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.

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Definitions:

Adjusting Entries

Journal entries made at the end of an accounting period to allocate income and expenditure to the appropriate years.

Permanent Accounts

Accounts that carry their balances over into the next accounting period, including assets, liabilities, and equity accounts.

Trial Balance

A financial worksheet that consolidates all ledger balances into equal debit and credit column totals.

Prepaid Items

This term describes expenses paid in advance for goods or services to be received in the future, such as insurance or rent.