Which statement accurately describes the correct tax treatment. а.Donation to the football club is an allowable expense for income tax purposes as the football club is a registered club. Therefore, we could not add this back in the income tax computation. b.If refunds from income tax of $150,000 included in revenue - the amount is subtracted in the income tax computation because the amount should have been credited to a tax recoverable account rather than to the profit and loss. Some countries specifically state that this is not a taxable income. c.Legal expenses for debt recovery are not allowed. We add this back in the income tax computation. d.The percentage of bad and doubtful debts at year-end is an estimate and allowable as it is specific bad debts provision. No adjustment is made to the income tax computation.
Which statement accurately describes the correct tax treatment. а.Donation to the football club is an allowable expense for income tax purposes as the football club is a registered club. Therefore, we could not add this back in the income tax computation. b.If refunds from income tax of $150,000 included in revenue - the amount is subtracted in the income tax computation because the amount should have been credited to a tax recoverable account rather than to the profit and loss. Some countries specifically state that this is not a taxable income. c.Legal expenses for debt recovery are not allowed. We add this back in the income tax computation. d.The percentage of bad and doubtful debts at year-end is an estimate and allowable as it is specific bad debts provision. No adjustment is made to the income tax computation.
Chapter2: Gross Income And Exclusions
Section: Chapter Questions
Problem 1MCQ: The definition of gross income in the tax law is: All items specifically listed as income in the tax...
Related questions
Question
Which statement accurately describes the correct tax treatment.
а.Donation to the football club is an allowable expense for income tax purposes as the football club is a registered club. Therefore, we could not add this back in the income tax computation.
b.If refunds from income tax of $150,000 included in revenue - the amount is subtracted in the income tax computation because the amount should have been credited to a tax recoverable account rather than to the profit and loss . Some countries specifically state that this is not a taxable income.
c.Legal expenses for debt recovery are not allowed. We add this back in the income tax computation.
d.The percentage of bad and doubtful debts at year-end is an estimate and allowable as it is specific bad debts provision. No adjustment is made to the income tax computation.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT