Tax Returns and Auditing Quiz

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Questions and Answers

What is the primary focus of tax planning?

  • Maximizing the tax burden
  • Minimizing the tax burden within taxation legislation (correct)
  • Ensuring compliance with accounting standards
  • Conducting internal audits

Who typically performs internal auditing?

  • Government auditors
  • Employees of the company (correct)
  • Taxation authorities
  • Independent professional accountants

What is the key purpose of external auditing?

  • Ensuring compliance with taxation legislation
  • Maximizing profits for the company
  • Providing an opinion on the fairness of financial statements (correct)
  • Preparing income tax returns

What distinguishes government accounting from other branches of accounting?

<p>Custody of public funds in government entities (A)</p> Signup and view all the answers

In auditing, what does an independent professional accountant do?

<p>Provides an opinion on the fairness of financial statements (A)</p> Signup and view all the answers

What type of users are the owners and stockholders considered in the context of accounting information?

<p>Internal users (A)</p> Signup and view all the answers

Which factor is NOT considered by creditors when making lending decisions?

<p>Profitability (B)</p> Signup and view all the answers

Which statement is true regarding the Bureau of Internal Revenue (BIR)?

<p>It implements policies related to tax regulations. (A)</p> Signup and view all the answers

What type of users are potential investors in the context of accounting information?

<p>External users (D)</p> Signup and view all the answers

Which financial statement shows the basis for tax computation, specifically the operating income?

<p>Statement of profit or loss (D)</p> Signup and view all the answers

For employees, what is a factor considered when deciding whether to continue the contract for employment?

<p>Security of remuneration (B)</p> Signup and view all the answers

What is the primary function of the Bureau of Treasury authorized by the Department of Finance?

<p>Receive and keep national funds (D)</p> Signup and view all the answers

Which organization is responsible for keeping the general accounts of the government and submitting an annual report to the President of the Philippines and Congress?

<p>Commission on Audit (COA) (B)</p> Signup and view all the answers

In the CPA Examination, which subject covers dealing with the examination of financial statements, compliance, and operational audits?

<p>Auditing (B)</p> Signup and view all the answers

What is the main focus of Taxation in the field of accountancy?

<p>Ensuring compliance with tax laws (B)</p> Signup and view all the answers

Which area of accounting primarily deals with upgrading the quality of teaching in accounting education through Continuing Professional Development (CPD)?

<p>Accounting Education (B)</p> Signup and view all the answers

What is the focus of Accounting Research in the field of accountancy?

<p>Continued research studies for professional growth (D)</p> Signup and view all the answers

Flashcards

Tax Services

Preparation of tax returns to be submitted to government agencies and tax planning to minimize tax burden within legal boundaries.

Auditing

Examination of financial records to ensure accuracy, compliance with laws, and fairness of financial statements.

Government Accounting

Management of public funds in national and local government offices, ensuring proper handling and disbursement.

Users of Accounting Information

Individuals and entities that use accounting information for decision-making.

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Accounting Information Types

Financial statements like the Statement of Profit or Loss provide insights into performance and tax calculations.

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Bureau of Internal Revenue (BIR)

Regulates tax guidelines, implements policies, and monitors tax payments.

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Bureau of Treasury

Receives and keeps national funds, manages disbursements, and maintains financial transactions.

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Commission on Audit (COA)

Keeps government accounts, sets accounting rules, and submits annual reports.

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Accounting Education

Improving accounting education through training and development programs.

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CPA Exam Subjects

Financial Accounting and Reporting, Advanced Financial Accounting and Reporting, Management Advisory Services, Auditing, Taxation, Regulatory Framework for Business Transactions

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Accounting Research

Research studies for advancement in accounting, leading to new procedures, principles, and standards.

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Internal Auditing

Examines accounting procedures to ensure they are being followed correctly.

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External Auditing

Analyzes financial records to provide an opinion on the fairness of financial statements.

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Department of Budget and Management

Formulation and execution of the government's financial plan.

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Internal Users

Individuals like owners, managers, and employees who use accounting data inside the company.

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External Users

Groups such as creditors, investors, and regulators who use accounting data outside of the company.

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Statement of Profit or Loss

Shows the financial results of a company over a period.

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Study Notes

Tax Services

  • Produces tax returns to be filed to appropriate government agencies
  • Involves tax planning to minimize tax burden within the premise of taxation legislation
  • Types of tax returns: Income Tax, VAT, Withholding Tax, Real Estate Tax

Auditing

  • Examines an organization's financial records to determine accuracy and compliance with rules and laws
  • Internal auditing examines whether accounting procedures are being followed
  • External auditing examines the books of accounts and renders an opinion on the fairness of financial statements

Government Accounting

  • Deals with the proper custody of public funds in national and local government offices
  • Offices responsible for accounting responsibilities:
    • Department of Budget and Management: formulation and implementation of the National Budget
    • FABM 1 UNIT 3
  • Government accounting involves the custody of public funds in cities, provinces, municipalities, and barangays

Users of Accounting Information

  • Internal users: owners and stockholders, management, employees
  • External users: creditors, suppliers, regulatory and tax authorities, potential investors, public

Accounting Information

  • Types of accounting information:
    • Information on Net Profit or Net Loss: Statement of Profit or Loss shows financial performance
    • Information for Tax Management: Statement of Profit or Loss shows basis of tax computation

Government Agencies

  • Bureau of Internal Revenue (BIR): taxing authority that regulates guidelines, implements policies, and monitors tax payment
  • Bureau of Treasury: authorized to receive and keep national funds, manage disbursements, and maintain financial transactions
  • Commission on Audit (COA): keeps general accounts of the government, promulgates accounting rules, and submits annual reports

Accounting Education

  • Deals with upgrading the quality of teaching in accounting education through Continuing Professional Development (CPD)
  • CPA Examination Subjects:
    • Financial Accounting and Reporting
    • Advanced Financial Accounting and Reporting
    • Management Advisory Services
    • Auditing
    • Taxation
    • Regulatory Framework for Business Transactions

Accounting Research

  • Deals with continued research studies for professional growth and advancement in the field of accountancy
  • Aims to discover new accounting procedures, principles, and standards tailored-fit to the global economy

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