Many Non-Accountants Are Confused When They Hear That Company Has

question 80

Essay

Many non-accountants are confused when they hear that company has a tax refund of $1,200,but reported an income tax expense of $7,400.These individuals believe such a situation results from companies keeping two sets of books.They further believe that keeping two sets of books is illegal and should be prohibited.
Required:
1.Do companies keep two sets of books and,if they do,is this illegal?
2.How can a company have a tax refund when it also reports an income tax expense?

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Definitions:

Advent of Writing

The historical period when human societies began to develop and use writing systems to record information, events, and ideation.

Silk Road

An ancient network of trade routes that connected the East and West, facilitating not only commerce but also the exchange of culture, religion, and technology.

Asia to Europe

This term refers to the diverse cultural, economic, historical, and geopolitical interactions and connections between countries in Asia and Europe.

Great Pyramid

The largest of the three pyramids at Giza, Egypt, built as a tomb for Pharaoh Khufu (Cheops) around 2580-2560 B.C.