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NEW QUESTION 45
Which of the following items would have a tax consequence for financial accounting purposes?
I). Fines Paid for Law Violations
II). Product Warranty Liabilities
III). Life Insurance Proceeds Received (co. is beneficiary)
Answer: B
Explanation:
Fines paid for law violations are never deductible for tax purposes, and life insurance proceeds where the company is the beneficiary are never taxed. Therefore, these are permanent differences and do not have tax consequences. Differences due to warranty expenses, however, will create temporary differences and do have tax consequences.
NEW QUESTION 46
The relationship between the price of a callable bond, the price of an option-free bond and the price of the embedded call option is
Answer: A
NEW QUESTION 47
Which of the following statements concerning valuation allowance for deferred tax assets is FALSE?
Answer: C
Explanation:
The timing and amount of valuation allowance is discretionary and a management may use it to manipulate earnings.
NEW QUESTION 48
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