Purchase Solution

What are the major differences between GAAP and income tax?

Not what you're looking for?

Ask Custom Question

Please answer the following question about GAAP and income tax accounting. Provide at least 300 words.

What are some of the major differences between GAAP and income tax accounting?

Purchase this Solution

Solution Summary

This response presents the theory of the difference between GAAP and tax together with general examples to explain. Then eight specific examples of common types of differences between book and tax are listed with details. The explanation is given in 352 words.

Solution Preview

Question: What are some of the major differences between GAAP and income tax accounting?

Solution:
The overriding, or overall difference between GAAP and Tax accounting is the basis in theory behind each. GAAP accounting follows strict conventions applied consistently over time. The two most important GAAP principals that vary with tax reporting are the matching principle and the revenue recognition principle. The very basis of GAAP requires that revenue be matched to expense, and revenue be recognized when earned.

Tax law, on the other hand, is motivated by the need ...

Purchase this Solution


Free BrainMass Quizzes
Income Streams

In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.

Accounting: Statement of Cash flows

This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.

Six Sigma for Process Improvement

A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.

IPOs

This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)

Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.