A Broadcasting Company Failed to Make a Year-End Accrual of $400,000

question 79

Multiple Choice

A broadcasting company failed to make a year-end accrual of $400,000 for fines due to a violation of FCC rules. Its tax rate is 30%. As a result of this error, net income was:

• A)Unaffected.
• B)Overstated by $400,000.
• C)Overstated by $280,000.
• D)Overstated by $120,000.$400,000 (1 0%) = $400,000 Fines paid for violations of the law are not tax deductible.

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Definitions:

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The hippocampus is a major component of the brain involved in memory formation, organization, and storage.

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