In the U.S., corporations must report their profits (or losses) to both their own stockholders and the Internal Revenue Service (IRS). While you might think that the numbers reported to both stockholders and the IRS would be the same, this is actually not the case. In fact, U.S. firms keep two sets of books, one for the IRS, called the tax books, and another set of books for their annual reports to stockholders (called the stockholders' books). The tax books contain the profits (or losses) reported to the IRS, while the stockholders' books contain the profits (or losses) reported to stockholders. Which of the following statements is TRUE regarding these two sets of books that firms keep? The tax books follow the rules of the Financial Accounting Standards Board (FASB). Companies typically use straight-line depreciation for the tax books and accelerated depreciation for the stockholders' books. The stockholders' books follow the rules of the Financial Accounting Standards Board (FASB). IRS rules do not permit income reported in the stockholders' books to be higher than income reported in the tax books. All of the above