Which one of the followings is wrong in calculating the taxable profit from the accounting profit? Reading required: Learning objective 13.4 on page 414Group of answer choicesSubtracting the deductionSubtracting the accounting incomeAdding the accounting expenseSubtracting the assessable income (taxable revenue)
Question
Which one of the followings is wrong in calculating the taxable profit from the accounting profit? Reading required: Learning objective 13.4 on page 414Group of answer choicesSubtracting the deductionSubtracting the accounting incomeAdding the accounting expenseSubtracting the assessable income (taxable revenue)
Solution
The incorrect step in calculating taxable profit from accounting profit would be "Adding the accounting expense". In general, you subtract expenses from revenue to calculate profit, not add them. Adding expenses would increase the profit amount, which is not correct as expenses reduce profit.
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