Which of the following regarding Schedule M-1 and Schedule M-3 of Form 1120 is false?
A)In general, smaller corporations are required to complete Schedule M-1 while larger corporations are required to complete Schedule M-3.
B)Schedule M-3 lists more book-tax differences than Schedule M-1.
C)Both Schedules M-1 and M-3 reconcile to a corporation's bottom line taxable income.
D)Schedule M-1 does not distinguish between temporary and permanent book-tax differences whereas Schedule M-3 does.

Question

Quizplus · Accepted Answer

Schedule M-1 and M-3 are designed to reconcile financial accounting income (book income) with taxable income reported on the tax return, not directly to the bottom line taxable income.

Which of the Following Regarding Schedule M-1 and Schedule M-3