Which of the following concerning operating taxes are true?
I.With full information,operating taxes can be computed without error.
II.The effects of research and development (R&D )should be removed from operating taxes.
III.Operating taxes are computed as if the company were financed entirely with equity.
IV.Making estimates of operating taxes based on tax rates in individual jurisdictions is not recommended.

Question

Quizplus · Accepted Answer

I is false because operating taxes may involve estimation and could also be affected by changes in tax laws or regulations.

II is true because R&D expenses are not considered part of operations and are excluded from operating taxes calculations.

III is true because operating taxes are calculated as if the company were financed entirely with equity, meaning there is no debt to consider.

IV is false because estimating operating taxes based on tax rates in individual jurisdictions is a commonly used method, though it may not always be accurate due to factors such as local tax incentives or exemptions.

Which of the Following Concerning Operating Taxes Are True