During the current period,Canada Revenue Agency assessed a firm a nonrecurring income tax amount (but not a penalty) as a result of a Tax Court case involving a disputed deduction from a prior year (the firm lost the case).This amount should be reported by the firm as a (n):

Question

Quizplus · Accepted Answer

The nonrecurring income tax assessed by the Canada Revenue Agency is an expense or loss of the current period, as it relates to a tax dispute from a prior year. It is not a correction of period years' errors or a direct adjustment to owner's equity, and while it may be considered unusual or infrequent, it is not considered an extraordinary loss. Therefore, the correct choice is C.

During the Current Period,Canada Revenue Agency Assessed a Firm a Nonrecurring