The Standard Deduction Is Allowed for Regular Income Tax Purposes

question 21

True/False

The standard deduction is allowed for regular income tax purposes but is disallowed for AMT purposes.This results in a positive AMT adjustment.

---

Definitions:

Owner's Capital

The total value of assets contributed by the owner of a business plus the retained earnings.

Owner's Drawings

Withdrawals of a business's cash or other assets by the owner for personal use.

Expense Accounts

Accounts used to record business expenses, which reduce net income in the profit and loss statement.

Income Summary

An account used in the closing process that summarizes revenues and expenses to determine the net income or loss for a period.