a. For reporting purposes, management prefers higher profit; for tax purposes, lower taxable income is desired. To meet these goals, firms often use different methods of depreciation for tax and reporting purposes. Which depreciation method is best for reporting and which for tax purposes in the short run? Why?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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a. For reporting purposes, management prefers higher
profit; for tax purposes, lower taxable income is desired.
To meet these goals, firms often use different methods
of depreciation for tax and reporting purposes. Which
depreciation method is best for reporting and which for
tax purposes in the short run? Why?
Transcribed Image Text:a. For reporting purposes, management prefers higher profit; for tax purposes, lower taxable income is desired. To meet these goals, firms often use different methods of depreciation for tax and reporting purposes. Which depreciation method is best for reporting and which for tax purposes in the short run? Why?
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