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Topics - MD. ABDUR ROUF

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46
Summary of Financial Statement (Ratio) Analyses

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BBA Discussion Forum / Simple, Compound and complex Journal entry
« on: November 06, 2016, 09:47:54 AM »
Simple Journal:
A simple journal entry has one debit and one credit head or element. For example: invested tk. 10,000 in his business.
                 Cash       10,000   
                     Capital              10,000
Compound journal:
A compound journal entry is an accounting entry which effects more than two account heads. A compound journal entry may combine two or more debits and a credit, or a debit and two or more credits, or two or more of both debits and credits. For example: Invested cash Tk. 10,000 and Equipment Tk.20,000  in his business.
         Cash                 10,000   
         Equipment       20,000   
               Capital              30,000

Complex Journal:
A complex journal entry is a journal entry involving more than 3(three) account heads or elements in which there are multiple debits and multiple credits. For example: Purchased office furniture Tk.30,000, machinery Tk.20,000 and supplies Tk.15,000 by paying cash Tk.10,000 and balance issuing a note.
         Office Furniture       30,000   
         Machinery               20,000   
         Supplies                 15,000   
                       Cash                          10,000
                       Note payable             55,000

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Departments / Simple, Compound and complex Journal entry
« on: November 06, 2016, 09:27:27 AM »

Simple Journal:
A simple journal entry has one debit and one credit head or element. For example: invested tk. 10,000 in his business.
                    Cash      10,000   
                           Capital      10,000
Compound journal:
A compound journal entry is an accounting entry which effects more than two account heads. A compound journal entry may combine two or more debits and a credit, or a debit and two or more credits, or two or more of both debits and credits. For example: Invested cash Tk. 10,000 and Equipment Tk.20,000  in his business.
                 Cash           10,000   
                 Equipment   20,000   
                          Capital         30,000

Complex Journal:
A complex journal entry is a journal entry involving more than 3(three) account heads or elements in which there are multiple debits and multiple credits. For example: Purchased office furniture Tk.30,000, machinery Tk.20,000 and supplies Tk.15,000 by paying cash Tk.10,000 and balance issuing a note.
                   Office Furniture   30,000   
                   Machinery          20,000   
                   Supplies          15,000   
                               Cash                       10,000
                               Note payable      55,000

49
Business Administration / First PhD Awarded from IBA
« on: April 25, 2016, 12:11:37 PM »

Md. Abdur Rouf, has been awarded Doctor of Philosophy (PhD) in AIS from IBA, by the University of Rajshahi during its recent syndicate meeting. His thesis topic was “Firm-specific Characteristics, Corporate Governance and Voluntary Disclosure in the Annual Reports of Listed Companies in Bangladesh”. The thesis was completed under the joint supervision of Professor Dr. Md. Aktar Uddin, Professor & Ex-director, IBA, University of Rajshahi and Professor M. Abdullah-Al Harun, Professor & Ex-chairman, Department of Accounting and Information Systems (AIS), University of Rajshahi, Bangladesh. He has published more 20 articles in high index international and national Journals. He has also written five Books on (i) Principles of Accounting (ii) Intermediate Accounting (iii) Cost Accounting (iv) Management Accounting (v) Accounting Theory. At present, he is working as an Assistant professor of Accounting, Department of Business Administration, Daffodil International University, Bangladesh.

50
Business Administration / Purchase Discount
« on: March 22, 2016, 11:21:36 AM »
Purchase Discount: Purchase discount is a policy by which the seller tries to make the collection from the buyer sooner. The seller offers a credit term that tells the amount of discount and discount period. A very common term is 2/10, n/30 or 2/10EOM, n/60. This means 2% discount is available if the amount is paid within the first 10 days and net amount must be paid within 30 days or This means 2% discount is available if the amount is paid within the first 10 days of the next month and net amount must be paid within 60 days.

51
Business Administration / Free on Board
« on: March 22, 2016, 10:01:02 AM »
Free on Board: Free on Board (FOB) determines which party of a business transaction is responsible for shipping charges and also refers to the location where ownership of merchandise inventory is transferred from the seller of an item to the purchaser. There are four basic FOB types: FOB Destination, FOB Origin, FOB Shipping Point and FOB Shipping Point, Freight Prepaid. FOB Destination requires that the seller of the item pay for the shipping costs of the item. In F.O.B. Origin and FOB Shipping Point, the purchaser of the item pay for the shipping costs of the item. FOB Shipping Point, Freight Prepaid requires that the seller of the item pay for the shipping cost of the item, then bill the purchaser of the item for the amount of the item plus the shipping costs. FOB also refers to the point in time when ownership of the item changes from seller to purchaser. In FOB Destination, ownership is transferred to the purchaser when the item is delivered to the purchaser's facility. FOB Origin and FOB Shipping Point require ownership to be transferred to the purchaser when the carrier picks the item up from the seller's facility.

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the signaling theory assumes that firms with higher performance use financial information as a tool to transmit signals to the market. Signaling theory is useful for describing behavior when two parties (individuals or organizations) have access to different information. Typically, one party, the sender, must choose whether and how to communicate (or signal) that information, and the other party, the receiver, must choose how to interpret the signal (Rouf, 2015). 
Signaling theory is focused on information asymmetry among parties that are involved in the allocation of firm funds. Financial markets are based on contractual relationships that occur under conflicting conditions where, if one market player benefits, another loses. Contractual relationships reflect economic decisions which, when approached rationally are based on the quality, the reliability, and the timeliness of information related to the contract “Insiders (Managers and Owners) know better”–When Firm’s future genuinely looks good(i.e. High forecasted Cash Flows, Earnings, NI, and ROE) then managers will choose to raise financing through debt (or Bonds or Loan) because they do not want to share the financial gain with more shareholders. Rather they prefer to take on debt and pay a small interest to the debt holders. There is almost no risk of default. When Firm’s outlook looks bad, then managers will choose to raise capital by issuing equity (or Stock) to be able to share the likely losses amongst more shareholders (Owners). If they took debt and couldn’t repay it, they might default and be forced to go bankrupt.

53
Business Administration / Agency theory
« on: March 09, 2016, 02:48:31 PM »
An agency theory is relationship as “a contract under which one or more persons (the principals) engage another person (the agent) to perform some service on their behalf which involves delegating some decision making authority to the agent”. The theory models the relationship between the principal and the agent. In the context of the firm, the agent (manager) acts on behalf of the principal (shareholder)
A major issue with respect to the firm is the information irregularity between managers and shareholders. In this agency relationship, insiders (managers) have an information advantage because owners cannot accurately evaluate and determine the value of decisions making. So mitigate these agent-shareholder conflicts, formal contracts are thus negotiated. In short way, Agency theory indicates reduces the conflict between the shareholder (principals) and management (agent) (Rouf & Harun, 2011).

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