Unit 2 AOS 1 Flashcards
What is taxation regulations
Compulsory payments of a proportion of earnings to the government
Types of taxation
Company tax -> 30% on profits 4 bus turning over over 10mil annually or 20% under 10mil
Personal income tax -> increase as wage increase.
GST = broad based tax of 10% on most g/s and other items sold or consumed in Aus
Fringe Benefit tax = payment to an employee, but in a different form to a salary or wage
Stamp duty = tax that the state and territory gov.t’s charge for certain documents or transactions
Land tax = an annual tax levied at the end of the calendar year on property you own that is above the land tax threshold
What is worksafe insurance
= covers employers for the costs of benefits if employees are injured or become ill because of work
What are Record Keeping Strategies
- > Categorises transactions which provide info used 4 bus reports
- Can be completed manually or electronically h/r ATO requires a bus 2 keep records 4 5yrs
- Allow bus 2 identify transaction + use inform to make informed decisions about running bus
Why Record Keeping Strategies are useful
1) Enables bus to accurately keep track of financial transactions
2) Enables bus 2 provide financial transactions that need to be reported when lodging tax return
3) enables bus 2 conduct valid audits
4) enables a bus 2 form accurate bus reports
What is the Accounting process
SRRA
1) Source Document = document providing evidence of transaction and details of it
2) Recording = sorting, classifying + summarising info contained in source doc. 2 make more useful
3) Reporting = prep. of financial statements communicating financial information 2 bus stake-holders
4) Advice = provisions to the owner of a range of options 2 aims / objectives + recommendations
What are source documents
= Pieces of paper or electronic documents that provide evidence transaction has occurred + details of transaction itself
What is a cash book
= a financial journal containing all cash receipts + payments inc. bank deposits + withdrawals.
Entries used 2 create accurate records
What is a preparation of income statement
= 1 of 3 important financial statements used 4 reporting a company’s financial performance over a specific accounting period
-> it shows revenues + expenses /+ calculate net profits
What is a preparation of balance sheets
= Summary of all bus assets ( what it owns ) and liabilities (what it owes)
-> shows how much $ you would have if you sold all your assets and paid off all debts
What is the Australian competition and consumer commission (ACCC)
= independent authority promoting competition and honesty between bus + c’ers
-> prim responsibility = ensure individuals + bus comply with Aus comp, fair trade + consumer protection laws under comp + consumer act.
What are the objectives 2 achieve the ACCC’s purpose
1) Maintaining and promoting competition
2) Protect interest + safety of c’er + support fair trade in markets
3) promoting economically efficient operation of + investment in infrastructure + identify market failures
4) Undertaking market studies and inquiries 2 support competition, consumer + regulatory outcomes
Registering a bus. name process
1) select appropriate name
2) obtain ABN / ACN
3) register bus name
What is PAYG tax
where an employer withholds tax on behalf of the employee and pays it to the ATO directly. If the employee withholds too much tax, the employee will receive a refund @ end of the financial year.
Purpose of a bank account
- Manage + track money entering + leaving account of bus
- Used 2 track financial position + allows separation b/n personal + bus transactions
