If a company decides to use income tax expense as a factor in analyses, a method it could use to compute the effects is ____.
A) rules based on Generally Accepted Accounting Principles (GAAP)
B) tax-basis rules
C) either a or b
D) neither a nor b

Question

Quizplus · Accepted Answer

The company could use either GAAP-based rules or tax-basis rules to compute the effects of income tax expense on their analyses. Both methods are valid and commonly used in accounting. The choice of method would depend on the specific circumstances and objectives of the analysis.

If a Company Decides to Use Income Tax Expense as a Factor