Depreciation and Amortization Affect Both Net Income Reported in the Financial

question 98

Multiple Choice

Depreciation and amortization affect both net income reported in the financial statements and taxable income on tax returns. Which of the following is /are true?

• A)Taxing authorities in most jurisdictions specify allowable depreciation methods for tax reporting.
• B)When permitted to do so by the taxing authority, firms often use different depreciation methods for financial and tax reporting.
• C)The difference between depreciation expense in the financial statements and the depreciation deduction on the tax return leads to an issue in accounting for income taxes.
• D)all of the above
• E)none of the above

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Definitions:

Past Memory

Recollections and information from previous experiences stored in the brain.

Perception

The process by which individuals organize and interpret their sensory impressions to give meaning to their environment.

Sensation

The process by which sensory receptors and nervous system receive and represent stimulus energies from our environment.

Continuous Process

An ongoing operation that runs 24/7 without interruption or with minimal stops.