Debits and Credits
Accounting Equation
What is Assets = Liabilities + Stockholders Equity
Reconciles book to taxable income due to differences in book accounting reporting requirements and tax law
What is a M-Adjustment
Tax return schedules that reconciles book-to-tax income/loss.
What is M-1 and M-3
The trial balance needs to be entered in this format.
What is Debit/Credit format
On a T-Account, Debits are entered on the _____ side while Credits are entered on the ________ side
What is left side and right side
For tax purposes if election made, $5000 of these are deductible in the first year and the remainder is amortized over 180 months.
What is organizational costs
KPMG receives a PBC from FJ&J in a certain format. The income statement reads as follows:
Net income (loss)
What is NOT debit/credit format
M-adjustments added at this level affect all workpapers
Journal entry when FJ&J LP makes a commitment in a partnership investment and $1000 capital is called.
What is debit to investment in partnership investment $1000 and credit to cash $1000
“Paper gains/losses” recorded on books that are either up or down on investments purchased, but not yet sold
What is unrealized gains/losses
What is Book to Tax Rec
In order to get your income from passthrough adjustment to show in AMP you have to do this.
What is check the box to automate book to tax adjustment and map all underlying investments to right account
Meaning of Debre and Crede
What is to owe and entrust
Involves regrouping items into the appropriate tax buckets. Does not change taxable income.
What is tax reclass
FJ&J LP recieves a K-1. After recording K-1 details, their workpaper 'Basis tab' shows a distribution occurred during the year that brought their investment in the entity below zero - then a gain was recorded to bring the basis back to zero.
What is distribution in excess of basis
Difference between auto and manual adjustments
What is Auto can put set up to pull the proper amounts for each account included in the entry
He is considered the “father” of accounting
Who is Luca Pacioli
Fines and penalties for violation of law, tax exempt interest income, non-deductible portion of meals and entertainment.
What is examples of permanent differences
The ____ ____ is the starting point in making M adjustments to calculate taxable income/loss. They show ____ income/loss
What is financial statements (TB) and Book
This is the only return line mapping that can be adjusted at the workpaper level?
What is the M-3 return line detail