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Financial vs. tax depreciation The following is an excerpt from a conversation between two employees of Linquest Technologies, Don Corbet and Rita Shevlin. Don is the accounts payable clerk, and Rita is the cashier. Doi: Rita. could I get your opinion on something? Rita: Sure, Don. Doss: Do you know Margaret, the fixed assets clerk? Rita: I know who she is, but I don’t know her real well. Why? Don: ll. I s talking to her at lunch last Tuesday about how she liked her job. etc. You know. the usual ... and she mentioned something about having to keep two sets (1 books ... one for taxes and one for the flnanal statements. That cant be good accounting. can it? What do you think? Rita: Two sets of books? H doesn’t sound right. Don: It doesn’t seem right to me either. I was always taught that you had to use generally accepted accounting principles. how’ can there hr two sets of books’ What could be the difference between the two? how would you respond to Rita and Don if you were Margaret?

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Survey of Accounting (Accounting I)

8th Edition
Carl Warren
Publisher: Cengage Learning
ISBN: 9781305961883

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Section
BuyFindarrow_forward

Survey of Accounting (Accounting I)

8th Edition
Carl Warren
Publisher: Cengage Learning
ISBN: 9781305961883
Chapter 7, Problem 7.2C
Textbook Problem
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Financial vs. tax depreciation

The following is an excerpt from a conversation between two employees of Linquest Technologies, Don Corbet and Rita Shevlin. Don is the accounts payable clerk, and Rita is the cashier.
Doi: Rita. could I get your opinion on something?
Rita: Sure, Don.
Doss: Do you know Margaret, the fixed assets clerk?
Rita: I know who she is, but I don’t know her real well. Why?
Don: ll. I s talking to her at lunch last Tuesday about how she liked her job. etc. You know. the usual ... and she mentioned something about having to keep two sets (1 books ... one for taxes and one for the flnanal statements. That cant be good accounting. can it? What do you think?
Rita: Two sets of books? H doesn’t sound right.
Don: It doesn’t seem right to me either. I was always taught that you had to use generally accepted accounting principles. how’ can there hr two sets of books’ What could be the difference between the two?
how would you respond to Rita and Don if you were Margaret?

To determine

Concept Introduction:

Accounting:

Accounting is an art of recording, classifying, analyzing and summarizing the financial statement to produce meaningful information and reports.

To Indicate:

If it is good to keep two sets of books

Explanation of Solution

Accounting is an art of recording, classifying, analyzing and summarizing the financial statement to produce meaningful information and reports...

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Chapter 7 Solutions

Survey of Accounting (Accounting I)
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