Which of the Following Items Is Subtracted from Book Income

question 78

Multiple Choice

Which of the following items is subtracted from book income to arrive at taxable income?

• A)Federal income tax expense on the income statement.
• B)Book depreciation that is in excess of tax depreciation.
• C)Life insurance proceeds.
• D)Final month rent collected at lease signing.

---

Definitions:

Manufacturing Overhead

All indirect factory-related costs incurred while producing a product, excluding direct materials and direct labor.

Work in Process

Inventory that includes the materials, labor, and overhead costs for products that are in the production process but not yet completed.

Journal Entries

Records in accounting that document financial transactions in the books of accounts.

Raw Materials

Raw materials are the basic substances or components used in the manufacturing process to produce finished goods.