Earl Company Uses the Accrual Method of Accounting

question 65

Multiple Choice

Earl Company uses the accrual method of accounting.Here is a reconciliation of Earl's allowance for bad debts for the current year. Because of the difference between the GAAP rules and the tax rules for accounting for bad debts,Earl Company has a:

• A)$54,600 permanent excess of book income over taxable income.
• B)$54,600 permanent excess of taxable income over book income.
• C)$54,600 temporary excess of taxable income over book income.
• D)$54,600 temporary excess of book income over taxable income.

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Definitions:

Independent Of Adults

The stage or ability of an individual, typically a child or adolescent, to perform tasks, make decisions, and solve problems without reliance on adults.

Intellectual Development

The growth of cognitive abilities and capacities from infancy through adulthood.