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Why do companies use different depreciation methods for tax reporting and financial reporting?
Answer:Companies make different accounting choices for tax reporting and general financial reporting, because different incentives are in place. A profitable firm will most likely want to minimize income tax. As a result, management will make accounting choices that minimize net income, and as a result, minimize tax payments. Accounting choices that reduce taxable income include for example accelerated depreciation (instead of straight line) and LIFO (as opposed to FIFO).For general purpose financial reporting, management may want to show a more realistic picture of firm profitability (instead of showing the (legally) lowest possible net income number). So, accounting choices that are made for tax purposes are not always repeated for the general financial reporting.
What is the difference between accounting profit and tax profit?
There are different rules that apply to recognition of revenue and expenses between financial reporting and tax reporting. As an example a small business may incur $10,000 for business meals & entertainment which for financial reporting is 100% deductible. However the IRS only allows the small business to deduct 50% or $5,000. This leads to a different bottom line profit under accounting rules vs tax rules.
What is on-line accounting system?
cloud based accounting information system
What is uniform system of accounting?
The uniform system is a way for accounting and financial professionals to report the financial activities of a hotel in a common manner within the same industry. With guidance, many errors or less desirable methods of reporting can be eliminated and accounting becomes more transparent to all parties.
Is Sage Line 50 the best accounting software on the market?
"Sage Peachtree accounting has great reviews and is rated higher than programs like quick books, bookeeper, account edeg, simply accounting and netsuite small business."
To line up the currency symbols and decimal places within a column which number format should you choose?
accounting
What does the term triple bottom line reporting express?
The term expresses the broadening of accountability for business performance beyond the financial bottom line reported in traditional accounting documents.
Why do companies use different depreciation methods for tax reporting and financial reporting?
Answer:Companies make different accounting choices for tax reporting and general financial reporting, because different incentives are in place. A profitable firm will most likely want to minimize income tax. As a result, management will make accounting choices that minimize net income, and as a result, minimize tax payments. Accounting choices that reduce taxable income include for example accelerated depreciation (instead of straight line) and LIFO (as opposed to FIFO).For general purpose financial reporting, management may want to show a more realistic picture of firm profitability (instead of showing the (legally) lowest possible net income number). So, accounting choices that are made for tax purposes are not always repeated for the general financial reporting.
Which line of the SITREP report should contain a list of all operational combat vehicles?
The Army Standard for reporting observations is by utilizing the SALUTE Report format. What does the L stand for?
What is the difference between accounting profit and tax profit?
There are different rules that apply to recognition of revenue and expenses between financial reporting and tax reporting. As an example a small business may incur $10,000 for business meals & entertainment which for financial reporting is 100% deductible. However the IRS only allows the small business to deduct 50% or $5,000. This leads to a different bottom line profit under accounting rules vs tax rules.
What does the triple bottom line consist of?
Triple bottom line reporting consists of identifying three key parts of a business to evaluate it's performance. The three sections are economical/financial, social/ethical, and environmental.
What employees have an interest in triple bottom line reporting?
employees with a desire to work for a company with exemplary performance in all three dimensions
What is on-line accounting system?
cloud based accounting information system
What does triple bottom line reporting consist of?
TBL reporting is a perspective that identifies business performance as affecting three systems that are critical to long-term human survival: economic/financial, social/ethical, and environmental.
Which reports are available in the Purchase Card On-Line System reporting application?
Which reports are available in the Purchase Card On-Line System (PCOLS) reporting application? (Select all that apply)
What formalized and institutionalized triple bottom line reporting?
by the Global Reporting Initiative, which delineates dimensions for measurement and reporting within each of the environmental, social, and economic domains.
What is the difference between a sonnet and William shakespeare sonnet?
A Shakespearean sonnet is a 14-line poem that rhymes in ababcdcdefefgg format. It's divided into three quatraines (4 line segments) and a couplet (two line segment), with the three quatraines introducing the problem or the question and the couplet bringing about the resolution or answer.
