A. For some assets, straight-line depreciation is used for tax purposes while double-declining balance method is used for financial reporting purposes. B. Warranty expenses are accrued when the sale is made, but cannot be deducted until the work is actually C. The company uses the percentage of completion method to record revenue on long-term contracts for financial reporting purposes, but the completed contract method is used for tax purposes.

A. For some assets, straight-line depreciation is used for tax purposes while double-declining balance method is used for financial reporting purposes. B. Warranty expenses are accrued when the sale is made, but cannot be deducted until the work is actually C. The company uses the percentage of completion method to record revenue on long-term contracts for financial reporting purposes, but the completed contract method is used for tax purposes.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter18: Accounting For Income Taxes

Section: Chapter Questions

Problem 1P: Definitions The FASB has defined several terms in regard to accounting for income taxes. Below are...

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Why is depreciation added to Net CAPEX? A To adjust CAPEX for taxable income B To isolate changes due to buying or selling of CAPEX с To reflect the economic value of the fixed assets