Zelda reports only half the cash from the vending machines on her cash flow statement and income tax returns.Her purpose in doing so is:
A)to reduce her income tax liability.
B)to increase her net income on the financial statement.
C)to retain the cash for reinvestment in the business.
D)to make the business more attractive to a buyer.

Question

Quizplus · Accepted Answer

Zelda's purpose in reporting only half the cash from the vending machines on her cash flow statement and income tax returns is to reduce her income tax liability. This is a common form of tax evasion and is illegal.

Zelda Reports Only Half the Cash from the Vending Machines