The Statutory Tax Rate Differs from a Firm's Average Tax

question 79

Multiple Choice

The statutory tax rate differs from a firm's average tax rate due to which of the following reasons?

• A) The statutory tax rate is a marginal tax rate.
• B) Some expenses are included in book income but do not enter into taxable income.
• C) The average tax rate is for a period of three years.
• D) The statutory tax rate does not affect GAAP measures of revenues and expenses.

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Definitions:

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