CHARACTERISTICS OF ACCOUNTING AND TAXABLE INCOME. Match each characteristic with the appropriate subject to create a correct statement about the accounting net income or taxable income of corporations. Your answer should list the d numbers 1 through 10 and, next to each number, the letter of the matched subject. For example, “1B” stands for the correct sentence “Taxable income (not accounting net income) is reported on a tax return and used, in conjunction with other information, to compute the amount of taxes owed for the period.”

SUBJECT

a) Accounting income (not taxable income)

b) Taxable income (not accounting income)

c) Both accounting income and taxable income

d) Neither accounting income nor taxable income CHARACTERISTIC 1. Is reported on a tax return and used, in conjunction with other information, to compute the amount of taxes owed for the period 2. Is measured according to generally accepted accounting principles 3. Permits use of accelerated depreciation methods 4. Includes tax expense for the period 5. Is measured according to rules established by the U.S. government 6. Is affected, either directly or indirectly, by changes in rules governing the computation of taxable income 7. Is the basis for computing income tax expense 8. Includes the period’s short-term capital losses in excess of capital gains 9. Includes interest revenue on municipal bonds 10. Under certain circumstances, may include depletion in excess of cost