Assume That Congress Recently Passed a Provision That Will Enable

question 66

Multiple Choice

Assume that Congress recently passed a provision that will enable Barton's Rare Books (BRB) to double its depreciation expense for the upcoming year but will have no effect on its sales revenue or tax rate.Prior to the new provision,BRB's net income after taxes was forecasted to be $4 million.Which of the following best describes the impact of the new provision on BRB's financial statements versus the statements without the provision? Assume that the company uses the same depreciation method for tax and stockholder reporting purposes.

• A) Net fixed assets on the balance sheet will decrease.
• B) The provision will reduce the company's net cash flow.
• C) The provision will increase the company's tax payments.
• D) Net fixed assets on the balance sheet will increase.
• E) The provision will increase the company's net income.

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Definitions:

Education Assistance Act

Legislation designed to provide funding or support for educational programs and institutions, often to ensure broader access to education for all citizens.

Congress

The legislative branch of the United States government, composed of the Senate and the House of Representatives, responsible for making federal laws.

The Feminine Mystique

A landmark book by Betty Friedan published in 1963, challenging the traditional roles of women in society and sparking the second-wave feminism movement.

Women's Movement

A social and political movement advocating for the rights and equality of women in society.