Which branch of accounting embraces the preparation of various tax returns and tax planning?

Branches of Accounting and Users of Accounting Information

Exercise 2-1: IDENTIFICATION

Instruction: Identify the following statements.

1.It is primarily centered on the critical examination of financial statements by an independent

CPA to express an opinion regarding the fairness of the contents of the financial statements.

Auditing

2. It embraces the preparation of various tax returns and tax planning necessary to minimize

impact of taxed on the firm. Tax Accounting

3.It provides assistance to the management. Accountants generally provide industrial advice to

their clients regarding accounting, finance, budgeting, business policies, and organization

procedures, systems, product costs, distribution and other business activities. Management

Accounting

4.This is primarily concerned with the recording and classifying of business transactions

culminating in preparation of general-purpose financial statements or reports regarding the

business’ financial position, operating results and cash activities in accordance with the GAAP.

Financial Accounting

5.This refers to the accounting for the government and its instrumentalities, focusing attention

on the custody of public funds, the purpose or purposes to which such funds are committed,

and the responsibility and accountability of the individuals entrusted with such funds.

Government Accounting

i.Tax Accounting – embraces the preparation of various tax returns andtax planning necessary to minimize the impact of taxes on the firm. Taxaccountants are thus specialists in both tax compliance and taxplanning.Public Accounting (Practice in Public Accountancy)when accountantsoffer their professional services to clients like other professionals (i.e.doctors, lawyers, dentists, engineers) do. An accountant who engages inpublic accounting is not an employee of a client company. Public accountingoffers:a. External Auditing – centers on the critical examination of financialstatements by an independent CPA to express an opinion regarding thefairness of the contents of the financial statements.An audit does not cover 100% of accounting records, instead the CPAreviews a statistically selected sample of records and then issues anaudit report.b. Management Advisory Services – provides assistance to themanagement. Accountants generally provide industrial advice to theirclients regarding accounting, finance, budgeting, business policies andorganization procedures, systems, product costs, distribution and otherbusiness activities.12 |P a g eMODULE 1: THE THEORETICAL FRAMEWORK OF ACCOUNTING

c.Tax Services – deals with the accountant’s preparation of the client’sincome tax returns, business and transfer taxes. He represents theclient in tax assessment and investigations conducted by the BIR.Tax accountants must be constantly familiar with the dynamic tax laws,BIR regulations and local tax laws affecting their clients to effectivelydispense advises regarding tax minimization.Business Organizations Served by AccountantsBusiness is any economic activity conducted primarily for profit. Toengage in business is to supply goods and services to earn profit or income.Below are the most common forms of businesses served by accountants.1.Sole or Single Proprietorship – This is a business entity owned by oneperson called “sole proprietor”. A practice of profession (i.e. dentist,doctor, lawyer, engineer, CPA) owned by an individual practitioner isalso an example of a single proprietorship business.Table 3: Advantages and Disadvantages of Sole ProprietorshipAdvantagesDisadvantagesEasiest to start and set-up;only few legal requirements.Only one (owner) decides forthe business.All profits are for the owners.The owner, not the business istaxed.Easy to dissolve.Unlimited liability- owner islegally liable for all businessdebtsLimited resources (capital,managerial skills, etc.)All losses are borne by theowner.Limited life – business isautomatically terminated dueto owner’s death, insanity orimprisonment2.Partnership – a business entity owned by two or more persons called“partners” who have agreed to contribute money, property andindustry to a common fund with the intention of dividing the profitsamong themselves.

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Tags

Accountant, Certified Public Accountant

Which branch of accounting embraces the preparation of various tax returns and tax planning necessary?

Which branch of accounting embrace the preparation of various tax returns and tax planning necessary to minimize the impact of taxes on the firm?

Is tax accounting a branch of accounting?

Which branch of accounting that is primarily involved in the preparation statements?