Question

Income Taxes are allocated to each of the following EXCEPT?

a. Balance sheet adjustments
b. Continuing operations
c. Prior period adjustments
d. Discontinued operations.

Answer 1

Income taxes are not allocated to balance sheet adjustments because income taxes are not associated with changes in assets, liabilities, or equity. Instead, income taxes are allocated to continuing operations, prior period adjustments, and discontinued operations depending on the circumstances and accounting rules. Hence, the correct answer is option a.

Step-by-step explanation:

Income Taxes are allocated to each of the following EXCEPT:

1. a. Balance sheet adjustments
2. b. Continuing operations
3. c. Prior period adjustments
4. d. Discontinued operations

Income taxes are not allocated to balance sheet adjustments because income taxes are not associated with changes in assets, liabilities, or equity. Instead, income taxes are allocated to continuing operations, prior period adjustments, and discontinued operations depending on the circumstances and accounting rules.