Income tax expense is based on
A) profit from operations.
B) profit before income taxes.
C) retained earnings balance.
D) profit.

Question

Quizplus · Accepted Answer

Income tax expense is calculated based on the profit before income taxes. This is because taxes are applied to the earnings before any tax impacts are considered, not after other deductions or additions that might affect the retained earnings or operational profit specifically.

Income Tax Expense Is Based on