Most Companies Keep Separate Sets of Accounting Records for Financial

question 60

Multiple Choice

Most companies keep separate sets of accounting records for financial reporting and for income tax computations. Which of the following statements is true?

• A) They do it because the Income Tax Act requires companies to keep separate records for tax purposes.
• B) They do it even though this practice is illegal and in violation of international financial reporting standards.
• C) They do it to enable a company to do a reconciliation between taxable income and reported profit.
• D) They do it because financial reporting rules and ITA regulations differ in many ways.

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Definitions:

Potential Market

The entire market universe that could potentially buy a product or service, considering all possible customers who fall within a segment.

Prototype

An early sample, model, or release of a product built to test a concept or process, serving as a thing to be replicated or learned from.