A GAAP Financial Statement Includes Footnotes That

question 41

Multiple Choice

A GAAP financial statement includes footnotes that:

• A) Give estimates of the dates on which the deferred tax liability will be paid.
• B) Show the journal entries to determine the deferred income tax expense.
• C) Break down the state-by-state profitability of the entity.
• D) Include a reconciliation of the book effective tax rate with the applicable statutory tax rate.

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Definitions:

Operating Expense

Operating expense includes all necessary expenditures that a business incurs as a result of performing its normal business operations, excluding the cost of goods sold.

Operating Profit

The profit earned from a firm's core business operations, excluding deductions of interest and taxes.

Mark-up

The amount added to the cost price of goods to cover overhead and profit.

Unit Cost

The cost incurred to produce, store, or acquire one unit of a product or service.