To develop topics 2-5 of the subject program.

TOPIC II: INTERNATIONAL ACCOUNTING STANDARDS

2.1 Definition.
International Accounting Standards , or IASs as they are commonly known,
are a set of standards intended to establish how financial statements should be
presented, from what should be presented to how they should be presented.
These standards were issued from 1973 to 2001 by the IASC (International
Accounting Standards Committee), predecessor of the current IASB
(International Accounting Standards Board), which has been in charge of
reviewing and revising them since 2001. To date, 41 standards have been
issued, of which 34 are currently in force, along with 30 interpretations.
2.2 Nature of the prevailing accounting rules.
Generally accepted accounting principles (GAAP) or financial reporting
standards (FRS) are a set of general rules that serve as accounting guidelines
to formulate criteria for the measurement of equity and the reporting of the
assets and economic elements of an entity.
The GAAP are parameters for the preparation of financial statements based on
uniform methods of accounting technique.
They were approved during the 7th Inter-American Accounting Conference and
the 7th National Assembly of Graduates in Economic Sciences, held in the city
of Mar del Plata (Argentina).
The accounting principles of "double entry" were established in 1494 by Friar
Luca Pacioli (1445-1510).
Its basic statement reads:
1. One or more debit accounts always correspond to one or more credit
accounts for the same amount.
2. At all times the debit and credit amounts must be equal.
3. Losses are debited and gains are credited.
4. The entity's equity is distinct from that of its owners.
5. The principle of the resources of an entity is equal to the value of the
shares that fall on it.
6. The equity components and the causes of their results are represented
by means of accounts in which notes are recorded or variations are
recorded to the concept they represent.
7. The balance of an account is the monetary value of the account at a
given time. This balance changes each time a transaction has an effect
 on the components it represents.
8. Asset and expense accounts are debit accounts, and liability, income and
equity accounts are credit accounts.
9. In any entry, regardless of the number of debits and credits, the sum of
the balances must be equal.
Together they form GAAP, generally accepted accounting principles.
2.3 Objectives of the International Accounting Standards (IAS).
• To reflect the economic substance of business operations and present a
true and fair view of a company's financial position.

• Establish the basis for the presentation of financial statements for general
information purposes, to ensure their comparability with both the entity's
own financial statements for previous years and those of other entities.
2.4 General application of the rules.
International accounting standards (IAS) have been developed primarily to bring
consistency to the financial reporting of commercial organizations so that
investors and investment analysts can compare the financial results of one
organization with those of another. These provide assurance that the same
accounting methods and principles have been applied to produce the financial
information and that all material information has been disclosed.

TOPIC III: ANALYSIS AND RECORDING OF MERCHANDISE

TRANSACTIONS AND FINANCIAL STATEMENTS
CORRESPONDING.
3.1 Sales.
Sales are the total amount collected for products or services. borrowed.
3.2 Cost of sales.
Cost of sales(also known as cost of goods sold) refers to the direct cost of
producing goods sold by a company. This amount includes the cost of materials
and labor directly used to create a product or service.
3.3 Merchandise inventory.
The merchandise inventory refers to all those goods that belong to the company,
either commercial or mercantile, which are bought and then sold without being
modified. This Account will show all the goods available for Sale. It is one of the
greatest assets in a company.
3.4 Return of merchandise.
It is the process by which a customer who has purchased a product or service
from us
a merchandise previously returned to the store and in exchange, receives cash
back or, in some cases, another item (the same or different, but of equivalent
value) or a credit to use in the store.
3.5 Rebates and bonuses.
Rebates and bonuses correspond to decreases in economic benefits arising
from discounts, rebates and bonuses granted to customers on the sales value.
3.6 Operating expenses. Classification.
Operating expenses refer to the money disbursed by a company or organization
in the development of its daily activities and operations. Operating expenses are
salaries, rent of premises, purchase of supplies and others. Without them, it
would not be possible to achieve the company's goals.
Operating expenses are also known as indirect expenses, since they are
expenses related to the operation of the business, but are not investments (such
as the purchase of a machine).
Operating expenses are classified as follows:

• Administrative expenses (salaries, office services).

• Financial (interest, issuance of checks).
• Sunk costs (incurred prior to the commencement of operations inherent
to the activities).
• Representation expenses (gifts, travel, meals).
3.7 Freight charges.
Freight charges These are the transports at the company's expense performed
by third parties when they are not included in the purchase price of any material.
This account will record, among others, sales and machinery transportation.

TOPIC IV: CASH

4.1 General concept of cash.
Cash is the money accepted by a company for commercial transactions. It is a
balance sheet item and is part of current assets. It is the most liquid element
owned by the company, i.e., it is money. The company uses this cash to meet
its immediate obligations.
4.2 Basic components of the cash area.

• Operating activities: resources derived from the company's ordinary

and principal operations, such as proceeds from the sale of goods and
the rendering of services.
• Investing activities: represent the extent to which disbursements of
resources have been made with which future benefits are expected; only
 those disbursements that allow the recognition of an asset in the
Statement of Financial Position, i.e., for example, payments for the
acquisition of long-term assets, may be classified as investing activities.
• Financing activities: presents the flow of resources to cover
commitments with those who provide capital to the entity, such as
proceeds from the issuance of shares and other equity instruments.
4.3 Internal control measures that should prevail in the cash area.

• Division of labor
• Delegation of authority
• Assignment of responsibilities
• Promotion of efficient personnel
• Identification of the personnel with the Company's policies.

4.5 Daily cash report.

The daily cash report is a report that clearly and accurately compiles the
transactions made each day in a company or organization.
4.6 Cash disbursement.
Cash disbursement is a process by which a company pays money to a person
or organization, usually related to that company's operating expenses.
Therefore, the disbursement will be an outflow of money to meet an
obligation of the taxpayer, i.e., it will be an outflow of money for the purchase of
an asset.
4.7 Cash transactions.
The Petty Cash or Petty Cash Operations are the summary of the movements
made by means of cash or checks from third parties.
These operations are:
• Consultation of the Cash General Ledger, with details of the movements
that make up the balance.
• Manual Cash Operations, where cash receipts and disbursements are
recorded for different concepts, as long as no operational module is
involved.
• Daily cash sheet, with the accounting counterparts of the movements
made in the Treasury.
• Purchase - Sale of foreign currency
TOPIC V: ACCOUNTS AND NOTES RECEIVABLE.
5.1 Definition.
Accounts and notes receivable represent receivables due from a company for
goods sold on credit, services rendered, loan commissions or any other similar
concept.
5.2 Internal control.

• 5.2.1 Internal Control of Accounts Receivable

The total of the individual accounts to be reconciled periodically with the control
account in the general ledger.
The aging of balances should be reviewed periodically by an Employee.
Statements must be sent regularly to all debtors.
Specific approval of the officer must be obtained for:
1. Grant special discounts
2. Pay payable balances
The duties of the accounts receivable clerk must be independent of:
1. All cash functions.
2. Verification of invoices and credit notes.
3. Passes to control accounts.
4. Authorization of write-offs of doubtful accounts.

• 5.2.2 Internal Control of Notes Receivable

These documents must be approved by a competent official before they can be
accepted, varied, renewed or cancelled.
These documents must be recorded in detail.
Reconcile, at least once a month, the auxiliary with the control account.
Register the discount of documents.
Periodically review overdue payments.
Internal control over accounts receivable is strengthened by a division of
functions, so that different departments or individuals are responsible for:

• Control of customer orders.

• The credit approval.
• The delivery of goods.
• The function of the office.
• The billing function.
• Invoice verification.
• Control account management.
• Handling of customers' general ledgers.
• Approval of returns and sales rebates.
• The authorization of write-offs of uncollectible accounts.
5.3 Different sources of accounts receivable.
They can originate in different ways, but in all companies or economic entities
they create a right in which the third party is required to pay for it. Otherwise, the
company is entitled to recover what was sold on credit.
Accounts receivable are equivalent to receivables arising from sales, services
rendered, loans granted or any other similar concept. At the above general level,
notes receivable from customers representing receivables, which have been
documented with bills of exchange or promissory notes, are usually included.
5.4 Allowance for doubtful accounts and its relation to Law 1192.
Allowance for doubtful accounts: This is a credit balance account that
decreases accounts receivable. This is an estimate of accounts receivable that
will be lost due to uncollectibility during the following period.
It is described as a contra asset account that reduces the value of accounts
receivable to produce the appropriate value of such accounts, for example, in
law 11-92 of the Dominican Republic, which is the tax code of the country,
legally constituted companies are allowed to estimate 2% of accounts receivable
or net sales on credit, to create the allowance for doubtful accounts.
5.5 Total or partial recovery of uncollectible accounts.
The bad debt recovery procedure is widely accepted by companies and is
applied using the fixed percentage method on global accounts receivable, the
fixed percentage method on open sales and the allowance for doubtful accounts
method on credit sales.
To calculate the allowance or reserve for doubtful accounts, basically three
methods are used: Direct Write-off, Calculation and Estimation.
If the direct write-off method is used, it consists of liquidating the doubtful
balance in full. This method is of limited use in that it does not set costs against
income for the period to which the accounts relate. Generally, it is applied when
the amounts of delinquent accounts are of little materiality. The seat is:

You See
must
S115.
Accounts receivable. Pedro Perez 00

$115.0
Uncollectible accounts expense 0
The method of calculation is based on the classification of accounts according
to their age and the analysis of the oldest accounts to determine an estimated
percentage of uncollectible accounts. This method also does not set the
uncollectible loss against the income that produced it and does not determine a
fair percentage for each year based on income.
If the estimation method is used, using this method, the allowance may be
estimated on the basis of a certain percentage of accounts receivable
outstanding, which is also not in line with the concept of opposition of expenses
and revenues; or on the basis of a percentage of the amount of credit sales.
This last estimation procedure is considered to be the most efficient because it
allows the amount to be charged in the current year to be determined. The seat
is:
 You See
must
S115.
Accounts receivable . Pedro Perez DO
$115.0
Allowance for doubtful accounts 0

5.6 Concept of notes receivable.

Notes receivable is the account in which the value of documents receivable,
i.e., those documents in favor of the company, is recorded. Its balance is a
debit balance and represents the value of documents pending collection: bills of
exchange and promissory notes. It is a current asset account.
This account is always initiated with a debit, that is, with a debit entry. In
addition, it increases when we receive a promissory note, a bill of exchange or
any contract that is a credit instrument in favor of the company and decreases
when the company collects a promissory note, a bill of exchange or a contract in
its favor. Also, it decreases when any of these documents are cancelled. It
should always be remembered that a debit is debited and a credit is credited.

Notes receivable is charged:

• At the beginning of the year for the value of notes receivable.
 • During the year for the value of notes receivable subscribed in favor of
the Company.
Notes receivable are credited:
• During the year for the value of the documents that are collected,
endorsed or, as the case may be, cancelled.
• At the end of the year for the value of notes receivable considered
uncollectible after analysis. Also, for the value of your balance in the
event you pay it off.
Stocks and bonds may be considered as receivables in favor of the company
and, consequently, may be recorded in the account Notes receivable, but they
may also be recorded in the account Investments in securities.
5.7 Discounted note receivable.
Notes Receivable Discounted These are notes receivable that have been
transferred or sold by endorsement and for the amount of which the endorser is
liable for the contingent obligation.
5.8 Journal entries of notes receivable.
Goods sold on credit
Services provided
Loan commission
Payment of fees
5.9 Bill of exchange.
A bill of exchange is a collection document ordering the payment of a certain
sum of money on the maturity date. It is used as a means of payment and
financial guarantee.
This document is generally used by a seller to guarantee payment for the sale
made. Through the bill of exchange, the seller can provide financing to its
customers with the guarantee that it will collect the money on the maturity date.