Differences between business income for income tax purposes and business income for accounting purposes can result in reconciliation adjustments that can be either permanent or temporary.Select one:TrueFalse
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- Which statement is incorrect? A. The FUNCTIONAL Income Statement classifies expenses into cost of sales, selling expenses and general administrative expenses, among others. B. Income encompasses both revenues and gains. Revenues arise in the ordinary course of business activities while gains are not. C. Expenses encompasses both expenses and losses. Losses usually comprise the majority amount of deductible expenses to arrive at taxable income. D. The statement of comprehensive income encompasses all income and expenses, whether they are recognized in profit or loss determination or recognized directly in equity. E. none of the aboveWhich statement is incorrect? *A.the FUNCTIONAL Income Statement classifies expenses into cost of sales, selling expenses and general administrative expenses, among others .b.Income encompasses both revenues and gains. Revenues arise in the ordinary course of business activities while gains are not. c.Expenses encompasses both expenses and losses. Losses usually comprise the majority amount of deductible expenses to arrive at taxable income. d.The statement of comprehensive income encompasses all income and expenses, whether they are recognized in profit or loss determination or recognized directly in equity. e.none of the aboveWhat are the differences between negative goodwill and positive goodwill, and how are they treated in accounting?
- Which option is the correct definition of tax base? Select one: a. Tax base is the amount the asset or liability is recorded at in the accounting records. b. Tax base is a comparing the balance sheet derived using accounting rules with balance sheet that would be derived from taxation rules c. Tax base is the recognition of assets and liabilities in the balance sheet based on the differences between accounting and tax values of assets and liabilities. d. Tax base is defined as the amount that is attributed to an asset or liability for tax purposes.Which statement is incorrect? * The FUNCTIONAL Income Statement classifies expenses into cost of sales, selling expenses and general administrative expenses, among others. Income encompasses both revenues and gains. Revenues arise in the ordinary course of business activities while gains are not. Expenses encompasses both expenses and losses. Losses usually comprise the majority amount of deductible expenses to arrive at taxable income. The statement of comprehensive income encompasses all income and expenses, whether they are recognized in profit or loss determination or recognized directly in equity. none of the aboveWhich statement is incorrect? * The FUNCTIONAL Income Statement classifies expenses into cost of sales, selling expenses and general administrative expenses, among others. Income encompasses both revenues and gains. Revenues arise in the ordinary course of business activities while gains are not. Expenses encompasses both expenses and losses. Losses usually comprise the majority amount of deductible expenses to arrive at taxable income. The statement of comprehensive income encompasses all income and expenses, whether they are recognized in profit or loss determination or recognized directly in equity.
- Which of the following statements about accounting income and economic income is (are) correct? I. Accounting income ignores many unrealized gains/losses of assets and liabilities, but economic income fully recognizes unrealized gains/losses. II. Accounting income does not consider all the costs (e.g., opportunity costs), whereas economic income account for all types of costs. III. Income and capital gains/losses are treated different in the calculation of accounting income, while they are treated the same in the calculation of economic income. Group of answer choices a.I and II b. I and III c. II and III d. I, II and IIIDistinguish between termporary differences and permanent differences in Accounting? Provide an example of each.Discuss to what extent deferred tax accounting can be used for income smoothing.
- Which is not a scheme in taxing income?* O a. Ordinary gain taxation O b. Regular income taxation O c. Capital gains taxation d. Final income taxation O O O OExplain the major objectives and limitations of fundamental analysis and differentiate between ordinary and extra ordinary income with example.Classify the following items that may cause discrepancy between accounting profit and taxable income, into the following types of differences. Also, provide an explenation why that is their classification. A. Non-deductible expenses B. Non-taxable revenues C. Deductible temporary difference D. Taxable temporary difference Collections of rental in excess of rent revenue reported during the period. Dividends received by a domestic corporation from a domestic corporation. Increase in fair value of equity investments measured at fair value through profit or loss. Uncollectible accounts expense in excess of accounts written off during the period. Tax depreciation in excess of depreciation for accounting purposes.
