Which Accurately Describes the Purpose of the Taxes Payable Method

question 66

Multiple Choice

Which accurately describes the purpose of the taxes payable method?

• A)It represents the amount of income recognized for accounting purposes.
• B)It represents the amount of income recognized for tax purposes.
• C)It calculates tax expense based on the accounting income before tax.
• D)It calculates tax expense based on the amount payable to tax authorities.

---

Definitions:

GDP Deflator

A measure of the level of prices of all new, domestically produced, final goods and services in an economy, used to deflate or adjust the nominal GDP to real GDP.

Intermediate Good

A product used as an input in the production of a final good or service.

GDP

Gross Domestic Product, the total value of all goods and services produced within a country's borders in a specific time period.

Real GDP

Gross Domestic Product adjusted for inflation, which measures the value of goods and services produced by a country in a year in real terms.