Social Considerations Can Be Used to Justify

question 50

Multiple Choice

Social considerations can be used to justify:

• A) Allowing a federal income tax deduction for state and local sales tax.
• B) Allowing excess capital losses to be carried over to other years.
• C) Allowing accelerated amortization for the cost of installing pollution control facilities.
• D) Allowance of a credit for child care expenses.
• E) None of these.

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Definitions:

Outstanding Common Shares

Refers to the total number of shares of a corporation that are currently owned by all its shareholders, including share blocks held by institutional investors and restricted shares.

Deferred Income Tax

Income tax obligations that a company has accrued but not yet paid, appearing on the balance sheet as a liability.

Amortizable Capital Assets

Long-term assets whose cost is gradually expensed over their useful life, such as buildings and equipment.

Temporary Differences

Differences between the accounting value and tax value of assets and liabilities, resulting in deferred tax assets or liabilities.