Generally,when considering the differences between the accounting treatment and the income tax treatment of a particular item the accounting treatment is based on:
A)cash flows
B)cash flows adjusted for depreciation charges
C)accrual accounting and is subject to the requirements of accounting standards
D)the income tax legislation.

Question

Quizplus · Accepted Answer

The accounting treatment is based on accrual accounting and is subject to the requirements of accounting standards, which dictate how transactions are recognized in financial statements. While income tax treatment is determined by the regulations and legislation governing taxation. Cash flows and depreciation charges may be relevant to both, but they are not the basis of the accounting treatment.

Generally,when Considering the Differences Between the Accounting Treatment and the Income