When does the matching principle require modification in start-up companies? A. During normal operations B. Only after becoming profitable C. When substantial costs precede any revenue generation D. For tax reporting only
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When does the matching principle require modification in start-up companies? A. During normal operations B. Only after becoming profitable C. When substantial costs precede any revenue generation D. For tax reporting only
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- 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 statementsGeneral Account You are about to determine your corporation's taxable income. Which of the following selections does not help to reduce the taxable income for the firm? a. Marketing expenses b. Depreciation expense c. Cost of goods sold d. Dividend expensegeneral accounting problem please solve it
- 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?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…A company has been using the fair-value method to account for its investment. The company now has the ability to significantly influence the investee and the equity method has been deemed appropriate. Which of the following statements is true? Multiple Choice A cumulative effect change in accounting principle must occur. A prospective change in accounting principle must occur. A retrospective change in accounting principle must occur. The investor will not receive future dividends from the investee. Future dividends will continue to be recorded as revenue.
- Which limitation of an income statement occurs when one company uses an accelerated depreciation method while another company uses straight-line depreciation? O Companies omit from the income statement items they cannot measure reliably. O Income measurement involves judgment. O Income numbers are affected by the accounting methods employed. All of these answer choices are correct.Which of the following statements are true? Select one or more: a. MACRS must be used for book purposes if it is used for tax purposes. b. Managers often prefer the straight-line method because it helps to smooth earnings. c. Units of production method is not appropriate for natural resources. d. Double-declining balance recognizes more depreciation expense early in an asset's life. PreviousSave AnswersNextWhich one of the following is a soft benefit? Depreciation tax shield Reduction in the number of items spoiled during processing Enhanced reputation of the company Decreased time to receive and process customers’ payments
- 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.Revenue Recognition: Explain the concept of revenue recognition in accounting. Provide examples of situations where revenue recognition might be challenging, and discuss the importance of adhering to appropriate accounting standards. Depreciation Methods: Compare and contrast the straight-line and declining balance methods of depreciation. Discuss the advantages and disadvantages of each method, and explain how the choice of depreciation method can impact a company's financial statements.What 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
