A company that uses accounting methods in preparing its tax returns that differ from the accounting methods used to prepare its financial statements is
A)in violation of the consistency principle
B)not necessarily violating either the income tax laws or generally accepted accounting principles
C)probably guilty of tax evasion
D)in violation of the relevance assumption

Question

Quizplus · Accepted Answer

It is not uncommon for companies to use different accounting methods for tax purposes and financial reporting purposes. As long as the methods are both legal and in compliance with accounting principles, there is no violation.

A Company That Uses Accounting Methods in Preparing Its Tax