Which of the following statements is true of reserves? Choose the correct answer. A. Only reserves...
Which of the following statements is true of reserves?
Choose the correct answer.
A.
Only reserves that are specifically identified in the Income Tax Act can be deducted in computing net business income for tax purposes.
B.
Any reserve that can be deducted from GAAP income can also be deducted when computing business income for tax purposes.
C.
Reserves apply only to GAAP accounting and are not deductible in computing business income for tax purposes.
D.
Reserves apply only to calculating business income for tax purposes and are not deductible in computing GAAP income.
Homework Answers
Option A is true for reserves.The reserves which are specifically identified in Income Tax only those reserves will be allowed as deduction while calculating net business income for income tax purposes.
Option B, C & D are incorrect because of following reasons:
Option B- It is not mandatory that reserve which is allowed in GAAP will be allowed in Income Tax. Only some specified reserves are allowed as deduction in Income Tax. While there are other reserves which are allowed in GAAP but not in Income Tax
Option C- Specified reserves are allowed as deduction in Income Tax. It is not the case, that all the reserves are not allowed in Income Tax
Option D- Reserves are allowed under GAAP. Specified reserves are allowed as deduction in Income Tax also. So statement that reserves are not allowed in GAAP is a false statement.
Add Answer to:
Which of the following statements is true of reserves?
Choose the correct answer.
A.
Only reserves...
According to the Income Tax Act, which of the following items is the starting point for...
According to the Income Tax Act, which of the following items is the starting point for computing net business income for tax purposes? Choose the correct answer. A. Sales revenue less cost of goods sold B. Net income for a business computed using generally accepted accounting principles (GAAP) C. Net income for a business as reported on the previous year's income tax return D. Gross sales revenues
Choose the correct answer- 1)Which of the following are deferred tax assets (select all that apply)?...
Choose the correct answer- 1)Which of the following are deferred tax assets (select all that apply)? A.Inventory reserves for obsolescence B. Accelerated depreciation methods for tax purposes C. Installment sales from real estate transaction D. Non-deductible accrued warranty loss provisions 2)Service costs will: A. Increase the PBO and increase the pension expense B.Increase pension expense and decrease accumulated other comprehensive income C.Increase the pension expense and reduce plan assets D.Increase the PBO and reduce plan assets 3)Calculating a PBO is...
Which of the following statements is not correct on investment interest? Choose one answer. a. Form...
Which of the following statements is not correct on investment interest? Choose one answer. a. Form 4952 is used to determine the deductible investment interest b. Investment income includes interest, dividends, royalties, and annuities. c. Investment income is generally derived from a non-passive activity. d. Investment interest is limited to net investment income
Is this the correct answer? Thanks Which of the following statements is CORRECT? Select one: O...
Is this the correct answer?
Thanks
Which of the following statements is CORRECT? Select one: O a. Because companies are required to follow GAAP, two firms in exactly the same operating situation will have exactly the same financial statement b. The emphasis in finance is on the determination of accounting income since the value of a firm is determined by the net income generated. O c. Even if a firm follows generally accepted accounting principles (GAAP), its reported net income...
Which of the following statements is true of an opportunity cost? (Only one answer.) A) An...
Which of the following statements is true of an opportunity cost? (Only one answer.) A) An opportunity cost is a direct cost that a firm pays in order to pursue a new business opportunity. B) An opportunity cost is the potential benefit of an alternative that a decision maker forgoes when he or she chooses a different alternative. C) Opportunity costs appear in a firm’s accounting records. D) Opportunity costs only apply to business decisions.
Which of the following statements is correct in connection with the investigation of a business? a.If...
Which of the following statements is correct in connection with the investigation of a business? a.If the taxpayer is not already engaged in the trade or business, the expenses incurred are deductible if the project is abandoned. b.That business must be related to the taxpayer's present business for any expense ever to be deductible. c.Regardless of whether the taxpayer is already engaged in the trade or business, the expenses must be capitalized and amortized. d.Expenses may be deducted immediately by...
Which of the following statements is true of accrual basis accounting?
Which of the following statements is true of accrual basis accounting? Accrual basis accounting records revenue only when cash is received. Accrual basis accounting always results in greater net income than cash basis accounting. Accrual basis accounting records expenses only when cash has been paid for them. Accrual basis accounting is required by Generally Accepted Accounting Principles (GAAP).
15) Which of the following statements is correct in connection with the investigation of a business?...
15) Which of the following statements is correct in connection with the investigation of a business? a. If the taxpayer is not already engaged in the trade or business, the expenses incurred are deductible if the project is abandoned. b. Expenses may be deducted immediately by a taxpayer engaged in a similar trade or business regardless of whether the business being investigated is acquired. c. That business must be related to the taxpayer's present business for any expense ever to...
Which of the following items would be added to a corporation's GAAP income to determine Net...
Which of the following items would be added to a corporation's GAAP income to determine Net Income for Tax Purposes? Choose the correct answer. A. a federal income tax refund B. terminal losses C. CCA that exceeds GAAP amortization D. 50% of business meals and entertainment
(1 pts) 15) Which of the following statements is correct in connection with the investigation of...
(1 pts) 15) Which of the following statements is correct in connection with the investigation of a business? a. If the taxpayer is not already engaged in the trade or business, the expenses incurred are deductible if the project is abandoned, b. Expenses may be deducted immediately by a taxpayer engaged in a similar trade or business regardless of whether the business being investigated is acquired. c. That business must be related to the taxpayer's present business for any expense...
Is this the correct answer?
Thanks
Which of the following statements is CORRECT? Select one: O a. Because companies are required to follow GAAP, two firms in exactly the same operating situation will have exactly the same financial statement b. The emphasis in finance is on the determination of accounting income since the value of a firm is determined by the net income generated. O c. Even if a firm follows generally accepted accounting principles (GAAP), its reported net income...
15) Which of the following statements is correct in connection with the investigation of a business? a. If the taxpayer is not already engaged in the trade or business, the expenses incurred are deductible if the project is abandoned. b. Expenses may be deducted immediately by a taxpayer engaged in a similar trade or business regardless of whether the business being investigated is acquired. c. That business must be related to the taxpayer's present business for any expense ever to...
(1 pts) 15) Which of the following statements is correct in connection with the investigation of a business? a. If the taxpayer is not already engaged in the trade or business, the expenses incurred are deductible if the project is abandoned, b. Expenses may be deducted immediately by a taxpayer engaged in a similar trade or business regardless of whether the business being investigated is acquired. c. That business must be related to the taxpayer's present business for any expense...
Most questions answered within 3 hours.
-
Design and implement your own linked list class to hold a sorted
list of integers in...
asked 25 seconds ago -
a car starts from rest at a stop sign. It accelerates
at 4.4m/s² for 7.5s, coasts...
asked 28 seconds ago -
1. Sketch the expected Mass Spectrum of Pentane (C5H12)
2. Draw the most stable Newman projection...
asked 4 minutes ago -
There are changes in the dynamics of a relationship of a family
when family takes on...
asked 7 minutes ago -
Prove that the following is a valid cumulative distribution
function
F(x) = x/(1+x) for a>=0
0...
asked 6 minutes ago -
Caculate the PH THANK YOU!
[OH−] = 1.9×10−7 M
[OH−] = 1.6×10−8 M
[OH−] = 7.2×10−11...
asked 18 minutes ago -
Suppose you drive an old truck with a 32 gallon gas tank that
gets 16 miles/gallon....
asked 20 minutes ago -
What can be the anticipated results of curing diabetes with stem
cells?
asked 16 minutes ago -
As
an analyst you believe that Acme Company will pay a dividend of $3
per share...
asked 24 minutes ago -
Claim: At most 81% of adults do not have hypertension. When 869
randomly selected adults were...
asked 41 minutes ago -
Assume a class has 19 members.
a. In how many ways can a president, a vice...
asked 39 minutes ago -
What could be a possible reason that protozoan infections are
increasing in the United States
asked 37 minutes ago