Evaluate the following statement: It is possible for a firm to have one depreciation schedule for tax purposes and another for financial reporting purposes.

Question

Quizplus · Accepted Answer

It is common for a firm to use different depreciation methods and schedules for tax and financial reporting purposes. The tax depreciation schedule is based on the tax law and its purpose is to determine the amount of tax a company owes. The financial reporting depreciation schedule is based on Generally Accepted Accounting Principles (GAAP) and is used to provide accurate information about the company's financial performance and condition to investors and stakeholders. Therefore, it is possible for a firm to have one depreciation schedule for tax purposes and another for financial reporting purposes.

Evaluate the Following Statement: It Is Possible for a Firm