A Trust Document Does Not Mention the Treatment for Depreciation

question 6

Short Answer

A trust document does not mention the treatment for depreciation. The state has adopted the Uniform Act. The trust document states that depreciation is a charge against corpus. The trust results are the following:
$\begin{array}{ll}\text { Business net profits } & \$ 2,000 \\\text { Rental income } & 1,000 \\\text { Depreciation } & 100 \\\text { Rent expense } & 100\end{array}$ Calculate net accounting income.

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Definitions:

GAAP

Stands for Generally Accepted Accounting Principles, which are a common set of accounting rules and standards used in the United States for financial reporting.

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board (IASB) that is gaining global acceptance.

Deferred Taxes

Taxes applicable to income that has been accrued but not yet paid, due to differences between accounting and tax legislation.

Installment Sales

A method of sale where the buyer makes payments towards the total sale price in installments over time, while the seller recognizes revenue as payments are received.