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 Value Added Tax (VAT). Value-added tax (VAT) is distinct from sales tax. Sales tax and VAT are both indirect taxes, in which a tax is collected by the seller and then paid or remitted to the government by the buyer. Sales tax and VAT are frequently conflated in the corporate tax community. Here is a more detailed explanation. The difference between sales tax and value-added tax (VAT) Sales tax is collected by the retailer at the end of the supply chain. End consumers pay sales tax when they purchase goods or services. Businesses don't have to pay sales tax when purchasing supplies or materials that will be resold. Until the sale is complete, no sales tax is collected, and tax jurisdictions don't receive tax revenue. Import tariffs are applied at every stage of the supply chain. This concept is recognized across all aspects of the VAT system. Additionally, all parties within the supply chain charge VAT on their sales. To get a credit for VAT paid on a tax return, small busines

A matching principle is an accounting principle that stipulates that the expenses incurred during a given period must be registered during the same period when the associated revenues are obtained. The above principle recognizes that businesses will need to incur expenses in order to generate revenues. The accounting accrual basis of accounting and adjusting entries is based on the central concept of the accrual basis of accounting. Generally Accepted Accounting Principles are made up of elements that everyone accepts, like recognizing revenue when it is earned (GAAP). The matching principle is founded on the cause and effect relationship. In this case, if there is no cause and effect relationship, the accountants in London will charge the cost to the expense as soon as it occurs. The matching principle is one of the most important concepts of accrual accounting. It states that related revenues and expenses must be matched in the same period. This is done in order to integrate the co

A going concern is an accounting term for a corporation that has the financial resources to continue functioning indefinitely unless it can show otherwise. The ability of a corporation to produce enough money to stay afloat or avoid bankruptcy is sometimes referred to by this word. If a company is no longer in operation, it has gone bankrupt and its assets have been liquidated. Following the dot-com bust in the late 1990s, many dot-com enterprises are no longer viable businesses. Understanding the Situation Going concern principles are used by small business accountants to determine what forms of information should appear on financial statements. Companies that are still operating may report long-term assets at cost rather than current or liquidation value. When a firm's ability to continue operating is not harmed by the sale of assets, such as when a minor branch office closes and its staff are reassigned to other divisions within the firm, the company is still considered a going