CFA Practice Question

There are 520 practice questions for this study session.

CFA Practice Question

Reported effective tax rate is equal to ______.

A. taxes payable / taxable income
B. income tax expense / taxable income
C. income tax expense / accounting profit
Correct Answer: C

User Contributed Comments 4

User Comment
mattg Key word: REPORTED i.e. reported on financial statements
Seal Effective Tax Rate = inc tax exp / pre tax inc
Reported Effective Tax Rate = inc tax exp / Accounting Profit.
Is accounting profit same as pre tax inc?
johntan1979 Yes, acct prof = pre tax inc

And nope to mattg. Keyword is "effective". Answer A is statutory tax rate.
robbiecow Accounting Profit = Total Revenue - (Cost of Good Sold + Operating Expenses +Taxes)
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