As Long as Actual Tax Expense Does Not Materially Differ

question 30

True/False

As long as actual tax expense does not materially differ from estimated tax expense, a corporation may record the difference in the subsequent year and not violate the matching principle in so doing.

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Definitions:

Scheduled

Planned or arranged for a specific time or sequence of events.

Two-Month Intervals

Time periods that occur or are calculated every two months.

Floating Rate

An interest rate that changes over time with the market or along with another interest rate index.

Interest

The expense incurred from borrowing funds or the income earned by lending funds, typically represented as a percentage of the principal amount.