Indicate whether the following statements are true or false. If the statementis false, explain why.d. The Tax Code encourages companies to pay a large percentage of theirnet income in the form of dividends.
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Indicate whether the following statements are true or false. If the statement
is false, explain why.
d. The Tax Code encourages companies to pay a large percentage of their
net income in the form of dividends.
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- Differentiate the tax effects of financing a company with stocks and debts. Your answer should include a numerical illustration for the tax effects on retained earningsTaxes affect many financial decisions. Explain how (a)interest and dividend payments are treated for tax purposes, from both a company’s and an investor’s perspective, and (b) how dividends and capital gainsare treated for tax purposes by individuals. In youranswers, explain how these tax treatments influencecorporations’ and investors’ behaviorName some reasons why the taxable income of a corporation is likely not to be the same as its financial statement net income. a Depreciation expense on the tax return is typically greater than depreciation expense for financial statements. b Accounts payable are usually different. c Net assets are usually larger on the tax return. d ales amounts differ because of Internet sales.
- The assumption made for the tax effect method of accounting for a company’s income tax is: Select one: A. an accounting balance sheet and a tax balance sheet are the same. B. income tax expense is equal to income tax payable. C. income tax expense is not equal to current tax liability. D. a tax balance sheet is prepared according to accounting standards.Which of the following statements is true? A.) A company must use FIFO for both tax reporting and financial statement reporting. B.) A company may use FIFO to valuate inventory and LIFO for financial statement reporting purposes. C.) LIFO must be used for financial reporting if it is used for tax purposes. D.) Application of LIFO for financial reporting purposes must follow the tax laws applicable to LIFO.Corporate taxable income is based on an income statement that is similar to income statements prepared for financial reporting. It has Revenues less expenses equals income. How is the computation for personal taxable income different from this income statement concept? Why do you think these differences exist?
- What do you find interesting, confusing, surprising or difficult to understand about the treatment of tax in your firm’s financial statements? What new insights, if any, have you gained about how companies account for income tax as a result of examining your firm’s tax expense in its accounts?how company's financial statement reflects the potential tax avoidance? For example?Account for corporate income taxes; explain the effects of these taxes onbefore-tax profits and losses.
- There are two basis of accounting: cash basis and accrual basis. Personal finance often focuses on the cash basis, whereas corporate accounting focuses on the accrual basis, as prescribed by U.S. Generally Accepted Accounting Principles (GAAP). Furthermore, tax filers focus on the modified accrual basis. If you were about to select the basis of accounting for your organization, which basis would you select, and why?38. Which of the following statements is true?a. LIFO must be used for financial reporting if it is used for tax purposes.b. Application of LIFO for financial reporting purposes must follow the tax laws applicable to LIFO.c. A company may use FIFO to valuate inventory and LIFO for financial statement reporting purposes.d. A company must use FIFO for both tax reporting and financial statement reporting.Tax accounting is a service offered by public accounting firms that involves both tax planning and which of the following? Multiple Choice A.)tax compliance B.)tax avoidance C.)tax elimination D.)tax payment. Please explain incorrect and correct option without plagiarism