Question

What is the justification for a corporation determining income for financial reporting purposes differently than the way it is determined for tax purposes?

Answer 1

Solution:

What is the justification for a corporation determining income for financial reporting purposes differently than the way it is determined for tax purposes?

The main reason for forming a corporation is to limit the liability of the owners. In a sole proprietorship or partnership, the owners are personally liable for the debts and liabilities of the business, and in many instances, creditors can go after their personal assets to collect business debts.

When all is said in done pay for money related revealing reason pursue accumulation premise where as pay for duty purposes Use cash premise.

In the event that expense premise bookkeeping is utilized for monetary announcing reason the proprietors or say the investors may get miss leaded when for instance there are no money accumulations in multi year or aggregate money accumulations of past and current year in a single year.

So accumulation premise of bookkeeping is utilized for budgetary detailing reason with the goal that we can convey the real aftereffects of tasks.

The duty premise of bookkeeping is readied in light of the fact that according to the rules of IRS or expense specialist in your particular Country it must be utilized for filling returns.