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Problem 1: Which of the following statements regarding the reconciliation of accounting income before tax to taxable income is true?
a) Accounting and tax items that will be recorded over different reporting periods do not need to be included in the reconciliation.
b) Items that will only be reported on the entity's tax return should not be included in the reconciliation as the entity will report these items on the tax return filed.
c) Income items that have been added to income for accounting purposes but have not been included in income for tax purposes should be deducted in the reconciliation.
d) Expense items that have been deducted from income for accounting purposes but that are not deductible for tax purposes are always classified as timing differences.
Financial Statement Analysis and Preparation
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