Generally Accepted Accounting Principles Are

question 103

Multiple Choice

Generally accepted accounting principles are

• A) income tax regulations of the Internal Revenue Service.
• B) standards that indicate how to report economic events.
• C) theories that are based on physical laws of the universe.
• D) principles that have been proven correct by academic researchers.

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Definitions:

Roth IRA

An individual retirement account allowing for tax-free withdrawals on qualified distributions, funded with after-tax dollars.

Tax-Free Withdraw

Taking money out of a financial account, such as a Roth IRA, without incurring tax liability on the distribution.

Nondeductible Contributions

Contributions to certain retirement accounts that cannot be deducted from current income taxes, but may potentially grow tax-free until withdrawal.

Tax Basis

The value of an asset for tax purposes, used to calculate gain or loss on the sale or other disposition of the asset.