hy do companies choose to accelerate depreciation on their tax return and not on their income statement? a. to avoid paying taxes b. to postpone paying taxes c. to match their GAAP financial statements
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Why do companies choose to accelerate
a. to avoid paying taxes
b. to postpone paying taxes
c. to match their GAAP financial statements
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- Which depreciation method is most common for financial reporting? Which depreciation method is most common for tax reporting? Why do companies choose these methods?A company determines that it is more likely than not that a portion of a deferred tax asset will not be realized. Due to the value of the beginning of the period balance, this determination caused a valuation allowance account to decrease during the current period. This situation will cause Income Tax Expense to decrease. O True O FalseWhat would be a reason a company would want to overstate income? A. to help nudge its stock price higher B. to lower its tax bill C. to show a decrease in overall profits D. none of the above
- Which of the following may not be an effect of VAT on the accounting records of a company? i. The formation of a payable under the current liabilities ii. An addition to the cost of a purchase iii. The formation of a tax asset arising from a sale iv. A receivable from the government arising from a sale v. All of the other choices may be an effect of VAT.What is the impact on A Company financial statements if the company forgets to recognize that previously unearned revenue has been earned?Which of the following is true about expenses on the income statement? Depreciation expense is noncash; taxes are cash; depreciation expense comes before taxes are calculated which is good since this results in less taxes Depreciation expense is noncash; taxes are cash; depreciation expense comes after taxes are calculated which is good since this results in less taxes Depreciation expense is cash; taxes are noncash; depreciation expense comes before taxes are calculated which is good since this results in less taxes Depreciation expense is cash; taxes are noncash; depreciation expense comes after taxes are calculated which is good since this results in less taxes
- A company wishing to increase earnings in the current period may choose to:A . decrease the useful life of depreciable assets.B . lower estimates of uncollectible accounts receivables.C . classify a purchase as an expense rather than a capital expenditure.4. Should the management of a company purposely alter its Depreciation estimates for the sole purpose of reporting higher Net Income (Profits) in its Financial Statements? Explain.Consider the following two statements: 1. If a company uses the LIFO cost flow method for its income tax return, it must also use LIFO for its financial statements. II. If a company uses an accelerated depreciation method (i.e., double-declining balance, MACRS) for its income tax return, it can use the straight-line method for its financial statements. Which of the above statements (is) are true? O I only Il only neither statement is true. both I and II
- Which of the following accounts would not be involved in preparing the income statement? Group of answer choices Tax expense All the accounts would be involved in preparing the income statement. Interest income Accumulated depreciation Depreciation expenseWhich of the following is used when computing for the accounting rate of return (ARR)? a. Income before depreciation but after taxes. b. Income after depreciation and taxes. c. Income before depreciation and taxes d. Income after depreciation but before taxes.A reduction in the statutory tax rate would most likely benefi t the company’s:A . income statement and balance sheet.B . income statement but not the balance sheet.C . balance sheet but not the income statement.