Parent and Subsidiary Corporations have filed calendar-year consolidated tax returns for several years. Parent Corporation uses the cash method of accounting while Subsidiary Corporation uses the accrual method of accounting. If Parent lends Subsidiary money,
A) the interest expense is deductible when accrued.
B) the interest expense and interest income may be reported in different consolidated return years.
C) the interest income is reported when the interest expense is accrued by Subsidiary.
D) the interest expense deduction is taken when Parent reports the interest income.
C) the interest income is reported when the interest expense is accrued by Subsidiary.
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Which one of the following statements best describes the concept of materiality?
A. Materiality is largely a matter of professional judgment. B. Materiality is determined by reference to specific quantitative guidelines established by the AICPA. C. Materiality depends on the nature of an item but not on the dollar amount of the item. D. Materiality depends only on the dollar amount of an item relative to other items in the financial statements.
Free cash flow is the measure of operating cash flow available for corporate purposes after providing sufficient fixed asset additions to maintain current productive capacity and dividends
Indicate whether the statement is true or false
Answer the following statements true (T) or false (F)
1. An appropriate strategy for most negative messages is the indirect one. 2. With the indirect strategy, the message begins with a buffer. 3. Negative news should be stated in the middle of the body paragraph of an indirect message. 4. Although a claim letter deals with something negative, it should be written directly.
If managers of a company do not understand the behavior of its costs, they are likely to make poor decisions about the company's operations.
Answer the following statement true (T) or false (F)