The discussion of allowable tax benefits has been expanded. For more information see Allowable Tax Benefits in the Instructions for Form W-7 PDF. A Taxpayer Identification Number (TIN) is an identification number used by the Internal Revenue Service (IRS) in the administration of tax laws. It is issued either by the Social Security Administration (SSA) or by the IRS. A Social Security number (SSN) is issued by the SSA whereas all other TINs are issued by the IRS.

To apply for an ITIN, complete IRS Form W-7, IRS Application for Individual Taxpayer Identification

If questions 11 through 17 on Form SS-4 do not apply to the applicant because he has no U.S. tax return filing requirement, such questions should be annotated "N/A". A foreign entity that completes Form SS-4 in the manner described above should be entered into IRS records as not having a filing requirement for any U.S. tax returns. Failure to respond to the IRS letter may result in a procedural assessment of tax by the IRS against the foreign entity.

Eligibility Requirements and

Metro Corporation collected a total of $5,000 on account from clients who owned money for services previously billed. To learn more about the income statement, see Income Statement Outline. The 500 year-old accounting system where every transaction is recorded into at least two accounts. This transaction brings cash into the business and also creates a new liability called bank loan.

What is the difference between an asset and a liability?

Long-term liabilities are any debts due more than one year in the future, while short-term liabilities are due within the year. A

An asset is a resource that is owned or controlled by the company to be used for future benefits. Some assets are tangible like cash while others are theoretical or intangible like goodwill or copyrights. In other words, all assets initially come from liabilities and owners' contributions. Drawings are amounts taken out of the business by the business owner.

Final Thoughts On Calculating The Equation

To further illustrate the analysis of transactions and their effects on the basic accounting equation, we will analyze the activities of Metro Courier, Inc., a fictitious corporation. Refer