A corporation may report net income for federal income tax purposes at an amount different from the amount reported for financial accounting purposes.

Question

Quizplus · Accepted Answer

This is true as corporations may use different methods and rules for calculating taxable income and financial accounting income. For example, for tax purposes, a corporation may be allowed to deduct certain expenses that are not deductible for financial accounting purposes. Additionally, the timing of recognizing revenue and expenses may differ between the two methods.

A Corporation May Report Net Income for Federal Income Tax