What Is Taxation?

What is Taxation?
A means by which governments finance their expenditure by imposing charges on citizens and corporate entities. Governments use taxation to encourage or discourage certain economic decisions. For example, reduction in taxable personal (or household) income by the amount paid as interest on home mortgage loans results in greater construction activity, and generates more jobs. see also taxation principles.

What is Taxable year?
Twelve-month period used as the basis for computing tax on income received during that period. Also called tax year.

What is Tax Year?
Standard 12 month period (such as a calendar year or a fiscal year) used for computing a tax payer's tax liability.

What is Taxable Income?
Gross income from which standard deductions and other allowances have been subtracted.

What is Taxable Value?
Percentage of property value used to determine how much the property owner pays in taxes.

What is Taxable Estate?
An amount calculated as the adjusted gross estate minus any marital deduction property and any charitable deductions.


What is Taxable Equivalent Yield?
Restatement of total income earned from an investment portfolio (including income from tax exempt securities such as municipal bonds) in terms of taxable, for comparing its yield with those of the other investment portfolios.

What is Tax Write off?
Offsetting depreciation, expenses, and losses against tax payer's income.

What is Tax Waiver?
A state issued document that specifies the tax department will transfer stock as indicated. Tax waivers are often used to transfer ownership of property.

What is Tax Sink?
Jurisdiction in which no income tax is imposed.

What is Tax Sheltered Income?
Tax-deferred or tax-exempt earnings.

What is Tax Supplement?
Local tax imposed be a lower government unit (such as a municipality) on the same tax base over which a higher governmental unit (state or federal government) has already imposed a similar tax.

See: Taxation Explanation

Accounting Problem

The Key to learning accounting problems is practice!

• First understand the topic and try to solve with out reading the correct answer.
• Act as you are the teacher, explaining the process of solving the problems as you work. 
• Try working with other students on this task
• Be sure to always double-check the problems for accuracy and completeness.
• Time management is very important in accounting courses. Be sure to keep up wit the work, completing assignments as soon after they are assigned as possible. Set aside time each night to practice the problems.
• If certain problems require that information be entered into specific forms or ledgers. be sure to practice the problems using those forms. Learn what the columns and rows in the forms represent. Learn where specific types of information are to be entered on the form. Learn what types of information are given and what must be calculated. Becoming very familiar with forms is particularly important in income tax accounting courses.

Accounting Theory

Accounting Theory is to provide a logical framework for accounting practice. The basic assumptions, definitions, principles and concepts and how we derive them. It is concerned with improving financial accounting and reporting broad perspective, it includes a conceptual framework, accounting legislation, concepts, valuation models, and hypotheses and theories that allow researchers to analyze accounting in order to explain or predict phenomena related to accounting, such as how users employ accounting data or how preparers choose accounting methods.

The Early History of Accounting

Accounting records dating back several thousand years have been found in various parts of the world. These records indicate that all levels of development people desire information about their efforts and accomplishments.

According to Hain, "The Zenon papyri give evidence of a surprisingly elaborate accounting system which had been used in Greece since the fifth century B.C. and which, in the wake of Greek trade or conquest, gradually spread throughout the Eastern Mediterranean and Middle East." Zenon's accounting system contained provisions for responsibility accounting, a written record of all transactions, a personal account for wages paid to employees, inventory records, and all records of asset acquisitions and disposals. In addition, there is evidence that all the accounts were audited.

There were no organized professions or standards of qualifications, and accountant were trained through an apprenticeship system. Later, private commercial colleges began to emerge as the training grounds for accountants.

These institutions emphasized the quality of value, and discussions of the nature of value in accounting education. Subsequently, widespread speculation in the securities markets, watered stocks, and large monopolies that controlled segments of the U.S. economy resulted in the establishment of the progressive movement at the end on the nineteenth century.



Although most accountants did not necessarily subscribe to the desirability of the progressive reforms, the progressive movement conferred specific social obligations on accountants.

Accountants generally came to accept three general levels of progressiveness:

1. A fundamental faith in democracy, a concern for morality and justice, and a broad acceptance of the democracy, a concern for morality and justice, and a broad acceptance of the efficiency of education as a major tool in social amelioration;
2. An increased awareness of the idea of the social obligation of all segments of society and introduction of the idea of the public accountability of business and political leaders; and
3. An acceptance of pragmatism as the most relevant operative philosophy of the day.

During the period 1900-1915, the concept of income determination was not well developed. There was, however, a debate over which financial statement should be viewed as more important, the balance sheet or the income statement.

The 1904 International Congress of Accountants marked the initial development of the organized accounting profession in the United States, although there had been earlier attempts to organize and several states had state societies. At this meeting, the American Association of Public Accountants was formed as the professional organization of accountants in the United States.