Many non-accountants are confused when they hear that company has a tax refund of $1,200,but reported an income tax expense of $7,400.These individuals believe such a situation results from companies keeping two sets of books.They further believe that keeping two sets of books is illegal and should be prohibited.
Required:
1.Do companies keep two sets of books and,if they do,is this illegal?
2.How can a company have a tax refund when it also reports an income tax expense?

Question

Quizplus · Accepted Answer

The Answer of Many non-accountants are confused when they hear that company has a tax refund of $1,200,but reported an income tax expense of $7,400.These individuals believe such a situation results from companies keeping two sets of books.They further believe that keeping two sets of books is illegal and should be prohibited.
Required:
1.Do companies keep two sets of books and,if they do,is this illegal?
2.How can a company have a tax refund when it also reports an income tax expense?

Many Non-Accountants Are Confused When They Hear That Company Has