Income Taxes

Introduction The liability, income taxes payable is based on taxable income. This is the amount a firm will have to pay the federal government as the result of its operations, as defined by the IRC. The question is, if the firm’s pretax accounting income is different from its taxable income because of timing differences, what …

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As we know there are various differences between generally accepted accounting principles (GAAP) and the provisions of the Internal Revenue Code (IRC). These differences result from the varying objectives of GAAP and the IRC. The objectives of GAAP are aimed at providing investors and other users of financial statements with reliable and relevant financial information. …

Read moreDifferences between accounting and taxable income