Explain how the matching concept is applied in tax allocation and how this differs from other applications of matching.
What will be an ideal response?
ANSWER:
Matching, as it is employed in tax allocation, differs from all other applications of matching. In the usual situation, expenses are matched against revenues. However, the matching that occurs under income tax allocation attempts to normalize income tax expense with pretax accounting income. Hence, after-tax income is also correlated with pretax income. The matching brought about by tax allocation literally occurs at a lower point on the income statement than that of any other expense.
You might also like to view...
Answer the following statements true (T) or false (F)
1. Greg, a manager at the Rome, Italy, store of an American-owned clothing company, understands the differences and similarities between American and Italian customers, customs, culture, and practices. As a result, Greg uses his understanding of Italian culture, tastes, and business practices to help him market his products to Italian customers in Rome—and he uses his understanding of American culture to sell his products to American tourists who are visiting Rome. Greg is an example of a geocentric manager. 2. Two managers from an Electronics Mart were talking to Ty, their district manager, about Harriet, the unpopular store manager. Susan, the assistant manager, said, "I believe I speak for other managers and employees when I say that Harriet acts like she knows it all. We all feel that Harriet does not listen to any of us because she always thinks her way is right and does not want to consider any other opinion." Harriet is an example of a geocentric or parochial manager. 3. In 1999, the top exporting nation was the United States, but in 2015 the world's top exporting nation was China. 4. Over the last two years, an American computer manufacturer has partnered with a technology organization in Japan to develop and produce computers and printers. The partnership benefits both organizations and is an example of countertrading.
Which of the following documents would not originate with the purchasing company?
a. Purchase order b. Check c. Receiving report d. Invoice
In the context of doing business with people from other cultures, effective communicators ________
A) memorize a list of cultural difference between countries B) are ready to adapt to different cultural needs C) ignore cultural differences and treat everyone equally D) treat others as they would like to be treated E) follow exclusively the communication conventions of their own culture
Which of the following statements is true about appeals to the U.S. Supreme Court?
A) The U.S. Supreme Court grants most of the petitions requesting an appeal. B) A refusal to hear a case by the Supreme Court has a precedential effect. C) Quo warranto is a writ issued by an appellate court to a lower court to send the record of the case to the Supreme Court. D) The Supreme Court will only issue a writ of certiorari if at least four justices vote to hear the case.