Which of the Following Would Be an Appropriate Approach to Detecting

question 13

Multiple Choice

Which of the following would be an appropriate approach to detecting questionable accounting treatment?

• A) Compare the amount of tax a company pays with their reported profit figures
• B) Compare the company's asset with their liabilities
• C) Compare the company's dividend yield with their P/E ratio
• D) Compare the company's share price with their reported profit

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Definitions:

Itemized Deductions

Specific expenses that taxpayers can claim to reduce their taxable income, as opposed to taking the standard deduction.

Charitable Contributions

Donations or gifts given by individuals or organizations to non-profit organizations, which can often be deducted from taxes.

AGI Limitation

Restrictions or phase-outs on certain tax deductions, credits, or exemptions based on the taxpayer's Adjusted Gross Income (AGI).

Churches

Religious organizations that may enjoy certain tax exemptions and benefits under IRS guidelines.