Opening entry in accounting refers to the primary entries of business at the beginning of each fiscal year or the beginning of its establishment. It involves the business’ assets, liabilities, and equity that are stated in a balance sheet. Its function is to assess where the business is at present with regards to financial or accounting status.
How to: Opening Entry with Examples
Here, two cases of opening entry will be discussed: (1) a newly-established business and (2) a business’ opening entry in a new fiscal year.
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- tracing of stocks in the system of real-time;
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Tax-free is a system for returning the amount of value-added tax (VAT). The VAT is refunded on purchases made by foreign citizens when they cross the border of the country in which they were purchased. The refund amounts usually range from 8% to 25% of the amount of the tax free purchase, depending on the country where the shopping took place.
Legal entities can also return a portion of the money spent – there is a tax-free business system for them to return the amount of VAT on expenses for foreign business trips. So, every shopper and traveler must know the tax free definition.
Thus, since you are not a taxpayer of the country where your purchases were made, you can get a certain amount of money back for them, including VAT. However, you can only do this in stores that support the tax-free program.
The General Federal program or social security Program is a program of insurance for old age, loss of a breadwinner, and disability. The General Federal program is the only, although the largest pension program that has a distributive nature. All other pension programs, both public and private, act as accumulative systems.
The General Federal program was introduced by the law on social security and adopted in August 1935 by President F. Roosevelt. After the Second World War, and especially recently, OFP changed very quickly. From 1950 to 2000, payments under the program increased from $1 billion to $407 billion., and in 2011, they reached $873 billion. The number of recipients of pensions and other benefits for 1950-2011 increased from 3.5 million to 60 million people.
The basis of the revenue part of the American budget (about 70%) is federal taxes. The most important tools for managing the level of income of the population are several types of taxes:
- income tax on the wages of individuals and self-employed entrepreneurs;
- mandatory corporate tax on excess profits of enterprises;
- wealth tax;
- sales tax and excise taxes;
- contributions to the social insurance bodies;
- unemployment tax.
Tax rates at the federal level are unchanged for all categories of payers. The object of taxation is the company's net profit or individual’s income.
Many businesses are required to produce a document, such as an income statement. This source assumes the inclusion of figures that reflect how effectively the company is operating — in terms of revenue generation and business profitability. It is quite easy to prepare the income statement.
Income statement preparation in few steps
Some bookkeepers often ask, “What goes on an income statement?”. The income statement includes the following main items: profit (loss) as the results of the sale of goods or services, operating revenue, and expenses, income, and expenses incurred as a result of non-operating activities, expenses of the organization for the production of products.
Since making a profit is a goal of most organizations, the most important function of the accounting system is to provide information on the profitability of its activities. Funds received from profitable work may remain at the enterprise in order to finance the diversification of its activities, or be distributed in the form of dividends between owners of shares.
Both the owners and managers of the enterprise want to know the size of the profit or loss incurred. The income statement is what people focus the most when they analyze the company. This statement tells how much a company might earn in a given period, and it is always related to a period (week, month, year).
There are many types of income statement. Some of them are used often, and others are used quite rarely. The most experienced accountants are acquainted well with the following types:
- Classified income statement;
- Comparative income statement;
- Condensed income statement;
- Contribution margin income statement;
- Cash basis income statement
- Partial income statement.
All of them have a different structure. Thus, one should use different methods and techniques of accounting to work with them.