Which of the Following Statements Best Describes Considerations Regarding a Company's

question 167

Multiple Choice

Which of the following statements best describes considerations regarding a company's tax expense that may be made by users of GAAP financial statements?

• A)The breakdown of tax expense between current and deferred may provide useful information regarding the comparison of tax burdens between companies.
• B)An analysis of earnings before interest, taxes, depreciation, and amortization (EBITDA) is often a better approach to comparing operating results of two companies.
• C)One-time effects within a company's effective tax rate should be removed before comparing effective tax rates across companies (or across years for the same company).
• D)All the above observations are correct.

---

Definitions:

Temporal Bone

A bone located at the sides and base of the skull that houses structures of the ear.

Greater Trochanter

A prominent bony protrusion on the proximal (upper) part of the femur (thigh bone) serving as a major site for muscle attachment.

Iliac Crest

The upper curved edge of the ilium, one of the bones forming the pelvis, often used as a landmark for medical procedures.

Ischial Tuberosity

The bony protrusion at the bottom of the pelvis on which one sits.