Which of the Following Statements About the Uniform Division of Income

question 32

Multiple Choice

Which of the following statements about the Uniform Division of Income for Tax Purposes Act (UDITPA) is false?

• A) UDITPA requires all states to use the same method for apportioning income of multistate businesses.
• B) UDITPA recommends an equally-weighted three-factor formula for apportioning income of multistate businesses.
• C) The UDITPA property factor equals the cost of real or tangible personal property located in a state divided by the total cost of such property.
• D) The UDITPA payroll factor equals the compensation paid to employees working in a state divided by total compensation.

---

Definitions:

Permanent Account Balances

The ongoing balances in balance sheet accounts that are carried over from one accounting period to the next.

Temporary Account Balances

Accounts that are closed at the end of each accounting period, including revenues, expenses, and dividends accounts.

Net Income

The net gain a company achieves after all operational costs and taxes are removed from its entire revenue.

Closing Entries

Closing entries are journal entries made at the end of an accounting period to transfer temporary accounts' balances to permanent accounts, thereby preparing the books for the next period.