GIALOGO, JESSIE LYN
1. Briefly explain payroll taxes.
- Under our law, the entity as an employer is required to withhold from the salaries of each
employee the following:
a. Income tax payable
b. Employee’s contribution to the Social Security System or SSS
c. Employee’s contribution for Phil health
d. Employee’s contribution to the Pag-ibig fund.
2. What are the payroll taxes in the Philippines?
Additional pay can refer to additional income because of holiday pay or overtime and night shift
differential rates. Deductions include mandatory government contributions and salary deductions
due to attendance or internal policies.
3. Generally, what is the classification of payroll taxes payable?
- The only payroll taxes that will appear on the income statement are the ones that the employers
must pay: the employers' matching portion of the Social Security and Medicare taxes (FICA) and
the federal and state unemployment taxes. (The payroll taxes withheld from employees' wages
and salaries are not company expenses.) Employer-paid fringe benefit costs other than payroll
taxes (employers' share of health insurance, holiday and vacation pay, retirement contributions,
etc.) will also appear on the income statement—however, we will focus on the payroll taxes.
4. Explain briefly Valued Added Taxes.
A value-added tax (VAT) is a consumption tax placed on a product whenever value is added at
each stage of the supply chain, from production to the point of sale. The amount of VAT that the
user pays is on the cost of the product, less any of the costs of materials used in the product that
have already been taxed.
5. Explain input VAT and output VAT.
Output VAT is the value added tax you calculate and charge on your own sales of goods and
services if you are registered in the VAT Register. Output VAT must be calculated on sales both
to other businesses and to ordinary consumers. VAT on sales between businesses must be
specified in a sales document.
Output VAT must also be calculated when you withdraw goods or services for private use from a
registered business. If goods are withdrawn for use that is not liable to VAT under the VAT Act,
VAT on withdrawals must be calculated unless the goods in question are capital goods that fall
under the scope of the adjustment provisions for input VAT.
Input VAT is the value added tax added to the price when you purchase goods or services liable
to VAT. If the buyer is registered in the VAT Register, the buyer can deduct the amount of VAT
paid from his/her settlement with the tax authorities.
The other way to remember it is that when you put a Purchase invoice INto your system (as in
someone else printed it) it's INput VAT. When you send an invoice OUT to a customer
it's OUTput VAT.
6. Explain gift certificates payable.
Many megamalls, department stores and supermarkets sell gift certificates which are redeemable
in merchandise.
When the gift certificates are sold, the amount received is initially recognized as unearned
revenue or specifically “gift certificates payable”.
7. What are refundable deposits?
- Refundable deposits consist of cash property received from customers but which are refundable
after compliance with certain conditions. The best example of a refundable deposit is the
customer deposit required returnable containers like bottles, drums, tanks and barrels.
8. What are the four variations in the computation of bonus?
1. Bonus is expressed as a certain percent of income before bonus and before tax.
2. Bonus is expressed as a certain percent of income after bonus and after tax.
3. Bonus is expressed as a certain percent of income after bonus and after tax.
4. Bonus is expressed as a certain percent of income tax but before bonus.
9. What is a deferred revenue?
- Deferred revenue or unearned revenue is income already received but not yet earned. Deferred
revenue may be realizable within one year or in more than one year from the end of reporting
period.
10. Is a deferred revenue current or noncurrent?
- If the deferred revenue is realizable within one year, it is classified as current liability. If the
deferred revenue is realizable in more than one year, it is classified a noncurrent liability.