Financial and Managerial Accounting

Our Financial and Managerial Accounting Course is designed to give Owners and Managers a real world understanding of the numbers side of their enterprises. In discussing the accounting concepts that are so important to the continued success of your company and your career, we provide a deeper understanding in non-technical language of the accounting issues that affect today’s management decisions.
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The Chain of Evidence

Being able to have a Proof of Income in the event of Audit is all about Income Verification through a proper Chain of Evidence. Bookkeeping and Accounting for Income Tax is an exercise in following the rules and providing the proper documentation for Proof of Income. We do this through putting together an iron clad Chain of Evidence.

 

The Income Side of an Income Tax Return is difficult to prove because income moves from one place to another. Sometimes it starts in Invoicing and an Accounts Receivable Journal. Other times it begins at a cash register and a credit card terminal with Sales Receipts. But then it moves into Bank Statements and Petty Cash Receipts to Sales Journals and Cash Receipts Journals. From there it moves into Financial Statements, Sales Tax Returns, and Income Tax Returns.

The point is that it all needs to match within certain limits. If you begin with $500,000 going into your cash register and only put $300,000 in gross sales on your income tax return, you are probably going to have some problems. The Chain of Evidence needs to match from beginning to end.

 

Keywords:

  • Accounting Income

  • Accounting for Income Tax

  • Proof of Income

  • What is Proof of Income

  • Income verification

  • Chain of Evidence

  • Evidence Chains

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