accounting_law_of_mongolia.docVIP

ACCOUNTING LAW OF MONGOLIA CHAPTER ONE GENERAL PROVISIONS Article 1. The Purpose of the Law 1.1. The purpose of the present law is to determine the legal ground for accounting principles, management and institution and to regulate the relationship pertaining to the maintenance of accounting records and the preparation of financial statements of the business entity or organization. Article 2. Legislation on Accounting 2.1. The legislation on accounting is comprised of the present law and other legislation, which is consistent with the present law. 2.2. If an international treaty to which Mongolia is a party is not consistent with the present law, then the provisions of the international treaty shall prevail. Article 3. Definition of the Terms 3.1. In the present law, the following terms shall have the following meanings: 3.1.1. “Accrual basis of accounting” means the recording method, which accepts income when, gained or expense when incurred without respects to whether received or paid money. 3.1.2. “Cash basis of accounting” means the recording method, which accepts income and expense when, received and paid. 3.1.3. “Double entry form” means to doubly record the transaction in debit or credit. 3.1.4. “Primary accounting document” means the document, which proved transactions, has incurred. 3.1.5. “Journal” means an initial record of transaction under the date-order before entry into the general ledger. 3.1.6. “General ledger” means the accounts, which comprise the financial statement of business entity and organization. 3.1.7. “Certified accountant” means the person whom graduated from the university or college, as an accountant profession in bachelor degree or higher. 3.1.8. “Accounting policy document” means regulation, instruction and methodology, which determined the accounting principle on preparation of financial statement and accounting basis. Article 4. Accounting Principles 4.1. The following principles shall be adhered to the accounting of bus