When Preparing the Financial Statements from a Spreadsheet That Shows

question 37

Multiple Choice

When preparing the financial statements from a spreadsheet that shows the results of a transaction analysis:

• A)a statement of retained earnings is not required.
• B)the balance sheet reports the beginning balance of retained earnings.
• C)assets,liabilities,and stockholders' equity are reported on the balance sheet.
• D)revenues,expenses,and dividends are reported on the income statement.

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Definitions:

Effective Tax Rates

The average percentage at which an individual or corporation is taxed.

Statutory Tax Rates

The tax rate legally imposed on income or profits by the government, which can vary depending on the type of income, entity, or other factors.

Deferred Income Tax Liability

A tax obligation recorded on the balance sheet that refers to taxes that are due in the future due to temporary differences between the financial accounting and tax reporting.

Pre-Tax Book Income

The income of a company before taxes have been deducted, as recorded in the accounting records according to standard accounting practices.