GMS Corp Reported $680,000 in Income Tax Expense for the Year

question 6

Multiple Choice

GMS Corp. reported $680,000 in income tax expense for the year under the accrual method. Its balance sheet reported an overall increase in deferred income tax liability of $40,000 and a decrease in income tax payable of $50,000. How much would GMS report as income tax expense had it used the taxes payable method?

• A)$680,000
• B)$630,000
• C)$720,000
• D)$640,000

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Definitions:

Activity-Based Costing

A costing method that identifies activities in an organization and assigns the cost of each activity to all products and services according to the actual consumption by each.

Profitability

An indicator of a business's ability to generate earnings compared to its expenses and other relevant costs incurred during a specific period of time.

Order Management Process

A sequence of steps designed to effectively take, process, and fulfill orders to customer specifications, ensuring a cohesive flow from receipt to delivery.

Order Management System

A software used to track orders from inception to delivery, streamlining the order processing for businesses.