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Why would a company overstate its expense and understate its net income?
Wiki User
∙ 11y ago
Simply to avoid taxes
Wiki User
∙ 11y ago
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How does a company have income but take in less cash that it spends?
Income is all the money a company takes in (hence the name) expense is all the money a company spends profit is income - expense. just because expense > income doesn't mean there is no income. It means there is no profit.
If a company uses the periodic inventory system what is the impact on net income of including goods in transit fob shipping point in purchases but not ending inventory?
Understate net income
Does rent expense affect net income?
Yes all expenses reduces the net income so does rent expense also reduce the net income of company.
A company's fixed interest expense is 8000 its income before interest expense and income taxes is 32000 Its net income is 9600 The company's times interest earned ratio is?
Formula for times interest earned = earning before interest and tax / interest expense Times interest earned = 32000 / 8000 = 4 times
Is purchases an income or an expense?
it is neither an expense nor an income
What is the difference in percentage of income versus percentage of expense?
Income = expense + savings&investments Income = expense + savings&investments
Is purchase returns an expense or income?
it is neither an expense nor an income
Is interest on fixed deposit an expense or income?
To the depositor, it is an income but to the bank or institution providing the fixed deposit as a product, it is an expense.
Is Loss on Sale of Asset a Equity account or Income Account?
Loss on sale of asset reduces the actual profit of company that's why it is a part of income statement and shown as an expense to business.
Is directors remuneration an expense or an income?
Its an expense
Is director remuneration is income or expense?
Its an expense
Where does interest expense in the income statement?
Interest expense is shown at debit side of income statement because it is an expense for business.
