Which of the following series of inequalities is generally most accurate? A. Gross income is...
Question:
Which of the following series of inequalities is generally most accurate?
A. Gross income is greater than or equal to adjusted gross income which is greater than or equal to taxable income
B. Adjusted gross income is greater than or equal to gross income which is greater than or equal to taxable income
C. Adjusted gross income is greater than or equal to taxable income which is greater than or equal to gross income
D. Gross income is greater than or equal to taxable income which is greater than or equal to adjusted gross income
Gross Income
Gross income is the total income an individual or business organization receives from different sources for providing different services and for doing different activities. It is generally found in the company's income statements.
Answer and Explanation: 1
Become a Study.com member to unlock this answer! Create your account
View this answerOption A is the correct answer.
Adjusted gross income is calculated by adjusting the gross income, and taxable income is calculated by adjusting...
See full answer below.
Ask a question
Our experts can answer your tough homework and study questions.
Ask a question Ask a questionSearch Answers
Learn more about this topic:
Get access to this video and our entire Q&A library
Operations of an Income Statement
from
Chapter 8 / Lesson 5
6.2K
An income statement demonstrates the company's income and expenses over a given timeframe, used to reflect performance. Learn the operations of income statements in multi vs single-steps and the details of the line items they use.
Related to this Question
- Which of the following series of inequalities is generally most accurate? A. Gross income is greater than or equal to taxable income greater than or equal to adjusted gross income B. Adjusted gross income greater than or equal to taxable income great
- Which of the following series of inequalities is generally most accurate? A) Gross income greater than adjusted gross incomegreater than taxable income B) Adjusted gross income greater than gross income greater than taxable income C) Adjusted gross inc
- Tax deductions for adjusted gross income (AGI) are which of these? a. Deductions in determining adjusted gross income b. Always reduce taxable income dollar-for-dollar c. All of these d. Deductions "above the line"
- What is adjusted gross income (AGI)? a) The taxable income after deductions b) The taxable income before deductions c) The taxpayer's after-tax income d) The amount that is subject to tax.
- Explain the differences between taxable income and adjusted gross income.
- The income tax base for an individual tax return is: a. Adjusted gross income minus from AGI deductions. b. Gross income. c. Realized income from whatever source derived. d. Adjusted gross income.
- What are the taxes paid in 2014? Assume the firm pays equal to 35% of taxable income.
- Which type of distribution from an S corporation is taxed to the owner at the 0% / 15% / 20% Federal income tax rate? a. AAA. b. Non-separately computed income. c. ACT. d. AEP.
- Which of the following is not a basic concept of income? A. psychic income B. real income C. money income D. gross income
- The income tax law established which of the following as a basis for taxation? A) Economic income B) Increase in wealth C) Business income D) Accounting income
- Which of the following statements is incorrect? A- The income tax rates applied to trusts and estates are highly compressed compared to income tax rates for individuals. B- Form 1041 is the income t
- Which of the following uncorrected hours would result in both acids and that income being overstated? A. Failure to adjust unearned revenue to recognize revenue earned B. Failure to record depreciat
- What is the amount of net income (assuming no income taxes)?
- Describe the basic individual income tax formula. What is the difference between deductions for adjusted gross income (AGI) and deductions from AGI? Which type of deduction provides the greatest benef
- Suppose you currently have taxable income of $50,000 per year. You are subject to a marginal income tax rate of 20%, and your current average tax rate is 10%. a. How much do you pay annually in tax
- What is the difference between net income and taxable income?
- "Effective income tax rates": a. cannot be accurately determined. b. are seldom considered by economists. c. have no legal meaning. d. refers to the average percentages of taxable income actually paid in taxes.
- "Effective income tax rates" a) are seldom considered by economists. b) cannot be accurately determined. c) have no legal meaning. d) refers to the average percentages of taxable income actually paid in taxes.
- What is a company's book equivalent of taxable income and how does this computation enter into the income tax provision process?
- What is the relationship between assessable income, ordinary income and statutory income?
- Consider the term distributable net income as it is used with respect to the Federal income taxation of trusts and estates. 1. How is this amount computed? 2. Where is it used in computing the parties' taxable incomes?
- The PIA is generated with a formula such that A) high-income earners receive less than low-income earners. B) high-income earners receive the same as low-income earners. C) higher income earners receive the same proportion of AIMA as low-income earners
- What is true when income for tax purposes is higher than accounting income? (a) Actual income taxes payable will be the same as accounting income tax expense (b) Actual income taxes payable will be higher than accounting income tax expense (c) Actual inco
- For the year 2009, Tally Corporation reported $120,000 pretax income (average annual income tax rate of 30%). The after-tax income was __________.
- Demand side economists criticized the income taxation of capital gains because a) it discriminated against earned income in favor of investment income. b) they believed the tax to be too high. c) they believed that capital gains should not be taxed at
- Demand-side economists criticized the income taxation of capital gains because: a. it discriminated against earned income in favor of investment income. b. they believed the tax to be too high. c. they believed that capital gains should not be taxed a
- Which of the following statements is incorrect? a. The AMTI is calculated by modifying the regular tax Taxable Income. b.The AMT is a flat-rate alternative to the regular tax. c. Taxpayers may choose to pay either the regular tax or the AMT. d. Only b
- Mitch, a single filer, had wages of $188,000 in the tax year. He earned an additional $15,000 in income from dividends and capital gains. He had no other income or adjustments. What is his net investment income tax?
- Which of the following would not appear on a multiple-step budgeted income statement? a. operating income. b. salaries payable. c. gross profit. d. income tax expense.
- A company, subject to a 40% tax rate, desires to earn $500,000 of after-tax income. How much should the firm add to fixed costs when figuring the sales revenues necessary to produce this income level? a. $200,000 b. $300,000 c. $500,000 d. $833,333 e
- The tax rates are as shown. Taxable Income Tax Rate $0 - 50,000 15% 50,001 - 75,000 25% 75,001 - 100,000 34% 100,001 - 335,000 39% What is the average tax rate for a firm with a taxable income of $123,013? a. 27.87% b. 20.00% c. 36.28% d. 25.38% e. 3
- "Marginal income tax rates" a) are nearly always lower than effective income tax rates. b) refers to the tax rate or bracket on the first dollar earned. c) refers to the tax rate or bracket on the last dollar earned and in a progressive income tax system,
- What income is deferred to a later year when computing taxable income but is included in earnings and profits (E&P) in the current year?
- PMF, Inc. is equally likely to have EBIT this coming year of $0 million, $10 million, or $20 million. Its corporate tax rate is 38%, and investors pay a 15% tax rate on income from equity and a 45% tax rate on interest income. a. What is the effective tax
- Beau earned $25,000 of net earnings from a tax preparation business that he runs during tax season. He also earned a salary of $95,000 from his full-time job. How much self-employment tax must he pay for 2013?
- Which of the following statements concerning taxation is accurate? A. Only the owners must pay taxes on corporate income. B. Corporations pay federal income taxes but not state income taxes. C. Corporations pay federal and state income taxes. D. Partn
- Which of the following is defined as a tax rate that decreases when the tax base increases? a. Average tax b. Proportional tax c. Marginal tax d. Progressive tax e. Regressive tax
- Computing the Tax. Wayne is single and has no dependents. Without considering his $11,000 adjusted net capital gain (ANCG), his taxable income, which includes no investment income, in 2015 is as follo
- Which of the following are true? A. Deductions are subtracted from gross income to arrive at AGI. B. Exemptions are subtracted from gross income to arrive at AGI. C. Deductions are subtracted from AGI to arrive at taxable income. D. Exemptions are sub
- Which of the following statements about conversion of income is correct? a. Converting ordinary income into capital gain is a beneficial tax planning strategy. b. Converting capital gain income into ordinary income is a beneficial tax planning strategy.
- Identify the similarities and differences between the corporate taxable income formula and the individual taxable income formula.
- Taxable income and pretax financial income would be identical for Skysong Co. except for its treatments of gross profit on installment sales and estimated costs of warranties. The following income computations have been prepared. Taxable income 2016 2017
- Which of the following differences would result in future taxable amounts? a. Expenses or losses that are deductible after they are recognized in financial income. b. Revenues or gains that are taxable before they are recognized in financial income. c.
- Which of the following companies is taxed at a flat rate of 35 percent? a) An auto parts manufacturing corporation with taxable income of $73,000. b) A consulting corporation of owner-employee CPAs
- The tax law refers to gross income, yet the term gross income is not found on Form 1040. Explain. Why is it important to understand the concept of gross income even though the term is not found on Form 1040?
- Which of the following is true regarding DNI and a complex trust? a. The income distribution deduction is limited to the greater of DNI or the actual distributions. b. DNI in increased by tax-exempt income included in the amount of accounting income. c. I
- Beau earned $25,000 of net earnings from a tax preparation business that he runs during tax season. He also earned a salary of $95,000 from his full-time job. How much self-employment tax must he pay for 2013? (Round calculations to the nearest dollar).
- Based on the amounts of taxable income below, compute the federal income tax payable in 2016 on each amount assuming the taxpayers are married filing a joint return. Also, for each amount of taxable income, compute the average tax rate and the marginal ta
- What is the difference between accounting income and taxable income?
- Can multiple-step income statement tell what a company pays in income tax?
- Which of the following is true regarding income patterns in America? a. The income of the average American family exceeds $100,000. b. The top fifth of Americans in terms of income receive half of the total income in the nation. c. The bottom fifth of
- What is the tax due to this individual on the $1,000 of dividend income from corporate stock if the person is filling single and is in the 32% marginal rate bracket? Show work.
- Based on the amounts of taxable income below, compute the federal income tax payable in 2013 on each amount assuming the taxpayer is married filing a joint return. Also, for each amount of taxable income, compute the average tax rate and marginal tax rate
- Paddle Fans & More has a marginal tax rate of 34 percent and an average tax rate of 23.7 percent. If the firm earns $138,500 in taxable income, how much will it owe in taxes? a. $31,366.67 b. $31,500.00 c. $32,824.50 d. $39,957.25 e. $47,090.00
- Assume a tax system with a tax of $1,000 on taxable income of $10,000 and a $1,500 tax on taxable income of $20,000. Is the tax rate system: A. Progressive B. Regressive C. Proportional D. None of the above.
- Which of the following is not a finding of previous empirical research on income tax allocation? A) Income using income tax allocation had a higher degree of association with security price behavior than income determined without income tax allocation. B)
- Corporate Tax Rate Schedule Range of taxable income Base tax rate + (Marginal rate * amount over base braket) 0 to 50,000 0 + (15% * amount over $0) 50,000 to 75,000 7,500 + (25% * amount over $50,00
- Identify one item of income that is included in gross income and one item of income that is excluded from gross income. Why are certain items excluded from gross income?
- What deductions are allowed for taxable income purposes but denied for earnings and profits (E&P)?
- Michelle receives $210,000, and stephanie receives 140,000 in a split of 350,000 net income. Which expression reflects the income splitting arrangement?
- If the incremental federal income tax rate is 38% and the incremental state income tax rate is 6%, what is the effective combined income tax rate (t)? If state income taxes are 14% of taxable income,
- What is the difference between deductions for adjusted gross income (AGI) and deductions from AGI? Which type of deduction provides the greatest benefit to the taxpayer? Explain why this distinction is critical to individual income taxation. Provide an ex
- The statement concerning a company's income tax expense that is correct is: A. Income tax expense often differs from the amount of tax calculated by the tax department. B. Income tax expense will be the same as the amount of tax calculated by the tax depa
- Abbygail, who is single, had taxable income of $120,000 for 2015. She had positive AMT adjustments of $35,000; negative AMT adjustments of $16,000; and tax preference items of $45,000. a. Compute he
- Which statement best describes the concept of the double taxation of corporation income? a. Subject to two levels of taxation: regular tax and the alternative minimum tax. b. Corporate income is taxed twice at the corporate level: first when earned and th
- Your company generated $3.0 million in revenue for 2014 and incurred $2.35 million in expenses. a. How much Federal tax due you owe? b. What is your average tax rate? c. What is your marginal tax rate
- Which of the following statements about the alternative minimum tax is true? A. All of the answers are true. B. Regular taxable income is the starting point for determining AMT. C. Taxpayers must add back the standard deduction amount regardless of whe
- For income tax purposes fraudulent losses may be classified as a. deductions. b. offsets to reportable revenues. c. reductions in retained earnings. d. the first two (2) options are correct. e. All of the above
- Assume a tax system with a tax of $1,000 on taxable income of $1,500 tax on taxable income of $20,000. Is the tax rate system: a. None of the above. b. Progressive c. Regressive d. Proportional
- Determine the Taxable Earnings Subject to FUTA Tax. For each of the described pay periods, determine the taxable earnings subject to FUTA tax: NOTE: For simplicity, all calculations throughout this ex
- Beau earned $25,000 of net earning from a tax preparation business that runs during tax season. He also earned a salary of $95,000 from his full-time job. How much self employment tax must he pay for 2013?
- What type of deductions is directly deducted from the Gross Income? a. Deductions for AGI. b. Tax-exempt income. c. Tax credit. d. Itemized deductions
- Which statement best describes the concept of the "double taxation" of corporation income? a. Corporate income is subject to two levels of taxation: the regular tax and the alternative minimum tax. b. Corporate income is taxed twice at the corporate level
- (a) How could the AMT be calculated without using regular taxable income as a starting point? (b) Give at least two examples.
- Compute: 1) Adjusted Gross Income, 2) Taxable Income, 3) Tax Owed or Refunded Mark and Michelle are married, file a joint return and have two dependent children. During 2016, they report following it
- Amold Industries has pretax accounting income of $28 million for the year ended December 31, 2016, The tax rate s 30% The only difference between accounting income and taxable income relates to operat
- What amount should the company report as its income before income taxes?
- Calculate the net income includible in taxable income for the following hobby. Presume Val has AGI of $69,000 before considering anything from the hobby activity. Income 27,000 Mortgage interest and
- An unmarried taxpayer with no dependents expects an adjusted gross income of $48,000 in a given year. His non-business deductions are expected to be $3400. a) What will his federal income tax be? b)
- An unmarried taxpayer with no dependents expects an adjusted gross income of 70,000 in a given year. His non-business deductions are expected to be 6000. a) What will his federal income tax be? b) H
- Which of the following produces an incorrect observation? A. The tax shield for NOPAT calculations is subtracted from the total tax expense to determine the tax on operating results. B. A higher NOPAT, will typically result in a higher the return on inv
- Which of the following is incorrect? a. All salaries of a business are deductible. b. To be deductible, a business expense must be both ordinary and necessary. c. The income and expense of a sole proprietorship business are reported on Schedule C d. T
- Which of the following items would be an Itemized Deduction on Schedule A of Form 1040 "not" subject to the Two Percent (2%) Of Adjusted Gross Income (AGI) Limitation? a. Professional dues paid by an accountant (employed by Ford Motor Corporation) the Na
- Explain how to find income before tax on a multi-step income statement.
- Lillian, a single taxpayer, had the following income and deductions for the tax year 2018. Compute Lillian's marginal, average and effective tax rates. | __Income__ | | Salary | $90,000 | Business Income | 24,000 | Interest income from taxable bonds
- With a taxable income of $332,000, what it the effective tax rate? What is marginal tax rate?
- Accountants who favor interperiod income tax allocation argue that income taxes are an expense rather than a distribution of earnings. Explain the significance of this argument. Do not explain the definitions of expense or distribution of earnings.
- For disclosing the periodic income tax expense on the income statement, one method advocated by proponents of the net-of-tax method theorize that this method should report: A. income tax expense equal to culvert income tax payable B. only deferred tax a
- Explain the general types or categories of income that exist under the Code (e.q., ordinary), and how the amount of each type of income is calculated and taxed under the Code, including what rate may apply.
- Which of the following is referred to as net pay? a. Gross pay minus federal and state income taxes. b. Gross pay minus all deductions. c. Take-home pay plus all deductions. d. All deductions plus all with holdings.
- Which of the following types of income is subject to the self-employment tax? a. Interest income b. Gain on sale of real estate c. Income from a sole proprietor's law practice d. Dividends from stock
- Which of the following statements is incorrect? a. If the tentative minimum tax exceeds the regular income tax liability, the AMT is $0. b. The exemption amount increases as AMTI increases. c. The AMT tax rate for an individual taxpayer can be as high
- Identify which of the following statements is true. a. All cash distributions from a partnership require the partners to pay taxes on those distributions. b. Distribution of partnership income in the form of cash to partners is generally taxable to the
- Jamie is single. In 2016, she reported $112,000 of taxable income, including a long-term capital gain of $6,200. What is her gross tax liability, rounded to the nearest whole dollar amount?
- What is the Net Investment Income Tax? Explain.
- What are some tax planning strategies for minimizing gross income and maximizing the benefit from allowable expenses?
- In general terms, identify the similarities and differences between the corporate taxable income formula and the individual taxable income formula.
- Which of the following taxes does not represent a payroll deduction a company may incur? a. Federal income taxes b. FICA taxes c. State unemployment taxes d. State income taxes
- For the year ended December 31, 2016, Nelson Co.'s income statement showed income of $435,000 before income, tax expense. To compute taxable income, the following differences were noted: Income from
- Determine taxable income in each of the following instances. Assume that the corporation is a C corporation and that book income is before any income tax expense. a. Book income of $50,000 including capital gains of $2,000, a charitable contribution of $
Explore our homework questions and answers library
Browse
by subject