CPA Reviewer in Business Law. Ampongan, Omar Erasmo. 2,475.00 Berbano, Alfred. CPA Reviewer in Taxation. Free download as word doc (c), pdf. For cpa board exam. Reviewer in taxation by ampongan reviewer in. Last Updated: 4th October 2018. PDFs Similar To cpa reviewer in. Ateneo-Central-Bar-Operations-2007-Civil-Law-Summer-Reviewer Sales-Reviewer BLT Pre-board BLT Theory Donors Tax - Theory LAW ON NEGOTIABLE INSTRUMENTS Law on Partnership Obligations and Contracts - Kaichi E. Theory LAW ON NEGOTIABLE INSTRUMENTS Law on Partnership Obligations and Contracts - Kaichi E. Introduction There has been a flurry of sensational press accounts in recent months about the taxes paid by large corporations. These stories have reignited an ongoing debate over the different ways in which a company’s profits and tax liability are presented to shareholders on financial statements and what is reported to the IRS on a company’s tax return. While the differences between book and tax accounting are no doubt confusing to many, it is entirely reasonable that there be considerable differences between the two practices. After all, corporate accounting standards are typically set by the independent Financial Accounting Standards Board (FASB), while the Internal Revenue Code is a product of the political process between Congress and the While House. Tax rules are driven by broader public policy concerns rather than adherence to formal accounting practices. So while Generally Accepted Accounting Principles[1] (GAAP) are intended to insure uniformity of companies’ financial statements and accounting methods, similar activities may be treated very differently for tax purposes.[2] Therefore, it is possible for the financial reports of a company to differ from the tax returns prepared for the IRS because of the different accounting methods. The following are just three of the most common textbook differences between book and tax accounting: 1) Cash-Based vs. Accrual-Based Accounting While certain activities of a corporation may be recorded on a cash basis for tax accounting, most activities accounted for in its financial statements are done so using what is known as the accrual method. For example, when a company receives payment for a service or product, it is immediately taxable income in the view of the IRS (unless it is deferred income[3]). However, on a financial statement, the matching principle must be used under U.S. This principle, used in book accounting, ensures that the income generated by an output and the expense incurred for that output are recognized in the same period. The following simple example is illustrative: A magazine company is selling year-long subscriptions to its publication. Microsoft Visual Studio 2005 Pro Final Dvd Iso Torrent. Hyde Park Group. Visual Studio. The Microsoft Visual C++ 2005 Redistributable Package (x86). Visual Studio Ultimate 2013 Update 1 Espa. Visual Studio Ultimate. Microsoft Visual Studio is a complete set of development tools for building ASP.NET Web. Microsoft visual studio 2005 pro final dvd iso 書き込み. ![]() The cost of printing each issue is $2 and the revenue generated by each issue sold is $5. A consumer buys a year-long subscription on August 1st and the company immediately receives $60. In the eyes of the IRS, this is immediately taxable income in the current year. However, for book accounting purposes, the company (using US GAAP) matches the revenue of each month’s issue with the cost associated with that copy. In this manner, the company will only have made a $15 profit by the end of the year. They must, however, pay income tax on the full $36 profit of the initial transaction. In this case, a $21 difference exists between book and tax profit. This difference results in a lower income tax liability on the company’s financial statement than what is actually owed to the IRS. Accrual-based accounting can be used by any company for internal bookkeeping; however, it is mandatory if a business has sales of more than $5 million or inventory and sales of $1 million on an annual basis.[4] 2) Treatment of Depreciation Depreciation is technically defined as “a method of allocating the cost of a tangible asset over its useful life. Businesses depreciate long-term assets for both tax and accounting purposes.”[5] Companies generally use two main types of depreciation, although variations of each exist: straight line[6] and accelerated.[7] Table 1 gives examples of straight line and accelerated depreciation of an asset originally valued at $100,000, with an expected salvage value (the price for which it can reasonably be sold at the end of its use by the firm) of $10,000 after 10 years. In the case of straight-line depreciation, an identical percentage of the difference between initial and salvage value is depreciated every year (in this case $9,000/year, 10 percent of ($100,000-$10,000=$90,000)), resulting in a book value equal to salvage value at the end of the asset’s useful period. On the right side of the table is an example using double-declining depreciation (a specific type of accelerated depreciation). Using this method, 20 percent of the asset’s book value is depreciated each year. As the table shows, this leads to higher depreciation (which is tax-deductible) during the initial years of the asset’s life than in the final years. Both methods, however, yield the same book and salvage value of $10,000 after 10 years.
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