Deferred Taxes Are Caused by Using Different Accounting Methods for Tax

question 10

True/False

Deferred taxes are caused by using different accounting methods for tax and financial reporting purposes.

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Definitions:

Cash Dividends

Payments made by a corporation to its shareholder members. It is the share of profits distributed in the form of cash.

Direct Method

A way of preparing cash flow statements where actual cash inflows and outflows from operational activities are listed.

Selling Expenses

Costs incurred directly and indirectly in making sales, including commissions, advertising, and salaries of sales staff.

Administrative Expense

Overhead or general expenses related to the day-to-day running of a business but not directly tied to production.