Reference no: EM132972189

Problem 1) Caesar Corporation reports interest income from investments in municipal bonds, which is not taxable, on their financial statements. Identify if any accounting-tax difference will result?

Select one:

a. Temporary difference; acounting income is greater than taxable income.

b. Temporary difference; taxable; income is greater than acounting income.

c. Permanent difference; accounting income greater than taxable income.

d. Permanent differences may be added back to or deducted from accounting income.

e. No difference since municipal interest is a non taxable income and not included in the accounting income.

Problem 2) In calculating the weighted average of common shares outstanding, when a stock dividend or stock split occurs, the additional shares are

Select one:

a. ignored.

b. weighted by the number of months outstanding.

c. considered outstanding at the beginning of the year.

d. considered outstanding at the beginning of the earliest year reported.

e. ignored in all earnings per share calculations.