A corporation may choose to use different depreciation methods for tax and financial reporting purposes, as long as the methods are allowed under accounting principles and tax laws. However, it is important for the corporation to disclose the differences and the reasons behind them in its financial statements.

Solved

A Corporation

Question 82

Multiple Choice

A corporation

A) must use different depreciation methods for tax and financial reporting purposes.
B) may use different depreciation methods for tax and financial reporting purposes.
C) must use the same depreciation method for tax and financial reporting purposes.
D) must use different (from for tax purposes) , but strictly mandated, depreciation methods for financial reporting purposes.

Correct Answer: