AASB 112 Uses What Term to Describe the Method for Accounting

question 51

Multiple Choice

AASB 112 uses what term to describe the method for accounting for taxes that it mandates?

• A) net balances method
• B) financial position method
• C) asset and liability method
• D) balance sheet method

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Definitions:

Income Summary

An account used in the closing process that summarizes the revenues and expenses for a specified accounting period, facilitating the transfer of the net income or loss to owner's equity.

Withdrawals Account

A Withdrawals Account tracks the money or assets taken out of a business by its owner(s) for personal use, affecting the owner's equity balance.

Owner's Capital

The amount of equity belonging to the owner of a business, reflecting investments and accumulated earnings.

Income Summary

An accounting tool used to aggregate all income and expense accounts to determine net income or loss for a period.