A Tax Preparer Can Incur a Penalty If the Client's

question 120

Short Answer

A tax preparer can incur a penalty if the client's return includes a(n)___________________ or ____________________ tax return position that understates the tax liability.

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Definitions:

Unearned Revenues

Money received by a company for goods or services that have yet to be delivered or performed.

Current Assets

Resources that are anticipated to be turned into cash, disposed of, or utilized within a year or throughout the regular business cycle.

Classified Balance Sheet

A balance sheet that groups together similar assets and liabilities, using several classifications and categories, to provide useful information to the users.

Deferred Expenses

Costs that are incurred but not expensed immediately and are carried on the balance sheet as an asset until recognized.