What is the relationship between accounting and taxation?
Accounting involves the preparation of information for the purposes of control and decision-making and may require interpretation as well as simply recording factual information. The main purpose of taxation is usually to raise revenue but it is also used as an instrument of government economic and social policy.
What is the difference between financial reporting and tax reporting?
Financial reporting accounting tracks the funds flowing in and out of a business and studies the relationships between these numbers. Tax reporting accounting uses much of the same information compiled in a company’s financial reports to prepare, file and pay a range of state and federal taxes.
Why taxation authorities and employees are interested in financial statement analysis?
Employees are interested in the company’s profitability and stability. They are after the ability of the company to pay salaries and provide employee benefits. Financial statements are important to tax authorities to ensure the accuracy of taxes and additional duties declared and paid by the company.
Why do tax authorities need financial information?
Government entities (tax authorities) need financial statements to ascertain the propriety and accuracy of taxes and other duties declared and paid by a company. Vendors who extend credit may use financial statements to assess the creditworthiness of the business.
What is the difference between financial accounting and tax accounting?
While accounting encompasses all financial transactions to some degree, tax accounting focuses solely on those transactions that affect an entity’s tax burden, and how those items relate to proper tax calculation and tax document preparation.
What is the difference between financial and tax accounting?
What is the importance of financial reporting?
In simple terms, a financial report is critical for understanding how much money you have, where the money is coming from, and where your money needs to go. Financial reporting is important for management to make informed business decisions based on facts of the company’s financial health.
What is the difference between financial accounting and cost accounting?
Financial accounting involves the preparation of a standard set of reports for an outside audience, which may include investors, creditors, credit rating agencies, and regulatory agencies. Cost accounting involves the preparation of a broad range of reports that management needs to run a business.
What is finance accounting and taxation?
Certificate course in finance Accounting and Taxation is teaching students how to make a career in this field. Students who wish to pursue the program should have an inclination towards commerce and accounting skills. It helps the students to prepare accounting information for people outside the organization also.
Do financial accounting and tax accounting require the same record keeping?
Financial accounting and tax accounting require the same recordkeeping and there should be no difference in results between the two accounting systems. Sales Taxes Payable is debited and Cash is credited when companies send sales taxes collected from customers to the government.