Which of the Following Regarding the State Tax Base Is

question 21

Multiple Choice

Which of the following regarding the state tax base is incorrect?

• A)It is computed by making adjustments to federal taxable income.
• B)It is divided into business and nonbusiness income.
• C)It is a necessary step in the state income tax process.
• D)It applies only to interstate businesses.

---

Definitions:

Depreciation Expense

An accounting method allocating the cost of a tangible asset over its useful life.

Plant Assets

Durable physical assets employed in creating goods and services, including equipment, buildings, and machinery.

Double-Declining-Balance

A method of accelerated depreciation which doubles the rate at which an asset's book value depreciates compared to straight-line depreciation.

Salvage Value

The estimation of an asset's value at the end of its period of utility.