The Adjusting Entry to Record the Accrual of Income Tax

question 47

Multiple Choice

The adjusting entry to record the accrual of income tax expense includes a:

• A) debit to income tax payable.
• B) credit to income tax expense.
• C) credit to accounts payable.
• D) credit to income tax payable.

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Definitions:

Break-Even Point

The point at which the amount of goods produced or sold matches the total costs, leading to no profit or loss.

Variable Expenses

Costs that change in proportion to the level of goods or services produced by a business.

Fixed Expenses

Costs that do not change with the level of goods or services a company produces over a short period, such as rent, salaries, and insurance.

Sales Mix

The proportion of different products or services that a company sells, impacting its overall profitability and revenue.