Tax Accounting management.

- Business organizations and companies Accounting Education

are also taxpayers. Tax accounting is a - Accounting education employs
special type of accounting that focuses accountants as educators and
on taxes rather than on financial researchers. Accountants in this field
statements. They make sure that in improve and develop accounting
preparing tax returns, the specific curriculum for colleges, universities, and
policies and rules set by BIR for all other educational institutions to prepare
taxpayers are followed. students for current and future
challenges in the profession.
Government Accounting Fiduciary accounting
- Government accounting is concerned - involves evaluation and handling of
with the systematic collecting, recording, accounts that are managed
summarizing, analyzing, and interpreting by an individual who has been entrusted
of financial transactions related to the with the guardianship and custody of a
expenditures and revenues of business.
government institutions. The objective of Receivership - This refers to the
this field of accounting is to disclose how removal of control of the business or
public funds are being generated and property from its business is placed
spent for the welfare of the public. under a receiver. A receiver is an
independent party appointed by a court
Auditing or the company's creditors (individuals
- field of accounting in which many or a party that lends money and
CPAs offer their services. In auditing, resources to the company)
financial records are carefully examined
to determine their accuracy and fairness. Trust accounting - This involves the
There are two types of auditing, namely, administration and management of
external funds by a trustee (a bank or a trust
and internal auditing. company) for the benefit of individuals
called beneficiaries.
1. External auditing - This refers to the Estate accounting - This refers to the
examination of financial records and preparation and management of
statements in order to give an opinion as financial accounts by a person
to the compliance of a business administering the properties of an
organization's accounting processes individual who has passed away.
with GAAP and the validity and fairness Forensic Accounting
of the presentation of its financial - The word forensic means that it has
statements. External auditing is usually something to do with finding evidence
done by an independent party. that can be presented in a court or can
2. Internal auditing - This refers to the be used in the legal system. Thus,
evaluation of the adequacy and forensic accounting is often referred to
efficiency of the internal control structure as investigative accounting. It involves
of a company by examining its policies the investigation and analysis of
and procedures, segregation of duties, numbers, financial data, and records
and other controls conducted and that are usually presented to a court.
implemented by the
Fund Accounting/Grant Accounting Creditors
- Nonprofit organizations, churches, and, -A business may have different
in some instances, the government, creditors. One example of a creditor is a
receive funds that have specific bank. A bank can be a possible financier
conditions or requirements for of a business. Another example of a
compliance before they are fully creditor
released to the recipient entity. is a supplier.
Accounting Research Credit basis means that the needed
- type of academic research that focuses supplies will be delivered
on the study of the effects of economic to the company without payment yet but
events on accounting processes and the supplier is assured that they will be
how information gathered in this paid.
research affects economic events in Investors- These people utilize their
return. This research is carried out by own money and resources to invest into
practicing accountants. a company. They want to know the
financial status and progress of a
Financial information is utilized by business to ensure the safety and
users to make judgments or wise security of their investment. As such,
decisions regarding investors are also called shareholders.
the business operations. Shareholders of a company provide
shares.
Before you delve more on financial Government and tax authorities - The
information, imagine this scenario: Jake government is also a user of financial
and Harry are best friends. Jake is information. Government and tax
employed as a loan officer in a bank, authorities must determine how much a
while Harry is the owner of a small business earns in order to assess its tax
bookstore. Harry wants to expand his liabilities.
business so he decided to apply for a Regulatory agencies - Regulatory
loan in the bank where Jake works. Both agencies use a company's financial
of them are users of financial information to determine if its financial
information. One is an external user and statements are in accordance with the
the other is an internal user. How are rules and regulations that protect the
they different? stakeholders' interests.
External Users Customers and consumers -
- External users are people outside the Customers may obtain financial
company. This means that they do not information to acquire a picture of the
work in the company and are not directly longevity and
involved in its operations. They are only continuity of a business, especially when
interested in the information generated there is a potential long-term
by financial records in the accounting engagement and interaction between
procedures of the company. them and the
External users can be categorized into business enterprise.
the following: Competitors - These individuals or
organizations offer the same type of
service to the Same group of customers.
Lawmakers and economic planners - Managers - Managers use financial
Having a strong economic structure and information in carefully planning the
keeping abreast of global economic improvement of the business. This
changes are of utmost importance for a allows them to identify the areas that
nation's lawmakers and economic require more attention and the
planners. procedures that need to be checked.
Funding Agency -These organizations Employees and trade unions - The
give a grant or a donation for earning capacity of a business is
humanitarian, social and other causes. important to employees and trade
Types of Financial Statements unions because their wages and bonus
1. Statement of Financial Position - depend on it.
This presents the i assets, liabilities, and Types of Information Needed by
capital as of a given date. The data in Internal Users
this statement provide information about It is important to note that even though
the entity's financial condition. external and internal users are two
2. Statement of Comprehensive different
Income - This shows the financial groups of people, both types of users
performance of a business for a certain depend on the same source of financial
period. It tells how much a business has information-the financial statements.
earned or lost. This statement shows the 1. Audited financial statements -
results of operations of the enterprise for These validated financial statements
a given period of time. verify the accuracy of data presented.
3. Statement of Changes in Equity - These ensure owners and managers
This tells how much of the company's that the accounting procedures
net income, which is shown on the were conducted efficiently and the
Statement of Financial Position, is resulting data are correct and factual.
reinvested in the business. 2. Income tax returns - The information
Drawing/withdrawal is also a deduction from income tax returns allows
to equity account. managers and owners to determine if
4. Statement of Cash Flows - This their taxes have been properly paid by
statement shows the sources or inflows the company and examined by the BIR.
and uses or outflows of cash for a This assures them that they do not have
specific period of time. pending tax obligations.
Internal Users 3. Purchases and costs reports -
- Internal users are people within the Managers and owners may have cost-
company directly involved in business control reports that can serve as sources
operations. They can be categorized into of data which include every cost incurred
three types: owners, managers, and during all business operations (e.g.,
employees and trade unions. purchase of materials, labor cost,
Owners - A business can be considered production cost).
as one of the primary sources of income
of the business owner, which makes him
or her an internal user. An owner
depends on financial information to
determine the profitability and longevity
of his or her business.