question archive Which of the following circumstances creates a future taxable amount? A
Which of the following circumstances creates a future taxable amount? A
Subject:ManagementPrice:2.87 Bought7
Which of the following circumstances creates a future taxable amount?
A. Service fees collected in advance from customers: taxable when received, recognized for financial reporting when earned.
B. Accrued compensation costs for future payments.
C. Straight-line depreciation for financial reporting and accelerated depreciation for tax reporting.
D. Investment expenses incurred to obtain tax-exempt income (not tax deductible).
Which of the following circumstances creates a future taxable amount?
A. Service fees collected in advance from customers: taxable when received, recognized for financial reporting when earned.
B. Accrued compensation costs for future payments.
C. Straight-line depreciation for financial reporting and accelerated depreciation for tax reporting.
D. Investment expenses incurred to obtain tax-exempt income (not tax deductible).
Purchase A New Answer
Custom new solution created by our subject matter experts
GET A QUOTE
Answer Preview
Answer:
C .
Step-by-Step explanation
Straight-line method of depreciation refers to the method which charges same amount of depreciation evenly to the fixed assets all over its useful life. The straight-line method is calculated by subtracting salvage value with the cost of fixed asset divided by the useful life. It is expressed in the following manner:
Depreciation per annum = (Cost − Residual Value) / Useful Life
Financial reporting refers to the statement that is made in order to disclose all the information related to the financial status of the business or an organization in front of the management, government and the investors that are there in the organization or the business. Financial reporting is done in order to provide information to the management that is useful for making decision.
Hence, Option C is the correct answer.
