ACCO 340 Lecture Notes - Lecture 5: Capital Asset, Income Statement, Financial Statement

• School: Concordia University
• Department: Accountancy
• Course: ACCO 340
• Professor: Elizabeth Peltier- Wagner

Document Summary

Net income as per financial statement + benefits deductions = net income for tax purpose. Inclusion to income in the ita (cash basis) Expenses not deducted must be added: amortization of discount/premium bonds: Expenses related to the issue of debt/shares: legal accounting fees can be deducted over 5 years (20% of fees per year) therefore you have to add back the 80% from the ita. Allowed if required by the bank (line of credit) Deducted the amount paid cash therefore you have to add back the amount that hasn"t been paid. Capitalize it balance sheet paid or accounts payable. Expense it income statement paid or accounts payable. For ita add back amount that was not paid (+) For ita deduct amount paid (no adjustment needed) For ita deduct amount paid (-) Deductible if there is no future benefit. If inspection didn"t pass, deduct the amount paid for the inspection. If inspection passes, you cannot deduct the amount.