Monro Inc Uses the Accrual Method of Accounting

question 27

Multiple Choice

Monro Inc. uses the accrual method of accounting. Here is a reconciliation of Monro's allowance for bad debts for the current year. Because of the difference between the GAAP and the tax rules for accounting for bad debts, Monro Inc. has an:

• A) $8,500 permanent excess of book income over taxable income.
• B) $8,500 permanent excess of taxable income over book income.
• C) $8,500 temporary excess of taxable income over book income.
• D) $8,500 temporary excess of book income over taxable income.

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Definitions:

Course Of Action

A plan or strategy intended to accomplish a specific goal.

Investment

Investment involves allocating resources, usually money, with the expectation of generating an income or profit.

Obedience

A form of social influence where an individual acts in response to a direct order from another individual, who is usually an authority figure.

Hideous Crimes

Acts that are particularly shocking due to their gruesome, violent, or morally reprehensible nature.