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Which of the following is not a common difference between net business income on the books (following GAAP) and net business income on a tax return (following the Internal Revenue Code) for a typical business? O Business Meals Expense O Depreciation Expense Bad Debt Expense O Advertising Expense

Which of the following is not a common difference between net business income on the books (following GAAP) and net business income on a tax return (following the Internal Revenue Code) for a typical business? O Business Meals Expense O Depreciation Expense Bad Debt Expense O Advertising Expense

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Which of the following statements is false? O Some business owners may use a hybrid method (some accounts on cash method and some accounts on accrual method) to measure business income. For tax planning purposes, business owners have incentives to choose accounting methods that accelerate income recognition and defer deductions. O The two most common accounting methods for measuring business income on a tax return are the cash method and the accrual method. The overriding requirement for accounting methods to measure business income on a tax return is that the method must clearly reflect income and be applied consistently.
Transcribed Image Text:Which of the following statements is false? O Some business owners may use a hybrid method (some accounts on cash method and some accounts on accrual method) to measure business income. For tax planning purposes, business owners have incentives to choose accounting methods that accelerate income recognition and defer deductions. O The two most common accounting methods for measuring business income on a tax return are the cash method and the accrual method. The overriding requirement for accounting methods to measure business income on a tax return is that the method must clearly reflect income and be applied consistently.
Which of the following is not a common difference between net business income on the books (following GAAP) and net business income on a tax return (following the Internal Revenue Code) for a typical business? Business Meals Expense O Depreciation Expense Bad Debt Expense O Advertising Expense
Transcribed Image Text:Which of the following is not a common difference between net business income on the books (following GAAP) and net business income on a tax return (following the Internal Revenue Code) for a typical business? Business Meals Expense O Depreciation Expense Bad Debt Expense O Advertising Expense
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