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Deferred tax assets generally arise where tax relief is provided after an expense is deducted for accounting purposes: a company may accrue an accounting expense in relation to a provision such as bad debts, but tax relief may not be obtained until the provision is utilized
A deferred expense, also known as a prepayment or prepaid expense, is an asset representing cash paid in advance for goods or services to be received in a future accounting period. For example, if a service contract is paid quarterly in advance, the remaining two months at the end of the first month are considered a deferred expense.
FIFO and LIFO accounting are methods used in managing inventory and financial matters involving the amount of money a company has to have tied up within inventory of produced goods, raw materials, parts, components, or feedstocks. They are used to manage assumptions of costs related to inventory, stock repurchases (if purchased at different ...
The concept of taxing income is a modern innovation and presupposes several things: a money economy, reasonably accurate accounts, a common understanding of receipts, expenses and profits, and an orderly society with reliable records. For most of the history of civilization, these preconditions did not exist, and taxes were based on other factors.
The sum total of each column should be equal, or "balance." The act of "closing the books" refers to zeroing out all the revenue and expense amounts at the end of an accounting period (typically a fiscal year) and adding the difference to the retained earnings account. This is called a "closing entry."
A bit of accounting theory is helpful to understanding this debate. It is an accounting identity (i.e., an equality that must hold true by definition) that assets equals the sum of liabilities and equity. Equity consisted primarily of the common or preferred stock and the retained earnings of the company and is also referred to as capital.
Accounting fraud. An auditor was murdered, an adviser committed suicide. The largest collapse in Hong Kong history. Texaco: United States: 13 April 1987: Oil: After a legal battle with Pennzoil, whereby it was found to owe a debt of $10.5 bn, Texaco went into bankruptcy. It was later resurrected and taken over by Chevron. Qintex: Australia ...
Precautionary saving is saving (non-expenditure of a portion of income) that occurs in response to uncertainty regarding future income.The precautionary motive to delay consumption and save in the current period rises due to the lack of completeness of insurance markets.