Whist Judgement Is Required to Distinguish Between a Reporting Entity

question 63

Multiple Choice

Whist judgement is required to distinguish between a reporting entity and a non-reporting entity, it is expected that a reporting entity will include:
I. government departments
II. small-medium proprietary companies
III. statutory authorities
IV. public companies

• A) I and III only
• B) II, III and IV
• C) I, III and IV
• D) II and IV

Calculate total costs and net income at different production levels.

Apply basic cost accounting principles to service-based scenarios.

Understand the impact of cost structure adjustments on profitability.

Understand the purpose and function of consumer laws.

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Definitions:

Unreimbursed Employee Business Expenses

Expenses employees incur in the course of performing their job that are not reimbursed by the employer.

Itemized Deductions

Expenses allowed by the IRS that can be subtracted from adjusted gross income to reduce taxable income, including mortgage interest, medical expenses, and charitable contributions.

2% Floor

A tax rule that limits the deductibility of certain miscellaneous expenses to only the portion that exceeds 2% of the taxpayer’s adjusted gross income.

Sales Taxes

Taxes levied by governments on the sale of goods and services, which are typically paid by the consumer at the point of purchase.