ESSAY: Taxation is much easier given better accounting

and auditing practices

Taxation is a crucial aspect of any economy, and it is essential to have an
efficient and effective taxation system to ensure that the government can
collect taxes effectively. Better accounting and auditing practices can
significantly improve the taxation system, making it easier for taxpayers to
comply with tax laws and for the government to collect taxes.
Good accounting practices are essential for accurate financial record-keeping.
When businesses maintain accurate financial records, they are better able to
track their income and expenses, which is crucial for calculating accurate tax
liabilities. This, in turn, makes it easier for tax authorities to assess and collect
taxes. Additionally, good accounting practices help businesses identify tax
deductions and credits that they are eligible for, which can reduce their tax
burden.
Auditing practices also play a vital role in taxation. Audited financial
statements provide assurance that the financial information presented by the
taxpayer is accurate and complete, giving the tax authorities confidence in the
taxpayer's tax returns. Additionally, audits can help identify errors or
discrepancies in financial records, allowing taxpayers to correct them before
filing their tax returns.
Furthermore, better accounting and auditing practices can help reduce tax
evasion. When businesses maintain accurate financial records, it is more
difficult for them to conceal income or inflate expenses to reduce their tax
liabilities. Audits can also detect any attempts to evade taxes and lead to
penalties and legal action against the taxpayer.
In conclusion, having better accounting and auditing practices can
significantly improve the taxation system. It makes it easier for taxpayers to
comply with tax laws and for the government to.
Overall, better accounting and auditing practices can make the tax
system more efficient, effective, and fair for everyone involved.
With better accounting and auditing practices, it becomes easier to keep track
of financial transactions and ensure compliance with tax regulations. This can
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lead to more accurate tax calculations, reduced errors, and improved
transparency in financial reporting. Additionally, it can help to prevent tax
evasion, which is a serious issue that can have negative impacts on the
economy and society as a whole. Overall, better accounting and auditing
practices can make the tax system more efficient, effective, and fair for
everyone involved.
ESSAY: Có ý kiến cho rằng kế toán quan trọng hơn
kiểm toán. Bạn có đồng ý ko?
There is a common misconception that accounting and auditing are the same
thing. Although they are closely related, they serve different purposes.
Accounting is the process of recording, classifying, and summarizing
financial transactions to provide accurate financial information to
stakeholders. On the other hand, auditing is the process of evaluating a
company's financial statements to ensure that they are accurate and comply
with accounting standards and regulations.

Both accounting and auditing are important for any organization, but it is
unfair to say that one is more important than the other. Accounting plays a
critical role in the success of any company by providing reliable financial
information for decision-making purposes. Without accurate accounting
records, it would be impossible to assess the financial health of a business.
Accounting information is used to prepare financial statements, tax returns,
and regulatory reports. It also helps businesses make the right decisions, such
as determining pricing strategies, managing cash flow, and investing in new
projects.

However, auditing is equally important to ensure the accuracy and credibility

of financial information. An audit provides an independent assessment of the
financial statements, which helps investors and other stakeholders make
informed decisions about the company. An audit also helps to identify errors,
fraud, and other irregularities that can affect the financial statements. By

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doing so, an audit reduces the risk of financial misstatements and can increase
the confidence of investors and lenders in the company.
In conclusion, accounting and auditing are equally important for any
organization. Accounting provides the foundation for accurate financial
reporting, while auditing ensures the accuracy and credibility of financial
statements. Without accounting, there would be no financial information to
audit, and without auditing, financial statements may not be reliable. Both are
crucial to the success and survival of any business.

The new head of your financial department wants to know

about the taxationsystem in your country. He also heard that
the taxation system is closely connectedwith the financial
reporting requirements. Write a report to him explaining
themajor points and referring to the relevant laws. Write 150-
200 words.
Vietnam’s taxation system is closely connected to its financial reporting
requirements. The most significant taxes that businesses operating in Vietnam
are subject to include Corporate Income Tax (CIT), Value-Added Tax (VAT),
and Personal Income Tax (PIT).
Corporate Income Tax (CIT) is levied on all business profits made in Vietnam
at a flat rate of 20%. The tax is payable on a quarterly basis and paid within
90 days after the end of each quarter. Companies are required to submit a
Corporate Income Tax return to the tax authorities within 90 days after the
end of the fiscal year.
Value-Added Tax (VAT) is levied on the sale of goods and services at a
standard rate of 10%. Businesses are required to register for VAT when their
annual revenue exceeds VND1 billion. VAT returns are filed monthly or
quarterly, depending on the size of the business.
Personal Income Tax (PIT) is levied on individuals and is calculated based on
their monthly income. The tax rates range from 5% to 35%, with the highest

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rate applied to incomes over VND80 million per month. Employers are
required to withhold and remit PIT on behalf of their employees.
Vietnam’s tax and financial reporting requirements are governed by the Law
on Tax Administration, the Law on Corporate Income Tax, and the Law on
Value-Added Tax. These laws provide detailed guidance on tax compliance
and reporting obligations for businesses operating in Vietnam.

Write a short report (10-12 sentences). Find information about

taxation in Vietnam. Compare taxation of our country with
taxation in the USA and the UK. Do these systems have much in
common? Is there any difference?
In Vietnam, the taxation system consists of various taxes such as personal
income tax, corporate income tax, value-added tax, and import/export tax.
Personal income tax rates range from 5% to 35%, while corporate income tax
rates are a standard 20%. Value-added tax is currently at a rate of 10%, and
import/export tax ranges from 0% to 35% depending on the type of goods.
When comparing the taxation system in Vietnam to that of the USA and UK,
there are some similarities and differences. All three countries have a personal
income tax, corporate income tax, and value-added tax. However, the tax
rates and brackets vary significantly. In the USA, personal income tax rates
range from 10% to 37%, while in the UK, it ranges from 20% to 45%.
Another notable difference is the tax system's complexity. The USA and UK
have more complex tax codes than Vietnam, which can make it difficult for
individuals and businesses to understand and comply with tax laws.
In summary, while there are similarities between the taxation systems in
Vietnam, the USA, and the UK, there are also significant differences in tax
rates, complexity, and structure. It's important to note that tax laws and
regulations in each country are subject to change, so it's essential to stay up-
to-date with any changes that may affect you.

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What responsibilities do auditors have in their relationship with
their clients? How is this regulated in Vietnam? Is the
regulation strong enough?
Auditors are responsible for providing an objective and professional
assessment of a company's financial statements to ensure that they are
reliable, accurate, and comply with applicable accounting standards. The
relationship between auditors and their clients is built on trust and integrity,
and auditors must maintain independence and impartiality in carrying out
their duties.
In Vietnam, auditors are regulated by the Ministry of Finance (MOF) and
must be licensed by the Vietnam Association of Certified Public Accountants
(VACPA). The regulations governing auditors in Vietnam are based on
international standards such as the International Standards on Auditing (ISA)
and the Code of Ethics for Professional Accountants issued by the
International Federation of Accountants (IFAC).
Under Vietnamese law, auditors have a range of responsibilities to their
clients, including:
1. Conducting audits in accordance with applicable accounting and auditing
standards;
2. Reporting any material misstatements or discrepancies found during the
audit;
3. Maintaining confidentiality of client information;
4. Disclosing any conflicts of interest that may arise during the audit process;
5. Complying with all applicable laws and regulations.
The regulation of auditors in Vietnam is generally considered to be strong,
with robust standards and procedures in place to ensure that auditors meet
their responsibilities to clients. However, there have been some concerns
raised about the adequacy of the regulatory framework in certain areas, such
as the enforcement of ethical standards and the independence of auditors.
Overall, the relationship between auditors and their clients in Vietnam is
governed by a strong regulatory framework that aims to promote

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transparency, accountability, and integrity in financial reporting. While there
are some areas where improvements could be made, the regulatory regime in
Vietnam is generally considered to be effective in ensuring that auditors meet
their obligations to their clients and the wider public.

Write an essay of 300 words on the opportunities and

challenges facing those working in the field of
Accounting and Auditing.
Accounting and auditing are two critical fields that are essential to the success
of any business or organization. Professionals working in these fields are
responsible for managing and analyzing financial information to ensure that
organizations remain financially stable and compliant with regulations.
However, despite the importance of these roles, there are several challenges
and opportunities that individuals face when working in accounting and
auditing.
One of the main opportunities for those working in accounting and auditing is
the high demand for professionals with these skills. As technology continues
to advance, the need for individuals who can manage complex financial
systems and analyze data is only increasing. This means that there are plenty
of job opportunities for those with the right qualifications and experience.
Another opportunity for accounting and auditing professionals is the potential
for career growth. With experience, professionals can advance to higher-level
positions, such as chief financial officer or partner in an accounting firm.
Additionally, many accounting and auditing professionals choose to
specialize in a specific area, such as tax or forensic accounting, which can
lead to even more opportunities as a specialist in that field.
However, despite these opportunities, there are also several challenges that
those working in accounting and auditing must face. One of the biggest
challenges is keeping up with changing regulations and standards. In recent
years, there have been significant changes in both U.S. and international
accounting and auditing standards, which means that professionals must
constantly stay up-to-date with these changes to remain compliant.
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Another challenge is the potential for ethical dilemmas. Auditors, in
particular, must remain independent and objective when analyzing financial
information. However, there have been numerous high-profile cases of
auditors failing to maintain their independence, resulting in serious ethical
breaches. To avoid these situations, professionals must ensure they maintain
ethical standards at all times, even in difficult situations.
In conclusion, working in accounting and auditing can be both challenging
and rewarding. While high demand and potential for career growth offer
opportunities, professionals must also be prepared to keep up with changing
regulations and ethical standards to be successful in the field. With the right
skills and dedication to the profession, individuals can enjoy a fulfilling and
successful career in accounting and auditing.

Write a composition expressing your own opinion on the

topic:Why do people want to become an accountant?

Accountancy is a field that has been gaining a lot of popularity in recent

times. Many people are choosing to pursue a career in accountancy, and there
are several reasons why this may be the case. In this composition, I will be
expressing my own opinion on the topic of why people want to become an
accountant.
Firstly, one of the main reasons why people want to become an accountant is
the financial stability that comes with it. Accountants are known to earn a
good salary, and this is especially true for those who are working in larger
firms or companies. This financial stability is something that many people
desire, and becoming an accountant offers a great opportunity for this.
Secondly, accountancy is a field that offers a lot of opportunities for growth
and advancement. As an accountant, there are many different areas that one
can specialize in, such as tax, audit, or management accounting. This allows
for a lot of flexibility and the chance to explore different areas of interest
within the field. Additionally, there are many opportunities for career

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advancement within the accounting field, and this can be very appealing to
those who are looking for a long-term career.
Thirdly, becoming an accountant can be a very rewarding career choice.
Accountants play a crucial role in the financial management of organizations,
and their work can have a significant impact on the success of a business.
This sense of responsibility and the ability to make a difference can be very
motivating for those who are passionate about their work.
Finally, many people choose to become accountants because they enjoy
working with numbers and analyzing financial data. For some, the idea of
working with numbers all day may seem tedious, but for others, it can be very
fulfilling. The challenge of analyzing complex financial data and providing
insights and recommendations can be very engaging, and this is something
that many people find very rewarding.
In conclusion, there are several reasons why people may choose to become
accountants. Whether it is for the financial stability, the opportunities for
growth and advancement, the rewarding nature of the work, or the enjoyment
of working with numbers, there are many different factors that can make
accountancy an attractive field to pursue. Ultimately, the decision to become
an accountant is a personal one, and it is important for individuals to consider
their own interests, strengths, and career goals when making this choice.

Write an essay of 300 words on what makes a good

accountant.

A good accountant is someone who possesses essential skills and

characteristics that enable them to excel in their profession. Accounting is a
complex and challenging field that requires precision, attention to detail, and
a high level of analytical skills. In this essay, we will discuss the qualities that
make a good accountant.
Firstly, a good accountant should be highly skilled in mathematics. They need
to have a solid foundation in mathematics and be able to perform complex

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calculations with ease. They should also be proficient in using accounting
software and have a strong understanding of financial statements.
Secondly, a good accountant should be organized and detail-oriented. They
need to be able to keep track of multiple financial records and ensure that all
financial information is accurate and up-to-date. They should be able to pay
attention to every detail to ensure that there are no errors in their work.
Thirdly, a good accountant should be ethical and honest. They are responsible
for managing the finances of their clients, and as such, they need to be
trustworthy and honest. They should adhere to ethical standards and maintain
confidentiality when handling sensitive financial information.
Fourthly, a good accountant should be a good communicator. They should be
able to explain complex financial information to their clients in a way that is
easy to understand. They should be able to listen to their clients' concerns and
provide solutions that are tailored to their needs.
Fifthly, a good accountant should have strong analytical skills. They should
be able to analyze financial data and identify trends and patterns that can help
their clients make informed decisions. They should be able to provide
financial advice that is based on solid data and analysis.
Last but not least, a good accountant should be able to work well under
pressure. They should be able to meet tight deadlines and handle multiple
tasks simultaneously. They should be able to manage their time effectively
and prioritize tasks to ensure that all their work is completed on time.
In conclusion, a good accountant is someone who possesses a combination of
technical skills, ethical values, and personal qualities that make them stand
out in their profession. They should be organized, detail-oriented, ethical, and
honest. They should be able to communicate effectively, have strong
analytical skills, and be able to work well under pressure. These qualities are
essential for anyone who wants to succeed as an accountant.

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With the rise of artificial intelligence (AI), a wide variety
of professions are be at risk of becoming obsolete. So just
what is the future of accounting?
Artificial intelligence (AI) has the potential to revolutionize the accounting
profession. With the ability to automate repetitive tasks and analyze vast
amounts of data, AI is poised to transform the way accountants work.
However, it is important to note that AI is not going to replace accountants
entirely. Instead, it will augment their work and help them become more
efficient and effective in their roles.
One area where AI is already making an impact in accounting is in the area of
data analytics. Accountants can use AI-powered tools to analyze financial
data and identify trends and patterns that were previously difficult to spot.
This can help them make more accurate financial statements and provide
more valuable insights to their clients.
Another area where AI is becoming increasingly important is in the area of
fraud detection and prevention. By analyzing vast amounts of data, AI-
powered tools can identify potential fraudulent activities and alert accountants
to investigate them further.
However, as AI becomes more advanced, it may also lead to a reduction in
the number of entry-level accounting jobs. With many repetitive tasks being
automated, there may be less demand for junior accountants who are
responsible for these tasks. This highlights the importance of developing new
skills and adapting to the changing landscape of the profession.
Overall, the future of accounting is one where AI and humans work together
to achieve better outcomes. AI will help accountants become more efficient
and effective, freeing up their time to focus on high-level tasks that require
human expertise. However, it is important for accountants to embrace this
change and develop new skills that will allow them to stay competitive in the
years to come.

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1. explain activity-based costing
- Activity-based costing (ABC) is a method of assigning overhead and
indirect costs—such as salaries and utilities—to products and services. The
ABC system of cost accounting is based on activities, which are considered
any event, unit of work, or task with a specific goal.
2. why is bookkeeping important
- Bookkeeping helps businesses track their income and expenses and ensure
accurate information is available for decision making. It is an important
component of any successful business. Without bookkeeping, a company
would not have a clear view of its financial health.
4 distinguish financial accounting and managerial
accounting
Financial accounting focuses on the creation of financial statements and
reporting of financial information for external stakeholders, while managerial
accounting focuses on providing financial information for internal decision-
making and planning.
5 what is going concern principles
The going concern principle is the assumption that an entity will remain in
business for the foreseeable future. Conversely, this means the entity will not
be forced to halt operations and liquidate its assets in the near term at what
may be very low fire-sale prices

II. Explain definition:

1. Matching principle
The matching principle is an accounting guideline that requires
businesses to match their expenses with the revenue they generate during the
same accounting period. This means that expenses incurred to produce
revenue must be recognized in the same period as the revenue that was

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generated as a result of those expenses. By following this principle,
businesses can accurately calculate their net income for a given period and
produce financial statements that reflect their true financial performance.
2. The going concern principle
The going concern principle is an accounting concept that assumes a business
entity will continue to operate indefinitely, without the intention or need to
shut down or liquidate its assets. This principle implies that a business will be
able to meet its obligations and pay its debts as they become due in the
ordinary course of business operations.
In other words, the going concern principle assumes that a business will
continue to generate revenue, earn profits and remain solvent in the future.
This assumption is important for financial reporting purposes, as it enables
accountants and auditors to prepare financial statements that accurately reflect
a company's financial position and performance. Without the going concern
principle, financial statements would be prepared on a liquidation basis,
which assumes that a business will cease to exist.
3. The prudence principle
The prudence principle is an accounting principle that requires an accountant
or business to exercise caution and use good judgment when preparing
financial statements. It means that an organization should not overstate its
financial position or performance by recognizing gains or revenues too early
or by understating its liabilities or expenses. Instead, it should be conservative
in its accounting practices and only recognize gains, revenues, and assets
when they are certain and probable. This principle is important because it
ensures that financial statements accurately reflect an organization's financial
health, and helps to prevent fraudulent accounting practices.
4. The consistency principle
The consistency principle is a fundamental accounting principle that requires
a company to use consistent accounting methods and procedures from one
accounting period to the next. This means that a company cannot change its
accounting methods simply to manipulate its financial results or to make its

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financial performance look better. Consistency in accounting methods and
procedures allows for better comparability between financial statements from
different accounting periods and helps stakeholders to make informed
decisions based on reliable financial information.
5. objectivity principle
The objectivity principle is an accounting concept that requires
financial information to be recorded and reported based on objective evidence
or facts, rather than personal opinions or biases. This principle ensures that
accounting information is reliable and free from any subjective influence,
which enables stakeholders to make informed decisions based on the
information presented. It also implies that financial transactions and events
must be recorded using the same measurement criteria, so that they can be
compared accurately over time and between different companies. This
principle is essential for maintaining the integrity of financial reporting and
ensuring that financial statements provide a true and fair view of a company's
financial position and performance.
6. Unit of measure assumption
The unit of measure assumption is an accounting principle that assumes
that financial transactions are recorded in a common unit of measure,
typically the currency of the country where the business operates. This
principle implies that all financial transactions, assets, liabilities, revenues,
and expenses should be measured in the same monetary unit.
For example, if a company operates in the United States, all transactions
should be recorded in US dollars. This allows financial statements to be
consistent and comparable over time, and makes it easier for users to
understand and analyze the financial information.
The unit of measure assumption is necessary for meaningful financial
reporting, as it ensures that financial information is presented in a clear and
consistent manner that can be easily understood by financial statement users.
7. Time-period or accounting period assumption

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 The time-period or accounting period assumption is an accounting
principle that assumes that the economic activities of a business can be
divided into specific time intervals. This enables the company to prepare
financial statements that reflect the performance of the business over a
particular period, usually a year, quarter, or month.
The purpose of the time-period assumption is to provide a consistent and
standardized way to measure and report financial information. By breaking
down the financial data into specific periods, investors and other stakeholders
can analyze the company's financial performance over time and make
informed decisions.
The time-period assumption also allows businesses to accurately record
revenue and expenses in the period in which they are incurred. This ensures
that financial statements reflect the true financial position and performance of
the business at the end of a particular period, rather than at a specific point in
time.
8. The historical cost principle
The historical cost principle is a fundamental accounting concept that
states that assets and liabilities should be recorded in the financial statements
at their original historical cost. This means that the initial purchase price of an
asset or the amount of a liability when it was incurred should be used as the
basis for recording the item in the balance sheet.
Under the historical cost principle, the value of an asset on the balance sheet
does not change over time, even if its market value or replacement cost has
increased or decreased. Similarly, the amount of a liability remains the same
on the balance sheet until it is paid off or settled.
The rationale behind the historical cost principle is that it provides a reliable
and objective basis for measuring and reporting financial information. It also
ensures consistency and comparability of financial statements, as the same
accounting method is used for all transactions.
9. The realization principle
The realization principle is the concept that revenue can only be recognized
once the underlying goods or services associated with the revenue have been
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delivered or rendered, respectively. Thus, revenue can only be recognized
after it has been earned.
10. The full disclosure principle
The full disclosure principle states that all information should be
included in an entity's financial statements that would affect a reader's
understanding of those statements. The interpretation of this principle is
highly judgmental, since the amount of information that can be provided is
potentially massive. To reduce the amount of disclosure, it is customary to
only disclose information about events that are likely to have a material
impact on the entity's financial position or financial results.
11. The conservatism principle
The conservatism principle is the general concept of recognizing expenses
and liabilities as soon as possible when there is uncertainty about the
outcome, but to only recognize revenues and assets when they are assured of
being received.
III. Difference and compare
1. accounting and bookkeeping
Bookkeeping focuses on recording and organising financial data.
Accounting is the interpretation and presentation of that data to business
owners and investors.
2. Cash basis accounting and accrual basis accounting
The key difference between cash basis and accrual basis accounting is
the timing of when revenues and expenses are recognized. In cash basis
accounting, they are recognized when cash is received or paid, while in
accrual basis accounting, they are recognized when they are earned or
incurred.
3. Direct and indirect cost
Direct costs are expenses that can be connected to a specific product,
while indirect costs are expenses involved with maintaining and running a

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company. As a business owner, you will have a clearer understanding of how
to set pricing if you can classify your costs correctly.
4. Fixed and variable cost
Variable costs change based on the amount of output produced.
Variable costs may include labor, commissions, and raw materials. Fixed
costs remain the same regardless of production output. Fixed costs may
include lease and rental payments, insurance, and interest payments.
5. Tangible and intangible assets
An intangible asset is a non-monetary asset that cannot be seen or
touched. Tangible assets are physical assets that can be seen, touched and felt.
6. wholesale and retail
The biggest difference between wholesale vs. retail is in the type of
buyer. While retail involves selling products directly to the end consumer,
wholesale involves selling products in bulk to other businesses such as retail
stores.
7. Income tax and capital gains tax
The difference between the income tax and the capital gains tax is that
the income tax is applied to earned income and the capital gains tax is applied
to profit made on the sale of a capital asset.
8. Direct tax and indirect tax
A direct tax is one that the taxpayer pays directly to the government.
These taxes cannot be shifted to any other person or group. An indirect tax is
one that can be passed on-or shifted-to another person or group by the person
or business that owes it.

Cuối kỳ:
Unit 12:
1. what is the differences between an income tax and a capital gains tax?

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An income tax is a tax on the income earned by an individual or entity,
whereas a capital gains tax is a tax on the profit made from selling an asset
such as a stock, mutual fund, or real estate.
Income tax is usually calculated as a percentage of the total income earned by
an individual or entity. It applies to all forms of income, including wages,
salaries, tips, and interest earned from savings accounts.
Capital gains tax, on the other hand, is calculated as a percentage of the profit
made from selling an asset. The profit is calculated as the difference between
the sale price and the original purchase price of the asset.
In general, capital gains tax rates are lower than income tax rates, and they
may also have different rules for how long an asset needs to be held before it
qualifies for a lower tax rate. Additionally, some assets may be exempt from
capital gains tax, such as a primary residence that is sold after being held for a
certain period of time.
2. what is the differences between IFRS and VAS?
IFRS stands for International Financial Reporting Standards, while VAS
stands for Vietnamese Accounting Standards. The main differences between
IFRS and VAS are:
1. Scope: IFRS is used globally, while VAS is used only in Vietnam.
2. Adoption: IFRS is mandatory for all companies listed on stock exchanges
in many countries, while VAS is mandatory for all companies operating in
Vietnam.
3. Principles: IFRS is based on principles, while VAS is based on rules.
4. Disclosure: IFRS requires more extensive disclosure of information, while
VAS requires less disclosure.
5. Complexity: IFRS is more complex and detailed than VAS.
6. Financial statements: IFRS requires four financial statements - balance
sheet, income statement, statement of changes in equity, and cash flow
statement - while VAS requires only three - balance sheet, income statement,
and cash flow statement.
7. Accounting treatment: IFRS allows fair value accounting, while VAS
requires historical cost accounting.
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In summary, the main difference between IFRS and VAS is that IFRS is a
global standard based on principles, while VAS is a national standard based
on rules.

3. what is the differences between direct tax and indirect tax?

Direct tax is a tax that is directly paid by an individual or an organization to
the government. The taxpayer is responsible for paying the tax directly
without any intermediary. Examples of direct taxes include income tax,
property tax, and wealth tax.
Indirect tax, on the other hand, is a tax that is levied on goods and services.
The tax is paid by the end consumer indirectly through the price of the goods
or services. The tax is collected by the supplier and then passed on to the
government. Examples of indirect taxes include value-added tax (VAT),
excise duty, and sales tax.
The main difference between direct and indirect tax is the way in which they
are collected. Direct tax is collected directly from the taxpayer, while indirect
tax is collected indirectly through the price of goods and services. Direct tax
is generally considered to be more progressive as it is based on the taxpayer's
ability to pay, while indirect tax is regressive as it affects all consumers
equally regardless of their income.
4. what is the differences between wholesale and retail?
Wholesale refers to the sale of goods or products in large quantities, usually
to retailers or businesses. The price of goods sold in wholesale is generally
lower than the retail price, as the buyers purchase large quantities at one time.
Retail, on the other hand, refers to the sale of goods or products to consumers
in small quantities. Retail stores are typically open to the general public, and
the price of goods sold in retail is generally higher than the wholesale price.
In summary, the main difference between wholesale and retail is the quantity
of goods sold and the price at which they are sold.
5. what is the differences between manager accounting and financial
accounting?

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Managerial accounting and financial accounting are two different branches of
accounting that serve different purposes.
Financial accounting is focused on recording and reporting the financial
transactions of a company. It is primarily concerned with the preparation of
financial statements such as the balance sheet, income statement, and cash
flow statement. These statements are used by investors, creditors, and other
stakeholders to evaluate a company's financial performance. Financial
accounting is also used to comply with regulatory requirements and tax laws.
Managerial accounting, on the other hand, is focused on providing internal
information to managers for decision-making purposes. It involves analyzing
financial data to help managers make informed decisions about the operations
of the company. Managerial accounting provides information such as cost
analysis, budgeting, and forecasting to help managers plan and control the
organization's resources.
Overall, financial accounting is more concerned with external reporting and
compliance while managerial accounting is concerned with internal decision-
making and planning.

Unit 5:
Compare and contrast GAAP and IFS
GAAP (Generally Accepted Accounting Principles) and IFRS (International
Financial Reporting Standards) are two sets of accounting standards used by
companies to prepare their financial statements. Here's a comparison and
contrast of both:
1. Scope: GAAP is used mainly in the United States, while IFRS is used
globally. GAAP applies to all publicly-traded companies in the U.S. that file
financial statements with the Securities and Exchange Commission (SEC),
while IFRS is used in more than 120 countries.
2. Principles vs. Rules: GAAP is more rule-based, with specific guidelines for
recording transactions and preparing financial statements. On the other hand,

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IFRS is more principles-based, with general principles that companies can
adapt to their specific circumstances.
3. Format: GAAP requires companies to follow a specific format for their
financial statements, including a balance sheet, income statement, and
statement of cash flows. IFRS allows more flexibility in the format of
financial statements, as long as they include all the necessary information.
4. Inventory Valuation: GAAP requires companies to use either the LIFO
(Last In, First Out) or FIFO (First In, First Out) method for valuing inventory,
while IFRS allows companies to choose the method that best reflects their
business.
5. Intangible Assets: GAAP requires companies to separate goodwill from
other intangible assets and test it for impairment annually. IFRS allows
goodwill and other intangible assets to be grouped together and tested for
impairment as a single asset.
Overall, while both GAAP and IFRS aim to provide consistent and accurate
financial reporting, they differ in their approach and application. Companies
must choose the set of standards that best aligns with their business and
operations.

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20. Allocation

The term Allocation describes the procedure of assigning funds to various

accounts or periods. For example, a cost can be Allocated over multiple
months (like in the case of insurance) or Allocated over multiple
departments (as is often done with administrative costs for companies
with multiple divisions).

21. Business (or Legal) Entity

This is the legal structure, or type, of a business. Common company

formations include Sole Proprietor, Partnership, Limited Liability Corp
(LLC), S-Corp and C-Corp. Each entity has a unique set of requirements,
laws, and tax implications.

22. Cash Flow (CF)

Cash Flow is the term that describes the inflow and outflow of cash in a
business. The Net Cash Flow for a period of time is found by taking the
Beginning Cash Balance and subtracting the Ending Cash Balance. A
positive number indicates that more cash flowed into the business than
out, where a negative number indicates the opposite.

>>Supporting Post: How to Calculate Days Sales Outstanding to

improve cash flow

23. Certified Public Accountant (CPA)

CPA is a professional designation that an accountant can earn by passing

the CPA exam and fulfilling the requirements for both education and
work experience, which vary by state.

A credit is an increase in a liability or equity account, or a decrease in an

asset or expense account.

25. Debit

A debit is an increase in an asset or expense account, or a decrease in a

liability or equity account.

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26. Diversification

Diversification is a method of reducing risk. The goal is to allocate capital

across a multitude of assets so that the performance of any one asset
doesn’t dictate the performance of the total.

27. Enrolled Agent (EA)

An Enrolled Agent is a professional accounting designation assigned to

professionals who have successfully passed tests showcasing expertise in
business and personal taxes. Enrolled Agents are generally sought out to
complete business tax filings to ensure compliance with the IRS.

28. Fixed Cost (FC)

A Fixed Cost is one that does not change with the volume of sales. For
example, rent and salaries won’t change if a company sells more. The
opposite of a Fixed Cost is a Variable Cost.

29. General Ledger (GL)

A General Ledger is the complete record of a company’s financial

transactions. The GL is used in order to prepare all of the Financial
Statements.

30. Generally Accepted Accounting Principles (GAAP)

These are the rules that all accountants abide by when performing the act
of accounting. These general rules were established so that it is easier to
compare ‘apples to apples’ when looking at a business’s financial reports.

31. Interest

Interest is the amount paid on a loan or line of credit that exceeds the
repayment of the principal balance.

32. Journal Entry (JE)

Journal Entries are how updates and changes are made to a company’s
books. Every Journal Entry must consist of a unique identifier (to record
the entry), a date, a debit/credit, an amount, and an account code (that
determines which account is altered).

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33. Liquidity

A term referencing how quickly something can be converted into cash.

For example, stocks are more liquid than a house since you can sell stocks
(turning it into cash) more quickly than real estate.

34. Material

Material is the term that refers whether information influences decisions.

For example, if a company has revenue in the millions of dollars, an
amount of $0.50 is hardly material. GAAP requires that all Material
considerations must be disclosed.

35. On Credit/On Account

A purchase that happens On Credit or On Account is a purchase that will

be paid at a future time, but the buyer gets to enjoy the benefit of that
purchase immediately. “Bartender, put it on my tab…”

36. Overhead

Overhead are those Expenses that relate to running the business. They do
not include Expenses that make the product or deliver the service. For
example, Overhead often includes Rent, and Executive Salaries.

37. Payroll

Payroll is the account that shows payments to employee salaries, wages,

bonuses, and deductions. Often this will appear on the Balance Sheet as a
Liability that the company owes if there is accrued vacation pay or any
unpaid wages.

38. Present Value (PV)

Present Value is a term that refers to the value of an Asset today, as

opposed to a different point in time. It is based on the theory that cash
today is more valuable than cash tomorrow, due to the concept of
inflation.

39. Receipts

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A Receipt is a document that proves payment was made. A business
produces receipts when it provides its product or service and it receives
receipts when it pays for goods and services from other businesses.
Received receipts should be saved according to IRS receipts
requirements, and catalogued so that a company can prove that its
incurred expenses are accurate.

40. Return on Investment (ROI)

Originally, this term referred to the profit that a company was making
(Return), divided by the Investment required. Today, the term is used
more loosely to include returns on various projects and objectives. For
example, if a company spent $1,000 on marketing, which produced
$2,000 in profit, the company could state that it’s ROI on marketing
spend is 50%.

41. Trial Balance (TB)

Trial Balance is a listing of all accounts in the General Ledger with their
balance amount (either debit or credit). The total debits must equal the
total credits, hence the balance.

42. Variable Cost (VC)

These are costs that change with the volume of sales and are the
opposite of Fixed Costs. Variable costs increase with more sales because
they are an expense that is incurred in order to deliver the sale. For
example, if a company produces a product and sells more of that
product, they will require more raw materials in order to meet the
increase in demand.

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