Income Taxation

Income Taxation as a Specialized Area of Accounting

One of the specialized area of accounting is income taxation. Preparing an income-tax form entails collecting information and presenting data in a coherent manner; therefore, both individuals and businesses frequently hire accountants to determine their taxes. Tax rules, however, are not identical with accounting theory and practices.

Tax regulations are based on laws that are enacted by legislative bodies, interpreted by the courts, and enforced by designated administrative bodies. Much of the information required in figuring taxes, however, is also needed in accounting, and many techniques of computing are common to both areas.

Another specialized area of accounting is Auditing. Read about Auditing here

A third area of specialization is accounting for nonbusiness organizations.Read about accounting for nonbusiness organizations here

More Accounting Entries

Accounting information can be classified into two categories: financial accounting or public information and managerial accounting or private information.
Read about Financial Accouting here
Read about Managerial Accouting here

Financial Reporting

Traditionally, the function of financial reporting was to provide proprietors with information about the companies that they owned and operated. Read about financial reporting here

Accounting Principles

Accounting as it exists today may be viewed as a system of assumptions, doctrines, tenets, and conventions, all encompassed by the phrase “generally accepted accounting principles.”Read about accounting principles here

The Balance Sheet

Of the two traditional types of financial statements, the balance sheet relates to an entity’s position, and the income statement relates to its activity. The balance sheet provides information about an organization’s assets, liabilities, and owners’ equity as of a particular date (such as the last day of the accounting or fiscal period). Read about income balance sheet here

The Income Statement

The traditional activity-oriented financial statement issued by business enterprises is the income statement. Read about Income Statements here

Regulations and Standards in the United States

Until 1973, accounting principles in the United States had traditionally been established by certified public accountants. Read about Accounting Regulations and Standards in the United States

Source: “Accounting and Bookkeeping”Microsoft® Encarta® Online Encyclopedia

See Also

Bookkeeping in the World