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Does an increase in sales tax payable increase or decrease cash flow?
Increase in sales tax payable increases the cash because if at first place cash is paid then cash will be reduced but if payable is increasing it means cash is increasing as well and it will decrease when all sales tax payable will be paid.
How can we treat taxation while preparing cash flow statements?
if tax is paid then it will be shown in cash flow statement otherwise it will not shown in cash flow statement.
Where does income tax liability go on the cash flow statement?
income tax liability is not part of cash flow statement rather it is part of balance sheet.
How does increased depreciation expenses affect tax-related cash flows?
depreciation is a non cash item which have no physical outflow ... when depreciation is applied on tax cash flow it saves tax resulting in decrease in cash outflow
If decrease in income taxes payable cash flow will be?
If there is decrease in income tax payable amount it will reduce the cash flow from operating activities or cash outflow from operating activity.
Explain the decrease of inventory on a cash flow statement?
decrease in inventory will be shown as increase in cash in cash flow from operating activities as this is increasing the cash.
Cash flow can be said to equal?
It is earnings after tax (EAT) plus depreciation
What effect does the taxes payable account have on cash flow from operating activities for 2009?
The taxes payable account affects cash flow from operating activities by reflecting the timing of tax payments. An increase in the taxes payable account indicates that a company has accrued tax liabilities without yet making cash payments, which effectively boosts cash flow from operating activities in the short term. Conversely, a decrease in the taxes payable account suggests that the company has paid down its tax liabilities, resulting in a reduction of cash flow from operating activities. Therefore, changes in this account can significantly influence the reported cash flow for the year.
What are Objectives of tax planning?
the following are the important objectives of Tax planning. 1. Reduction of Tax liability 2. Minimisation of litigation 3. Productive investment 4. healthy growth of economy 5. Economic stability
What is minning of vat?
Mining of VAT, or Value-Added Tax, typically refers to the process of collecting and managing VAT data for compliance and reporting purposes. It involves tracking VAT transactions, ensuring accurate calculations, and preparing necessary documentation for tax authorities. This process is essential for businesses to reclaim input VAT and ensure they are not overpaying or underreporting their tax liabilities. Efficient VAT mining can also help optimize cash flow and improve financial planning.
Does taxes paid go on a balance sheet?
Taxes paid is part of cash book or cash flow statement and tax expense in income statement and tax payable is balance sheet item.
What is the benefit of taxes when calculating depreciation into a cash flow projection?
Depreciation itself does not affect cash flow. After all, depreciation is a noncash entry that reflects the reduction in value of a long-lived asset. It has no direct cash flow effects. However, because depreciation is tax-deductible, it can reduce a company's tax provision. Therefore, to the extent that depreciation reduces taxes, it provides a cash flow benefit. To compute the benefit in any given year, multiply the Modified Accelerated Cost Recovery System (MACRS) depreciation on the asset by the company's marginal tax rate.
