The immediate and long-term effects of the two event, Accounting Basics

Your client, Hope, of Hope's Country Corner, is curious about two events will influence both taxable and financial income. The first event involves the purchase of pottery-making equipment. Under the present tax laws, the Country Corner can take the entire cost of equipment as an expense on the current year's tax return, while GAAP dictates the equipment be depreciated over its useful live (seven years). The second event relates to a fine levied against the Country Corner by the local authorities when Hope erected an outdoor sign the size of which was in violation of local ordinance. Explain to Hope both the immediate and long-term effects of the two event in causing differences between taxable and financial income.

Posted Date: 3/14/2013 6:37:39 AM | Location : United States







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