M3-Differences Between Book and Tax

Question 1

For tax purposes, the corporation must use the direct write-off method. The bad debt expense taken on the allowance method is disallowed. (true or false)

Answer 1

true

Question 2

Schedule M-1 reports the reconciliation of income (loss) per books to income (loss) per the tax return. (Note: It reports both permanent and temporary differences that are discussed in the Financial textbook for deferred taxes.) what are some items that are included on this schedule?

Answer 2

1) items that are reported as income for book purposes but not for tax purposes
2) items that are reported as an expense for book purposes but not for tax purposes
3) items that are reported as taxable income for tax purposes but not as income for book purposes
4) items that are reported as deductible for tax purposes but not as an expense for book purposes.