Which Accurately Describes the Purpose of the Taxes Payable Method

question 66

Multiple Choice

Which accurately describes the purpose of the taxes payable method?

• A)It represents the amount of income recognized for accounting purposes.
• B)It represents the amount of income recognized for tax purposes.
• C)It calculates tax expense based on the accounting income before tax.
• D)It calculates tax expense based on the amount payable to tax authorities.

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Definitions:

Cyclical

Referring to fluctuations in economic activity that occur in cycles, often related to changes in business conditions.

Defense Contractor

A business organization that provides products or services to a military or national security department of a government.

Recession

A temporary economic slump, associated with a drop in business and manufacturing activities, commonly distinguished by a successive decline in GDP across two quarters.

Cyclical Unemployment

Cyclical unemployment is the component of overall unemployment that results from economic recessions or expansions, influenced by the business cycle.