A Corporation

question 80

Multiple Choice

A corporation

• A) must use different depreciation methods for tax and financial reporting purposes.
• B) may use different depreciation methods for tax and financial reporting purposes.
• C) must use the same depreciation method for tax and financial reporting purposes.
• D) must use different (from for tax purposes), but strictly mandated, depreciation methods for financial reporting purposes.

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Definitions:

Corporate Form of Organization

A legal structure for a business recognized as a separate legal entity, with owners (shareholders) who have limited liability.

Government Regulation

The laws, rules, and guidelines established by governmental bodies intended to control or manage specific activities or industries.

Legal Entity

An organization that has legal rights and obligations, including the ability to enter into contracts, sue, and be sued; can be a corporation, partnership, individual, or any other formal entity.

Authorized Shares

The maximum number of shares that a corporation is legally permitted to issue, as specified in its articles of incorporation.