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Accounting | Accounting homework help

Which one is not correct in the context of tax accounting?

(a) Deferred tax liability might have resulted when tax expense on the income statement is less than tax payment based on tax code

(b) Non-taxable expense causes permanent differences between pretax accounting income and taxable income

(c) Corporate income tax is an expense, not a distribution of profits to the government

(d) Deferred tax assets might have resulted from loss carryback.

The Institute of Management Accountants’ Statement of Ethical Professional Practice states that when faced with significant ethical issues, management accountants should first:

A) discuss such problems with the immediate superior except when it appears that the superior is involved.

B) clarify relevant concepts by confidential discussion with an objective advisor to obtain an understanding of possible courses of action.

C) follow the established policies of the organization bearing on the resolution of such conflict.

Some items are treated differently for accounting purposes than they are for tax purposes. For the following item: Premiums paid on life insurance of officers (company is the beneficiary), indicate whether it is considered a permanent difference or a temporary difference. For a temporary difference, indicate whether it will create a deferred tax asset or a deferred tax liability.

Which of the following statements is most correct?

A) If two companies have the same ROE and the same risk they must have the same residual income (abnormal earnings) for the year.

B) If two companies have the same net book value and the same residual income this year, then their stock prices must be the same.

C) If two companies have the same ROE and the same stock price their earnings must be the same for the year.

D) If two companies have the same ROE, net book value, and cost of capital then their residual income must be the same for the year.

Which action is not considered an act discreditable to the accounting profession?

a) Being finally determined by a court of competent jurisdiction to have violated any of the federal antidiscrimination laws.

b) Having a bank collect notes received from a client in payment of fees.

c) Failing to follow standards and procedures established by governmental agencies in audits of grants by those agencies.

d) Negligently permitting another to sign a document containing materially false and misleading information.

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