Most Companies Keep Separate Sets of Accounting Records for fiNancial

question 19

Multiple Choice

Most companies keep separate sets of accounting records for financial reporting and for income tax computations. Which of the following statements is true?

• A) They do it even though this practice is illegal and in violation of international financial reporting standards.
• B) They do it because the Income Tax Act requires companies to keep separate records for tax purposes.
• C) They do it because financial reporting rules and income tax regulations differ in many ways.
• D) They do it to enable a company to do a reconciliation between taxable income and reported profit.

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