According to Your Textbook, Business Managers Prefer To

question 93

Multiple Choice

According to your textbook, business managers prefer to:

• A) Report as much income as possible for book and tax purposes.
• B) Report as much income as possible for book purposes and as little income as possible for tax purposes.
• C) Report as little income as possible for book and tax purposes.
• D) Report the same amount of income for book and tax purposes.

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Definitions:

Trading Securities

Financial instruments that are purchased by a company not for long-term investment but rather for the purpose of earning a return through short-term price fluctuations.

Fair Value

An estimate of the price at which an asset or liability would be traded in a fair transaction between willing parties.

Financial Statements

Descriptions giving insight into a business's financial situation, covering the balance sheet, income statement, and cash flow statement.

Trading Investments

Securities bought and held primarily for selling them in the near term to generate income on short-term price differences.