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:

Competitive Inhibitors

Substances that bind to the active site of an enzyme, competing with the substrate and thus inhibiting enzyme activity.

Chemical Energy

The potential of a chemical substance to undergo a transformation through a chemical reaction, resulting in the release of energy.

Kinetic Energy

The energy that a body possesses due to its motion, dependent on the mass of the body and the square of its velocity.

Allosteric Site

A site on an enzyme other than the active site, to which a specific substance binds, thereby changing the shape and activity of the enzyme. Compare with active site.