Value Added Tax is an indirect tax imposed on the import and supply of goods and services at every stage of production and distribution, with some exceptions. Value added tax is applied in more than 160 countries around the world.
When the people who are subject to the added value of the added value by selling a service or providing a service, they must impose a tax with a 15 % tax that contains the final price price that the person who is subject to the tax is to obtain the 15 % of the 15 % of the one who has been enrolled in the process of being applied to it, or for the fact that they are in the process of being applied to it. Their revenues to be supplied later to the Authority
Cost of Goods Sold (COGS): An expense that represents how much it costs to produce your offerings. COGS is a critical factor when determining the profit of your business.
Debit and Credit: equal but opposite entries in your books (eg one increases an account and the other decreases the opposite account).
Inventory: This includes raw materials stored, items in the process of production, and finished goods available for sale.
Assets: The tangible (tangible) or intangible (intangible) property of your business that adds value to your business.
Liabilities: The money your business owes. You can have short-term liabilities that are due within one year and long-term liabilities that are not due within one year.
Equity: The value of your business after deducting liabilities from assets.
Revenue: The amount of money your business brings in from sales.
You can use cash, accrual, or modified cash basis accounting to manage your books.
Cash based accounting is the simplest way to manage your books. With cash-based accounting, you can only record transactions when you physically make or receive a payment. This is a single entry accounting system, which means that you record each transaction once.
With accrual accounting, you can record money whenever a transaction occurs, even if you don’t actually give or receive money (such as when you issue an invoice or write an invoice). This is a double-entry accounting system, which means that you must record two entries for each transaction.
When making transactions, you must ensure that your books correctly reflect the transaction. Think of debit and credit as two sides of the scale that should balance equally—if the debit increases an account, the credit should decrease the corresponding account.
Debt increases both asset and expense accounts. Debt reduces liability accounts, equity and revenue. Credits do the exact opposite.
Appropriations increase liability accounts, equity, and revenue. Reducing asset and expense accounts.
Debits and credits are the foundation of double-entry bookkeeping, but they can be difficult to understand, let alone to keep. Our handy chart should help clear up any remaining confusion about debit and credit processes
Accounts Payable: Money you owe to sellers (aka liability). Record accounts payable when you buy something without paying immediately.
Accounts Receivable: Money owed to your business (aka an asset). Record accounts receivable on your books when customers buy something on credit.
To file your business tax return, you need a taxpayer identification number (TIN), financial records, and the appropriate tax return form.
LLCs file taxes using a form that matches how you are taxed (i.e. sole proprietorships, partnerships, or corporations).
yes! You can claim a tax deduction or credit to reduce your tax liability.
Both deductions and credits help you offset the cost of qualified business expenses. Deductions reduce your total taxable income. On the other hand, a business tax credit is a dollar-for-dollar reduction of the tax liability.
An audit is the examination of your company’s financial records. During an IRS audit, the IRS reviews your records and checks for discrepancies in your books.
Receiving an audit does not necessarily mean that you have done something illegal. Sometimes the IRS picks a random business to audit. And sometimes the IRS will audit a business if a small business’s tax returns look suspicious.
Certain actions can trigger an IRS audit, such as:
Invoices are invoices that companies send to customers to request payment. Create invoices if you provide goods or services to a customer without requiring immediate payment.
To price your products or services, you need to know the prices of your target market and competitors. And make sure you price your offers high enough above your expenses – all of your expenses – so that you can turn a profit.
You can also use strategic pricing methods, such as:
If you extend credit to customers, the success of your business may depend on when customers finally pay you. And sometimes, it can be like pulling teeth to get clients to pay you on time.
Take a look at some of the ways you can encourage early or on-time payments:
If your business has a physical presence in a country that charges sales tax, you must collect it from customers at the point of sale. Sales tax is a percentage of a customer’s purchase. Your state, province, or city determines the sales tax rate you must collect
To determine the financial health of your business, you need to know how to calculate profit. Use the following net profit formula:
Net Profit = Revenue – Cost of Goods Sold – Expenses
If you want to increase net profit, you must reduce expenses and increase revenue. Easier said than done, right?
There are several ways you can reduce expenses. You can shop around for different vendors to find better deals on supplies, inventory, and equipment. Or, you can look for expenses that you can reduce or cut out entirely.
You can increase sales by:
You can report the profit of your business by creating an income statement. Your small business income statement, or P&L, summarizes your business’ profits and losses over an accounting period.
Find answers that show high performance standards. The candidate may have designed methods to check for bookkeeping or quality control errors in the data entry process. What you are looking for are answers that help you assess attention to detail and accuracy.
No job candidate can remain completely updated on all of these, but promising applicants will answer this interview question by describing the methods they use to stay as up-to-date as possible with notable developments in the industry. This may include recent attendance at a professional conference or seminar, membership in professional organizations or subscriptions to an impressive variety of industry publications.
Remote workers should be self-starters and work with little supervision. They need to have strong communication skills, and they need to be comfortable with your team’s technology (or show they can pick it up quickly). This is an important consideration if your team is working from home or in a hybrid environment.
Once you’re comfortable with their remote preparation and have gone through all of the accounting interview questions and answers, think about what you’ve learned about the candidate’s soft skills. Do you have a good sense of a potential employee’s level of empathy, tact, and diplomacy, for example? What about their verbal skills? Even if you interview remotely, you should get an impression of their personality and ability to express themselves.
Also consider today’s unpredictable work environment. Of all the soft and hard skills you interview with, the ability to adapt and the willingness to embrace new challenges may be two of the most important components to an accounting professional’s success.
Restaurants are a unique industry. The chart of accounts and the transaction processing and reporting that goes with it are also unique.
While you didn’t go to school for accounting, the person you hired to manage your books did.
Not only must he be well versed in general accounting best practices, but he must also avoid serious accounting errors for the restaurant.
Good restaurant accountants must follow industry best practices.
They must know how to allocate balance sheet and income accounts
Although the Guidelines for Accountants are broad, there are five main principles that underpin accounting practices and the preparation of financial statements. These are the principle of accrual, the principle of historical cost, the principle of preservation, the principle of substance over form, and the principle of conformity.
There are different types of accounts in accounting, namely personal, real and nominal accounts. The real account is then categorized into two sub-categories – intangible real account, tangible real account. Also, there are three different subtypes of personal account which are natural account, representative account and synthetic account
Debit means a recorded entry for a payment or receivable. A debit entry is usually made on the left side of the ledger account book. Therefore, when a transaction occurs in the double entry system, one account is debited while another account is credited
Personal assets are things owned by an individual or family that have current or future value. Common examples of personal assets include: cash and cash equivalents, certificates of deposit, checking accounts, savings accounts, money market accounts, physical cash, and treasury bills.
A T account is an informal term used in a group of financial records that use double-entry bookkeeping. It is called a T account because the bookkeeping entries are laid out in a manner resembling the shape of the letter T. Account headings appear above the letter T.
To succeed in the free market, a business must offer its products at a competitive price. The productivity of a business, that is, its efficiency in producing its goods or services, is the key to success in this field, as good managers ensure that production costs are kept to the lowest possible level.
Steps that the accountant follows to analyze and record business transactions, to prepare financial statements, and to prepare for the next accounting period.
It is an asset of a non-monetary nature, identifiable, and has no physical existence. such as trade names, computer software, licenses and franchises.
There are expenses that are not recognized as intangible assets. Such as expenses for establishing a new legal entity, training expenses, advertising and promotion expenses.
When developing a plan, it is necessary to consider the risks, if they occur, as some risks may be a source of inconvenience only, while some risks may threaten the viability of your business, or the loss of your personal assets. Risk management helps to control and eliminate each risk or the impact of that risk. The most obvious preventive measure that can be implemented is to check any new customer before agreeing to deal with him
There are many projects that are established daily, some of which fail, and few of them succeed. Often failures are easy to prevent. This is to have a better financial and administrative plan. These are two points that any accountant specializing in small projects can help you with. And if you hire an accountant during the planning stage, he will be able to predict the obstacles
inevitable before they occur, and helps you discover ways to prevent them, or deal with them if they happen.
The Authority may impose fines and penalties on taxable persons in connection with violating the terms and conditions of the value added tax stipulated in the Law and the Implementing Regulation 43.
the fine | Description of the violation |
Not less than the value of the tax due and not more than three times the value of the goods or services | Submitting incorrect documents with the intention of evading paying the due tax or paying a value less than the due tax |
Not less than the value of the tax due and not more than three times the value of the goods or services | Transporting goods to or from the Kingdom without paying the due tax |
0.10 Saudi riyals | Failure to register with the tax during the period specified for registration |
0% of the value of the difference between the tax calculated and the tax due | Submitting an erroneous tax return, amending a tax return after submitting it, or submitting any document to the Authority related to the tax due on him, resulting in an error in calculating the amount of tax less than the due amount |
5 – 5% of the tax for which he should have decided | Failure to submit a tax return on time |
A fine of up to 100,000 Saudi riyals | Failure to pay tax on time |
A fine of up to 50,000 Saudi riyals | Failure to keep records and books as specified in the regulation |
A fine of up to 50,000 Saudi riyals | Obstructing the Authority’s employees from performing their duties |
A fine of up to 50,000 Saudi riyals | Violating the provisions of the executive regulations or the value-added tax system |
No, any legal disposal of the ownership of the property or its possession for the purpose of owning it or owning its benefit, whether with or without consideration, is considered exempt from the value added tax and subject to the real estate disposal tax at a rate of (5%) of the total value of the real estate, in the cases of disposal or disposal. its form or use at the time of disposition.
Any legal disposal of the real estate ownership or possession for the purpose of owning it or owning its benefit, whether with or without consideration, is considered exempt from the value added tax and subject to the real estate disposal tax at a rate of 5% of the total value of the property, in case it constitutes a task of disposal. or use it at the time of disposition.
No, as the transfer of ownership of the company through the sale of shares, as a financial instrument, is considered as an exempt supply of financial services. The carrier must not charge value-added tax on this sale.
If a taxable person sells all of his assets that make up his economic activity to another taxable person who carries on the same activity, the transferor and transferee may agree that the sale is purely for the economic activity, and not as a policy or supply of goods. For the purposes of doing so, the transaction must fulfill the criteria and conditions set forth in the provisions of Article 17 of the implementing regulations for the value-added tax system in the Kingdom.
If a taxable person wishes to supply assets (as a transferor) using the rules for the transfer of economic activity, he must obtain confirmation in writing (that the contract states that the transferee also intends for the transaction to be a transfer of an economic activity). The transferor shall consider whether he is required to cancel his registration as a result of this transaction, and shall notify the Authority within 30 days of such transfer. The transferor shall provide sufficient business records to enable the transferee to determine his tax obligations relating to the transferring company at the date of transfer.
The tax treatment applied depends on the nature of the transaction. If the company is sold as a taxable supply of assets, it is allowed to deduct input tax related costs. But if the company is sold as a transfer of economic activity or a one-time accidental sale of shares related to the economic activity of the transferor, the transferor is allowed to deduct the input tax incurred in accordance with the proportional deduction rules for the continuing company. In all cases, the rules for applying the input tax deduction must be carefully studied by the carrier before deduction.