When does the matching principle require modification in start-up companies? a) When substantial costs precede any revenue generation b) Only after becoming profitable c) During normal operations d) For tax reporting only
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When does the matching principle require modification in start-up companies?
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- general accounting problem please solve itWhich of the following statements does NOT describe a valid similarity or difference between EBIT and EBITDA? a. EBIT represents core, recurring business profitability before the impact of capital structure and taxes; EBITDA is similar but corresponds to business cash flow from operations rather than profitability.b. EBIT may be more relevant when CapEx is important to the company or when you *want* to reflect the partial impact of CapEx; EBITDA is better when CapEx is less significant or when you *want* to normalize and ignore the impact of CapEx.c. EBIT deducts the full Operating Lease Expense, but EBITDA does not because of the add-back for Depreciation & Amortization.d. Both EBIT and EBITDA pair with Enterprise Value in valuation multiples, but Enterprise Value may be calculated slightly differently depending on the accounting system (U.S. GAAP vs. IFRS).e. Both EBIT and EBITDA should be adjusted for any non-recurring charges that affect Operating Income on the Income…Following IFRS, which statement is false? Group of answer choices The revaluation surplus account is a specific account reported as an unrealized gain in the statement of comprehensive income. If the revaluation initially increases the long-term operating asset's carrying value, the firm records the difference between the carrying value and the fair value (the unrealized gain) in the revaluation surplus account. The revaluation surplus account is a specific account reported in other comprehensive income (OCI) in the statement of comprehensive income. If a long-term operating asset's fair value decreases in subsequent accounting periods, after an earlier write-up, the firm reduces the revaluation surplus if it exists.
- when multiplying companys tax rate with any firms accounting income , the result is always different with income tax expense . why ??A company uses the equity method to account for an investment for financial reporting purposes. This would result in what type of difference and in what type of deferred income tax? Oa. Type of Difference Permanent Ob. Ives of Difference Permanent Oc. Ives of Difference Temporary Od. Type of Difference Temporary Deferred Tax Asset Deferred Tax Liability Deferred Tax Asset Deferred Tax Liabilitya. 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?
- Which of the below are the correct adjustments we make to a company's EBIT to arrive at its FCFF? Select all that apply. Select All That Apply A B D E F Take out taxes Subtract depreciation and amortization Subtract capital expenditures Add back acquisition expenses Subtract changes in net working capital Add back R&D expenses ?explain what a growing balance in the deffered income tax liability is likely to indicate about a company's net income relative to its taxable income. Why might investment professional view this situation positively? negatively?Why 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
- Sub. Cost Account1. Under IFRS companies are required to provide a reconciliation between actual tax expense and the applicable tax rate. The purpose(s) of this reconciliation include I. Making better prediction of future cash flow. II. Predicating future cash flows for operating loss carryforwards. III. Assessing the composition of the net deferred income tax liability. IV. Assessing quality of earnings. Select one: a.I, II, III and IV. b.I, III, and IV only. c.I, II and IV only. d.I and IV only. 2. Under IFRS deferred tax assets are recognized for I. Deductible temporary differences. II. Deductible permanent differences. III. Operating loss carryforwards. IV. Operating loss carrybacks Select one: a.I and III only. b.I and IV only. c.II and III only. d.I, II, and III. 3. In determining whether to adjust a deferred tax asset, a company should Select one: a.pass a recognition threshold, after assuming that it will be audited by taxing authorities. b.take an aggressive approach…Match the correct term with its definition.A. Cost principlei. if uncertainty in a potential financial estimate, a company should err on the side ofcaution and report the most conservative amount B. Full disclosureprinciple ii. also known as the historical cost principle, states that everything the company ownsor controls (assets) must be recorded at their value at the date of acquisition C. Separateentity concept iii. (also referred to as the matching principle) matches expenses with associatedrevenues in the period in which the revenues were generated D. Monetarymeasurementconcept iv. business must report any business activities that could affect what is reported onthe financial statements E. Conservatismv. system of using a monetary unit by which to value the transaction, such as the USdollar F. Revenuerecognitionprinciple vi. period of time in which you performed the service or gave the customer theproduct is the period in which revenue is recognized G. Expenserecognitionprinciple…
