Which statement is correct A Financial reporting rules are g

Which statement is correct? A) Financial reporting rules are generally consistent with tax reporting rules. B) Tax rules are generally consistent the principles used in accrual accounting. C) Tax rules generally require a higher degree of reliability than financial reporting. D) Accounting income is generally similar to taxable income. 1.5

Solution

Correct answer is C) Tax rules generally require a higher degree of reliability than financial reporting.

because in Financial reporting rules like GAAP we record all transactions but in tax accouting applying tax rules require recording of only those transactions which have an impact on tax situation of company. That is why tax rules require higher degree of reliability than financial reporting.