Monro Inc Uses the Accrual Method of Accounting

question 10

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:

Scanned

Describes the process of sequentially examining or reading information from a source, often used in the context of barcodes or digital images.

Data

Information that is processed or stored by a computer.

Manufacturer

A company or entity that produces finished goods from raw materials through the use of equipment and processes.

Word

In computing, a fixed-sized piece of data handled as a unit by the instruction set or the hardware of the processor.