If the is absent from school for a long period.
If the student/parent does not pay the relevant fees.
No progress report or transfer certificate will be given unless the student has cleared all
dues.

3.7.4 Transfer policy:

Transfer certificate, transcript and letter of reference, etc. will be issued only upon submission of
written application. The minimum time for completing the procedure is ten five working days.
Certificates and mark sheet are issue to the students only.

3.8 GOVERNING BODY:

Chairman

Professor (Dr.) Mahmud Miah.

Professor of Management, MM College, Sylhet.

Vice-Chairman

Shibbir Ahmed Osmani

Members

Mr.Rizwan Mujtaba.
Mr.Md. Anisur Rahman.
Mr.Monwar Hossain.
Mr.Foyez Ahmed Chowdhury.

3.9 ORGANIZATIONAL STRUCTURE:

26 | P a g e

Board of trustee

Chairman

Vice- Chairman

Principle
Administration

3.10 TEACHING STAFF & OFFICE STAFF:

A team of well trained, efficient and dedicated with excellent character has been employed who
look after the welfare of the talents with very cordial, parental and motherly affection in teaching
lessons. Here the teachers are generally graduate or post-graduate degree holders in respective
subjects form well-reputed institutions. By the love, affection and proper guidance of the
members of the faculty, the students will not only accumulate institutional education, but will
also acquire Islamic value, human qualities and they will practice the culture for moral
development.
In service training for teachers is very important function of our management personnel. Since
the school uses a curriculum that has been tailored to its vision and needs, specialized training is
necessary to ensure proper implication of the curriculum.
The schools faculty development program includes:

27 | P a g e

Effective teaching methods.

Classroom management strategies
Managing students of different classes & ages.

3.11 ACADEMIC ACTIVITIES:

3.11.1 Curriculum:
Sylhet Cambrian School and college has developed its own curriculum; that aims to deliver a
holistic education program containing the core competencies of the national curriculum. With
this end view semester system started to maintain in the college curriculum. The curriculum of
Sylhet Cambrian School and college is systematic, well thought-out and balanced document.
Sylhet Cambrian School and colleges lays the preparatory groundwork that encompasses the
discipline necessary for well-rounded and balanced education. Students are given opportunity to
excel all stages of their academic life, regardless of their choice of career paths.
3.11.2 Teachers Evaluation:
The teachers of this school are evaluated in various ways. The principle often observes class
teaching in order to understand the performance of the teachers; he discusses about the lapses
with the teachers and provides them necessary suggestions for improvement. During inspection,
the school coordinator observes the classroom delivery strategies, use of teaching materials, etc.
and takes notes. He also shares his observations with the teachers at the end of classes. For
evaluation of the teachers the principle or vice principle often attends the classrooms and assess
the students by asking questions from previous lesson, indeed they do it for evaluating the
teachers as well. If the students can answer the questions correctly, they consider it as good
performance of the teachers.
3.11.3 Management of Low Achievers:
As the students of this school don not have to admit in coaching center or private tutors, it's the
teacher's responsibility to take care of the weaker students. Teachers identify weak students
during classroom teaching and then provide extra classes for the weak students after the official
class hours. Every month, the principle and the teachers meet with the parents of weak students
to make them aware of their childrens education. Teachers general advice to the parents; is to
28 | P a g e

take extra care of their childrens study at home. The teachers often divide the learners into
groups- putting both weak and good students in a group and allowing them to discuss the lessons
taught. This is helpful for the weaker students to learn from good students.
3.11.4 Annual Examination:
The teachers help the students take necessary preparation for the annual examination- revision of
the whole syllabus few weeks before the examination before the examination is significant.
During the examination seating arrangement is done mixing the students of various classes,
which does not allow the students to see each other paper. While explaining the question, the
teachers almost indicate the answer. For example, the question paper the students were asked to
identify the even numbers, however, all of them circled all the number given. Noticing the matter
one teacher explained them about odd and even numbers, so that all the students can answer
correctly.
3.11.5 Class Hours:
From 8.00 AM to 2.00 PM
(Class VI to X)
From 8.00AM to 12.50 PM
(Class XI to XII)

3.11.6 Holidays:
The institution remains close on Friday and Saturday. In addition, there are government holidays
and vacations as per Academic Colander prepared by the college authority.
3.11.7 Admission:
New admission is started from January to March each year and is subject to seats available.
Notice for admission to the New Session is put in December. Application forms are to be
29 | P a g e

collected from the school office through personal contact from 8 AM to 2 PM. on all days except
Friday and Saturday. Fee of the application form and prospectus is TK. 200/= (two hundred)
only. Application from dully filled in along with required number of photograph are to be
submitted. Students will be scrutinized for admission through the test of the merits. For this, of
course, previous results, conduct, character, qualities, etc. will be taken into consideration. At
higher secondary level minimum GPA of 3 out of 5 is required to admit in class XI. Transcripts
and other relevant documents are required to be submitted by the applicants.
3.11.8 Fees and other Charges:
Fees and other charges for the students are given below:

Fees

TK.

Admission fee

2,500/=

Semester Fee (Per semester)

4,000/=

Tuition Fee (Monthly)

1,000/=

T.C/ School certificate

300/=

Application form and prospectus

200/=

3.11.9 Residential Facilities:

For the students whose guardians/parents are living abroad and for the students of distant/remote
places residential facilities with arrangement of guiding and teaching are available here.

Fees

TK.

Admission fee

2,000/=

Security money (Refundable)

10,000/=

Food (Monthly)

5,000/=
30 | P a g e

3.12 FACILITIES AND SERVICES:

3.12.1 Library:
Every campus has a school library from which students may borrow regularly or conduct
research. There are video recorders and projector that emphasis on providing audiovisual
learning opportunities for the student to reinforce academic knowledge.
Sylhet Cambrian School and College maintain a rich library in its campus. With over 1500 books
and audiovisual resources, the library provides attractive facilities for the students. The school
library supports and enhances the educational goals. The library books afford programs and
resources to develop and sustain in students habit of reading and learning and use of library
throughout their lives. It also provides access to resources, recreation books, information and
material to support all educational programs and develop a love for learning.
3.12.2 IT Lab:
To keep with the challenges and advancement of the 21st century the young learners of our
country is to be trained in the elementary use of computers from the very beginning. As such,
Sylhet Cambrian School and college has made computer education compulsory for every
student. The practical classes and the lab itself are designed to ensure continuous monitoring of
students work, while the computers are well-equipped to meet course requirements.
3.12.3 Security and Health:
Sylhet Cambrian School and college takes safety and security very seriously. The school already
has numerous policies and procedure in place to ensure the safety of students. It is now taking
extra steps to further enhance the security, including tightening rules on visitors to campus,
security checks during events, improving infrastructure such as metal detector and setting up a
committee to monitor security protocol regularly. We request all parents and students to
cooperate with our staff to help maintain security and safety on campus at all time.
To enforce day to day safety & security within the campus the following steps are taken:

A group of trained and experienced individuals have been engaged to ensure round the
clock security in the campus.
31 | P a g e

The use of ID cards is compulsory for all employees and students.

Visitors/guests are confirmed through prior appointments.
Teachers with first aid training or medical qualifications are available to provide medical
assistance to students in case of emergencies and accidents. All faculties go through first
aid refreshment training on an annual basis.

3.12.4 Cafeteria:
There is a cafeteria available at the school campus for the students and teachers. All types of
snacks, drinks, chips are available and all these are hygienic. So there is no need to go outside,
students can easily get their tiffin from this cafeteria.
3.12.5 Science Lab:
In a world filled with the product of science, scientific literacy has become a necessary for
everyone. We all need to integrate scientific information into our everyday life choices. Scientific
literacy is also gaining importance in the workplace. Considering these dynamic changes and
science oriented global needs Sylhet Cambrian School and college developed their science lab
with modern facilities and equipment.
3.13 EVENTS AND EXTRA CURRICULUM ACTIVITY:
Throughout the year, students participate in various events and cultural presentations, such as art
exhibition, fairs, competitions, as well as events that commemorate our cultural and national
heritage, including International mother language day, Independence Day, Victory day and
Pahela Baishakh. National and cultural events are observed with proper dignity and festivity to
create awareness of our rich cultural heritage. Students learn to prepare, perform and express
themselves through such events. Students can land a role on stage or behind the scenes in a
comedy or tragedy or musical.

32 | P a g e

Chapter: Four
Accounting System of Cambrian School and
College

33 | P a g e

4. ACCOUNTING INFORMATION SYSTEM OF SYLHET CAMBRIAN SCHOOL &

COLLEGE:
Accounting information system is generally a computer-based method for tracking accounting
activity in conjunction with information technology resources. It combines traditional accounting
practices such as the Generally Accepted Accounting Principles (GAAP) with modern
information technology resources. Accounting Information System may be either manual or
electronic (computerized). It can be a very simple paper-and-pencil based manual system, a very
complex system using the very latest in computers and information technology, or somewhere
these two extremes. Regardless of the approach taken, the process is the same.
Sylhet Cambrian School and College maintains both the manual and computerized systems to
record financial data and supply information to its directors or managers. Using both manual and
electronic (computerized) record keeping system has some advantages. These are:
Electronic record keeping system

Making it easier to capture information.

Generate reports and meet legal reporting requirements.

Conversely, manual record keeping system

A simple paper-based record keeping system.

Less expensive.

Easier to correct entries.

Less risk of corrupted data or data losses.

To capture the two systems attributes and to secure the recorded information by making backup
of each system against others, Cambrian School and College maintains both manual and
computerized record keeping system. Manually maintained books are: Voucher, ledger, journal,
cash book etc. combination of both forms are used to: prepare financial statements, budget,
student ledger, and salary sheet.

34 | P a g e

4.1 ACCOUNTING BASIS:

Cambrian school and college ueses the modified accrual basis of accounting. The modified
method does not conform to GAAP. That consist the elements of both the cash basis and accrual
basis of accounting. Thus the modified basis:

Records short-term items when cash levels change (the cash basis). This means that
nearly all elements of the income statement are recorded using the cash basis.

Records longer-term balance sheet items with accruals (the accrual basis). This means
that fixed assets and long-term debt are recorded on the balance sheet, and depreciation
and amortization in the income statement
4.2 ACCOUNTING PERIOD:
An accounting year is almost always a period of twelve months, but it does not necessarily have
to follow the beginning and end of the twelve month calander year. Organizations can choose to
have accounting year periods that end on any date. For most businesses however, the fiscal year
does run from January 1st through December 31st.
Cambrian School and College uses 12 months accounting period, which is started from July 1 to
June 30 of each year.
4.3 ACTIVITIES PERFORMED BY THE ACCOUNTS:

35 | P a g e

The primary responsibility of the Cambrian School and Colleges Account section is to gather
financial information of the School including vouchers, invoices, bank statements, and other
relevant information. Source documents are the evidence that the financial transaction has
occurred and include such things as receipts and invoices. These information or documents are
generated from the primary operations of the School. Accounts office also has the responsibility
of maintaining several books of accounts and preparation of periodic financial reports. The
accountant also authorizes certain payments such as salaries, wages or a purchase and is allowed
to collect tuition fees directly from the students.
So the major activities of Account section can be categorized into- Bookkeeping, preparing
financial statements, preparing budget, others record keeping books.
Bookkeeping includes:

Voucher
Receipt book
Petty cash book
Journal.
Ledger

Preparing Financial Statements includes:

Balance sheet.
Income statement.

Preparing budget & other record keeping books:

Budget.
Student ledger.
Salary sheet.
4. 5 BOOKKEEPING:
Bookkeeping involves the recording of a company's financial transactions. The transactions will
have to be identified, approved, sorted and stored in a manner so they can be retrieved and
presented in the company's financial statements and other reports.
Cambrian School and College maintains double-entry bookkeeping- an accounting technique
which records each transaction as both a credit and a debit. Credit entries represent the sources of
36 | P a g e

financing, e.g. tuition fees, bank loans, directors investment and the debit entries represent the
uses of that financing, e.g. office supplies, rent and repair & maintenance costs .Since each credit
has one or more corresponding debits (and vice versa).
Practicing of bookkeeping includes maintaining several books. Books of account should be
maintained following the rules of Double Entry Book Keeping System and generally accepted
accounting practices prevailing in Bangladesh. Cambrian School and College should maintain
proper books of account with respect to:

All sums of money received by the School and the matters in respect of which receipts
take place, showing distinctly the amounts received from income generating activities
and through grants and donations;
All sums of money expended by the school and the matters in respect of which
expenditure takes place;

Cambrian School and College generally maintains the following books of account:

4.5.1 Voucher
Voucher is used as a written instrument that serves as witness for transaction. Commonly,
voucher shows cash distribution authorization by school accounts like checks, invoice approvals,
receiving reports, purchase of goods, and authorize payment. Vouchers indicate the ledger
account in which these transactions have to be recorded.
4.5.2 Receipt Book
A receipt book is quite cheap and can be bought from local stationery store .Cambrian School
and College uses the receipts book; where all cash that has been received by the school accounts
are recorded. Cash receipts and payments are a primary entry that runs the rest accounting
system. The paperwork trail that starts with the receipt book is summarized into other books,
such as Schoolss general ledger and cash-flow statements.

37 | P a g e

4.5.3 Petty Cash Book:

The petty cash book is a formal summarization of petty cash expenditures, sorted by date. Petty
cash book is an actual ledger book, rather than a computer record. Thus, the book is part of a
manual record-keeping system. Small Expenses incurred by the College or by the employees are
submitted to the accounts section in the form of bills and the accounts, then pay the bills as well
as record these expenses in petty cash book. Fundamental difference between the main Cash
Book and the Petty Cash Book is that only petty (small) expenses are recorded in the Petty Cash
Book. The accountant usually makes two primary types of entries in the petty cash book, which
are a debit- to record cash received by the petty cash clerk and a large number of credits-to
reflect cash withdrawals from the petty cash fund. These credits can be for such transactions as
payments for bills, office supplies, and print and photocopy and so forth.
Sample Petty Cash Book:
Amount
Received in
tk.
400

Date

Particulars

V. No.

Total

Traveling
Expenses

120

120

2014

Cash Received

Jun. 2

Taxi A/c

Jun. 3

Postage A/c

80

Jun. 3

Stationery A/c

50

Jun. 3

Postage A/c

35

Jun. 4

Repairs A/c

72

357
Balance c/d

400

Postages

Stationery

Office
Expenses

80
50
35
72

120

135

50

72

43

400

4.5.4 Cash Book:

A cash book is the subsidiary ledger in which all cash receipts and cash payment transactions are
stored. All cash receipts and payments, including bank deposits and withdrawals by the school
are contained in the cash book. It acts as the primary repository of cash-related information for
the school authority. The information in a cash book is entered in chronological order, which
makes it easier to find out the transactions at a later date, it is also periodically aggregated and
posted to the schools general ledger. The cash book is routinely compared to the bank's records
to ensure that the information in the book is correct. Cash book can be used as a reference during
38 | P a g e

auditing of the school; hence it gives evidence to the auditors while they go through the books of
account.
Sample Cash Book:

Dr
Date Particulars

Cr
L.F

Cash
(TK)

Bank
(TK)

2006

L.F

Cash
(TK)

Bank
(TK)

2006

Dec1 Balanceb/d
6 Sales

10,500

Dec1 Balanceb/d

10,000

4 wages

9 Cash

5,000

15 Cash

4,000

25 Mr.Alam

Date Particulars

1,500

9 Bank

9,500
400
C

5,000

13 Purchases
15 Bank

6,000
4,000

4.5.5 Journal:
Journals are also called 'books of first entry' or 'books of original entry'.
As Cambrian maintains double-entry bookkeeping system, it essential to have a business diary
in which all financial data pertaining to the day to day transactions of the school is recorded
using double-entry bookkeeping system. In journal debit and credit changes caused by each
transaction in individual ledger-accounts are subsequently then posted in the school's general
ledger.

Sample Journal:

39 | P a g e

4.5.6 General Ledger:

Ledger is organization's main accounting records.
Ledger is maintained to hold account information that is needed to prepare financial statements
of the School and includes accounts for assets, liabilities, owners' equity, revenues and expenses.
Assets include supplies of the School and cash owned by the School accounts. Liabilities include
outstanding debt of school owes to its directors or investors. Income includes the amount of
money generated by running the School. Expenses are the cost of paying rent, salary of
employees, advertising and other related costs. The accounts of Cambrian college maintains
general ledger typically in a registry book that employ the double-entry bookkeeping method where each financial transaction is posted twice, as both a debit and a credit, and where each
account has two columns. Because a debit in one account is offset by a credit in a different
account, the sum of all debits will be equal to the sum of all credits.
Sample General Ledger:

40 | P a g e

4.6 PREPARING FINANCIAL STATEMENTS:

Preparing general-purpose financial statements; including the balance sheet, income statement,
statement of retained earnings, and statement of cash flows; is the most important step in the
accounting cycle because it represents the purpose of financial accounting. In other words, the
concept financial reporting and the process of the accounting cycle are focused on providing
external users with useful information in the form of financial statements. These statements are
the end product of the accounting system in any company.
The major financial statements prepared by the Cambrian School and College are discussed as
follows:
4.6.1 Income Statement:
People pay attention to the profitability of a company for many reasons. For example, if a
company was not able to operate profitablythe bottom line of the income statement indicates a
net lossa banker/lender/creditor may be hesitant to extend additional credit to the company.
On the other hand, a company that has operated profitablythe bottom line of the income
statement indicates a net incomedemonstrated its ability to use borrowed and invested funds
in a successful manner. A company's ability to operate profitably is important to current lenders
and investors, potential lenders and investors, company management, competitors, government
agencies, labor unions, and others.

41 | P a g e

The format of the income statement or the profit and loss statement will vary according to the
complexity of the business activities. However, most companies will have the following
elements in their income statements:
Revenues and Gains

Revenue from primary activities.

Revenues or income from secondary activities

Gains (e.g., gain on the sale of long-term assets, gain on lawsuits)

Expenses and Losses

Expenses involved in primary activities

Expenses from secondary activities.

Losses (e.g., loss on the sale of long-term assets, loss on lawsuits)

Cambrian School and College

Income Statement
For the period of Dec14
Income
Particulars
Income from Operations:
Admission Fees
Session Fees
Monthly fees
Other fees & Admission form
Hostel fees
Total Operating Income
Income from other activities:
Donations

Sub Total

Total

Grand Total

184,000
702,400
1,565,000
86,200
72,550
2610,150
50,000

42 | P a g e

Selling of old furniture

Total Others Income
A. Total Income

32,850
82,850
2,693,000

Expenditure
Particulars
Sub Total
Staff payment & Academic expenses:
Salary
Board fees
Legal fees
Laboratory expenses
Study tour, Sports & culture
Seminar/Workshop
Stipend/means-cum-merit scholarship
Administrative and General expenses:
House rent
Advertisement
Furniture
Repairs & Maintenance
Electricity
Stationary
Internet & Telephone bills
Entertainment
Travelling
Water bills
Conveyance
Total operating expenses
Other expenses:
Bank charges
Provision for Bad and Doubtful Debts
Total other expenses
B. Total Expenditure
C. Net Income(Loss) [A-B]

Total

Grand Total

885,820
10,000
10,000
18,450
9,500
52,000
10,000
304,000
85,755
82,400
18,775
15,840
36,843
48,337
5,900
2,500
3,600
7,080
1,606,800
14,850
-14,850
1,621,650
1,071,350

Discussion:
The above stated income statement was prepared for Cambrian school and college in 2014.
Basically income statement shows how much money the school generated (revenue), how much
it spent (expenses) and the difference between the two (profit) over a certain time period. When
it comes to analyzing fundamentals, the income statement lets the investors/ directors of the
school know how well the school is performing - or, basically, whether or not the school is
making money.

43 | P a g e

There are several segments that represent all the money brought in during a specific time period.
Here in this income statement, the sources of income are divided into: income from operations
and income from other activities. Income from operations includes: Fees and charges collected
from the students during the specific period and income other activities includes: donations,
selling of old furniture etc. The sum amount of these two segments equals the total income. As
like income; there are several segments in expenditure. These segments are from primary
activities or academic expenses, administrative and General Expenses, other expenses etc. All
these segments comprises of the total expenditure. And the basic equation used to determine the
Net Income is Revenue Expense.

4.6.2 Balance sheet:

As like many other large and small organizations, the balance sheet is one of the major financial
statements used by accountants and business owners. It is also referred to as the statement of
financial position. The balance sheet presents a organization's financial position at the end of a
specified date. Some describe the balance sheet as a "snapshot" of the company's financial
position at a point (a moment or an instant) in time. For example, the amounts reported on a
balance sheet dated December 31, 2014 reflect that instant when all the transactions through
December 31 have been recorded.
A balance sheet lays out the ending balances in a company's asset, liability, and equity accounts
as of the date stated on the report. The most common use of the balance sheet is as the basis for
ratio analysis, to determine the liquidity of a business. Liquidity is essentially the ability to pay
one's debts in a timely manner. The information listed on the report must match the following
formula:
Total assets = Total liabilities + Equity
The balance sheet is one of the key elements in the financial statements, of which the other
documents are the income statement and the statement of cash flows. A statement of retained
earnings may sometimes be attached.
Cambrian School and College
Balance sheet
For the period of Dec14
ASSETS

Amount in TK.

Current Assets:
44 | P a g e

Cash at Bank
Accounts Receivable-Advance to Mr. Sadek for Registration purpose
Prepaid Expenses- House rent Advance
Total Current Assets

1150,120
280,000
50,000
1480,120

Fixed Assets:
Furniture & Fixtures
Computer & Equipment
Books & Lab Equipment
Total Fixed Assets
Total Assets

341,454
210,102
35,774
687,330
2,067,450

LIABILITIES & OWNERS EQUITY

Current Liabilities:
Accounts Payable Mr. Monwar Hossain
Loans from Mr. Sibbir
Accrued House rent
Accrued Legal fees
Total Current Liabilities

292,890
281,810
90,000
10,000
674,700

Long-term Liabilities:
Bank loan
Notes payable
Total Long-term Liabilities:
Total Liabilities

--250,000
--250,000
924,700

Owners Equity:
Mr. Sibbir Ahmed
Mr. Rizwan Mujtaba
Mr. Monwar Hossain
Mr. Foyez Ahmed Chowdhury
Retained earnings
Total Owners Equity
Total Liabilities & Owners Equities

182,000
130,550
100,000
100,000
630,200
1,142,750
2,067,450

Discussion:

45 | P a g e

The above stated income statement was prepared by Cambrian school and college for the year
ended2014.There is three main components of this balance sheet: assets, liability and owners
equity. Carefully analyzed, it can tell a lot about the Colleges fundamentals.
Assets:
In this balance sheet there are two main types of assets: current assets and non-current assets.
Current assets are likely to be used up or converted into cash within one business cycle - usually
treated as twelve months. Two very important current asset items found on this balance sheet are:
cash, and accounts receivables. Noncurrent assets or fixed assets are: furniture & fixtures,
computer & equipment etc.
Liabilities:
There are current liabilities and non-current liabilities.Current liabilities are obligations the must
be paid within a year, such as short term loans, payments owing, accrued expenses. Non-current
liabilities, meanwhile, represent what the school owes in a year or more time. Non-current
liabilities represent bank and other loans. Here in this balance sheet there are more assets than
liabilities and the debt levels are falling, so that's a good sign and also indicating that the school
is in decent condition.
Equity:
The equity items used in this balance is retained earnings. It basically represents how much
money the school received when it sold its ownership. In other words, retained earnings are a
tally of the Money School has chosen to reinvest rather than pay to owners.
Equity represents what shareholders own, so it is often called shareholder's equity.
Equity = Total Assets Total Liabilities

4.7 PREPARING BUDGET & OTHER RECORD KEEPING BOOKS:

4.7.1 Budget:
Budget is a quantitative expression of a plan for a defined period of time. It includes estimate of
costs, revenues, and resources over a specified period, reflecting a reading of future financial
conditions and goals. Budgets dont guarantee success, but they certainly help to avoid failure.
The budget is an essential tool to translate general plans into specific, action-oriented goals and
objectives. By adhering to the budgetary guidelines, the expectation is that the identified goals
and objectives can be fulfilled.
46 | P a g e

Budget of Cambrian School & College for 2014-2015

Sl.
Nr
I

Particulars

Income From the School

1.1
1.2
1.3
1.4
1.5

Admission Fees
Session Fees
Monthly fees
Hostel fees

Unit

Unit
Cost

Sub Total

Total

Income

Examination, mark sheet,

Grand
Total
3,852,000

3,692,000
200
200
200
1
1

1,000
2000*2
1000*12
100,000
100,000

250,000
800,000
2,400,000
100,000
100,000

350

120

42,000
3,692,000

%
100.00
%
95.86%

certificate fees

1.6

Admission form
Sub Total

Others income

4.14 %
160,000

2.1

2.2
2.3

Income From Selling of Old

Furniture, Office Equipments,
etc.
Contribution & Donation from
Directors.
Income From Various
Activities
Sub Total

II

Expenditure

3
3.1

Core Activities
Salary of teachers & office
staff
Seminar, Training & Workshop
for teachers.
Buying Books & study
equipment
Scholarship for Students
Sub Total

3.2
3.3
3.5

50,000
50,000

100,000

10,000

100,000

10,000
160,000
4,094,000
1,620,000
1

1,500,000

1,500,00
0
50,000

50,000

50,000

10

2000

20,000
1,620,000

54.11%

50,000

47 | P a g e

4
4.1
4.2

Rental and Maintenance of

Premises
House rent
Maintenance, Repair of Rented
House
Sub Total

12
12

50,000
2,000

5.1

Office Equipment
Stationery
Projector
Telephone Set
White Writing Board
Water Filter, Cutleries, etc.
Repair and maintenance
Sub Total

12
1
1
5
1
1

2,500
25,000
10,000
3,000
10,000
10,000

30,000
25.000
10,000
15,000
10,000
10,000
100,000

Furniture and Fixture

Computer
Chair
Table
Ceiling Fan
Notice Board
Sub Total

5
30
30
4
1

50,000
1,000
3,000
3,000
2,000

250,000
30,000
90,000
12,000
2,000
384,000

6.1
6.2
6.3
6.4
6.5
6.6
6.7
6.8
6.9
6.10
6.11

Administrative & General

Expense
Advertisement
Electricity bills
Printing of Various Forms,
Envelops & Letter Head
Phone Bills
Newspaper
Internet Charges
Photocopy & Binding
Board fees
Auditing & Legal fees
Hospitality
Other Administrative Cost
Sub Total
Contingencies

100,000

3.34%

468,000

Office Equipments &

Furniture

15.63%

600,000
24,000

5.2

668,000

384,000

1
12
12

450,000
2,000
5,00

450,000
24,000
60,000

12
12
12
12
1
1
12
12

1,000
3,00
3,000
5,00
10,000
20,000
1,000
2,00

12,000
36,000
36,000
6,000
10,000
20,000
12,000
24,000
812,000

10,00

10,000

12.83%

812,000

13.76%

10,000

0.33%

48 | P a g e

0
Total Income
Total Expenditure

3,852,000
4,094,000

100%
100%

Discussion:
By preparing budget the school can get the benchmarks against which to compare actual results
and develop corrective measures; that gives the school management pre approval for execution
of spending plans; and allows providing forward-looking guidance to the owners and creditors.
From the above stated budget we can see that, it only covers known expenses, and expected
future costs; so we can categorize this budget as an operating budget. Operating budget is the
budget for income statement elements such as revenues and expenses. Operating budgets are
completed in advance of the accounting period, which is why they require estimated expenses
and revenues. In the above stated budget total spending exceeds total income; the result is a
budget deficit, which must be financed by borrowing money and paying interest on the borrowed
money. A balanced budget occurs when spending equals income and budget surplus is a situation
in which income exceeds expenditures.

49 | P a g e

4.7.2 Student ledger:

A student ledger is used to record students payments and transactions in the school. By
maintaining the student Ledger Schools accounts/management can easily find out every students
payment or transaction status. This ledger is maintained from the beginning to the end of the
academic period of each student. In Cambrian School, Student ledger is maintained in both paper
based (written) and in EXEL format. For preventing data losses and to secure the recorded
information student ledger is maintained in both formats.
Cambrian School and College
Roll No. &
Weaver
%

1st
Semester
payment
Status

Admission
Fee

Session
Fee

July
2014

Aug
2014

Sept.
2014

Oct
2014

Nov.
2014

Dec.
2014

801 (60%)

Free

Free

400

400

400

400

400

400

802

2000

2000

1000

1000

1000

1000

1000+
200

803

2000

2000

1000

1000+
200
1000

1000

1000

1000

1000

Due
500+1000

804

2000

1500

1000

1000

1000

1000

1000

--

805

2000

2000

1000

1000

1000

1000

1000

1000

806

2000

2000

1000

1000

1000

1000

1000

1000

807 (50%)

Free

Free

500

500

500

500

500

500

808

2000

1500

1000

1000

1000

1000

1000

809

2000

2000

1000

1000

1000

1000+
200
1000

1000

1000

810

2000

2000

1000

1000

1000

1000

1000

1000

201

2000

1500

1000

1000

1000

1000

1000

1000

202 (50%)

2000

2000

500

500

500

500

500

500

ID Card+
Due 500

203 (30%)

2000

2000

700

700

700

700

700

--

Due 700

204

2000

2000

1000

1000

1000

1000

1000

205

2000

1000Ap.

1000

1000

1000+
100
1000

1000

1000

1000

206

2000

1000Ap.

1000

1000

1000

1000

1000

1000

207 (20%)

2000

2000

800

800

800

800

800

800

208

2000

2000

1000

1000

1000

1000

1000

209

2000

1000Ap.

1000

1000

1000

1000

1000

1000+
400
1000

Due 500

50 | P a g e

210

2000

1000Ap.

1000

1000

1000

1000

1000

1000

1st semester Student ledger for the year 2014.

51 | P a g e

4.7.3 Salary sheet:

Salary sheet is prepared to record the salary that is given to the school staff and teachers. An
Organizations payment system differs from other organization. Employees can be paid on any
basis - salary, hourly, commission, piece-rate, flat rate as long as they receive minimum wage for
all hours worked in the pay period, and as long as overtime is paid when required.
Cambrian School and College
Salary sheet for the month of April, 2015
Sl
No

Name of the
employee

1
2
3
4
5
6
7
8
9
10
11
12
13

Mr.Khirul Amin
Mr.Sibbir Ahmed
Mr. Md Anisur
Rahman
Mr. Monwar
Hossain
Mr. Rafique
Ahmed
Mr. Rafique
Ahmed Chaudhury
Mr. Abu Tofayel
Mr. Kazi Habibur
Rahman
Mrs. Rowshon Ara
Begum
Mr. Nazmul Alam

14

Mrs.Tanzila Trisha
Mowlana Faiyaz
Ahmed Chaudhury
Mrs. Sheakh Mina

15

Mr. Sadek Ahmed

16

Mr. Tonmoy Roy

17

Mr. Resal Ahmed

ID
N
o.

Designation

Basic pay

Deduction
( Adv.in
previous
month
&punishme
nt)

Advance

Overtime
(Extra
Classes)

Total
payment

Professor &
Principle
Asst. Professor
Vice-Principle
Senior
Lecturer
Senior
Lecturer
Senior
Lecturer
Senior
Lecturer
Senior
Lecturer
Lecturer

22,000

--

--

20,000
17,000
15,000

----

3,000
---

2,834
--

23,000
19,834
15,000

15,000

--

--

--

15,000

13,500

--

--

--

13,500

13,500

--

--

--

13,500

13,500

--

--

--

13,500

11,000

--

--

2,933

13,933

Lecturer

11,000

--

--

--

11,000

Accounts
officer
Receptionist
Lecturer
(part-time)
Lecturer
(part-time)
Lecturer
(part-time)
Lecturer
(part-time)
Lecturer
(part-time)

10,500

--

--

--

10,500

7,500
5,000

Ad- 2000
--

---

1,834

5,500
6,834

5,000

--

--

1,000

6,000

3,000

--

--

1,300

4,300

3,000

--

--

2,600

5,600

3,000

--

--

8,00

3,800

22,000

52 | P a g e

18

Mrs. Tara Banu

Administrative
officer

3,000

--

--

--

3,000

Total

4.8 FINDINGS:

The Cambrian School and College maintains both manual (paper pencil) and
computerized (Microsoft Word and Excel) systems for performing the operations of AIS.

The most salient feature is that, there is not enough AIS technology and infrastructure in
Cambrian School and College.

The Cambrian School and College does not have any AIS software in practice. For this
reason, the management of the school often faces difficulties to find out required
information when it is needed.

Daily, monthly, quarterly and yearly financial reports are prepared for internal and
external reporting.

Besides maintaining manual and computerized systems (Microsoft Word and Excel)
Cambrian School and College uses online data storage to secure their financial
information from being lost, damaged or destroyed.

In addition to the accounts related activities sometimes the accountant maintains other
administrative activities, which hampers the performance of the Accounts.

Informations are not available to the students especially about their transactions or
payment status, results etc.

The Accountant is not fully satisfied or motivated to his work, because of poor salary and
opportunities he gets as an accountant.

53 | P a g e

54 | P a g e

Chapter: Five
Recommendations and Conclusion

55 | P a g e

5 Recommendations:
The following points are recommended after the study:

The use of technology should be emphasized by using develop software for recording
transaction & preparing financial report as required.

The management of the school should focus on to the development of AIS infrastructure
rather than considering the cost factors.

By using AIS software, salary sheet and student database can be managed instead of
manual process of ledger maintenance.

More upgrade PC should be given to the school accounts for better functioning.

Interaction between the accounts and the school authority should be increased.

Closer inspection of authority towards the accunts section is needed.

After solving above stated complication it can be said that educational institution like Cambrian
school and college will be able to maintain a properly structured AIS.

56 | P a g e

5.1 Conclusion:
The widespread growth of college in our country are generating confusion in the mind of
conscious people as to whether these colleges can conform to the fundamental principle of
implementing relastic education of a standard college. Sylhet cambrian school and college has
been established to provide quality education of modern age at an afforable cost.
AIS is responsible for providing timly and accurate financial and statistical reports for internal
management decision making, and for external parties such as creditor, investors and regulatory
authorities. the study found that good accounting information system enhenses administrative
effectiveness. this study is made to learn about various operations and practices of AIS in Sylhet
cambrian school and college. from the study it found that AIS have three main objectives:

To process transaction for accountibality purpose

To maintaion adequite control to ensure the integirity of the organizations data and the
safeguarding of its resourses and assets.
To provide information to support decision making and to provide users with the
information they need to manage their organization.

AIS can be and should be the primary information system of an orgaization. It will provide an
organization more control over its regular operations and will assits in safeguarding assets and
genarating information or reporting system.

57 | P a g e

Bibliography:

1. Accounting Principles, 8th edition.

By-Jerry J. Weygandt, Donald E. Keieso & Paul D kimmel.
2. Fundamentals of Accounting: Basic Accounting Principles Simplified for Accounting
Students. (2007).
By-Donatila Agtarap-San Juan
3. Accounting Information System 10th edition.
By- Rommey M., & Steinbart P.

References:
1. www.sccbd.net & https://www.facebook.com/SylhetCambrianCollege/info
2. Colleges leaflets, prospectus and various financial statements.
3. Personal contact with Mr. Nazmul Alam, Accounts Officer, SCSC
4. Accessed at: http://www.businessdictionary.com/
5. Accessed at: http://www.accountingtools.com/
6. Accessed at: http://www.investopedia.com/terms/s/swot.asp.
7. Accessed at: http://www.accountingtools.com/accounting-dictionary/
8. Accessed at: http://www.accountingcoach.com/accounting-topics#

58 | P a g e