Which Indicates the Correct Order for Completing Your Tax Returns

question 52

Multiple Choice

Which indicates the correct order for completing your tax returns?

• A) claim exemptions, calculate total tax, subtract deductions, subtract adjustments, determine gross income
• B) subtract deductions, calculate total tax, claim exemptions, determine gross income, subtract adjustments
• C) determine gross income, subtract adjustments, subtract deductions, claim exemptions, calculate total tax
• D) none of the above

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Definitions:

Interest Expense

The expenditure related to borrowing funds that an entity faces over a specific duration.

Discount on Bonds Payable

The difference between the face value and the selling price when bonds are sold for less than their face value.

Long-Term Liabilities

Financial obligations of a business that are due more than one year in the future, such as bonds payable, long-term lease obligations, and pension liabilities.

Times Interest Earned Ratio

A financial metric measuring a company's ability to meet its debt obligations by comparing its income before interest and taxes to its interest expenses.