The Adjusting Entry to Recognize Income Taxes Due on a Profit

question 46

Multiple Choice

The adjusting entry to recognize income taxes due on a profit of $100,000 and a tax rate of 40% is:

• A) A Above.
• B) B Above.
• C) C Above.
• D) D Above.

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Definitions:

Negligence

The failure to exercise the care that a reasonably prudent person would exercise in similar circumstances, leading to unintended harm or damage.

Proximately Caused

Refers to an event sufficiently related to a legally recognizable injury to be held as the cause of that injury.

Horizontal Privity

A legal term referring to the relationship between parties with coordinating interests in a property, often in lease agreements.

Vertical Privity

A legal concept relating to the chain of ownership or rights that exist in contracts, specifically in property law and warranties, where obligations are passed down.