[Captain Awesome]

Okay, I have studied so much I’m starting to get confused and everything’s blurring together. I did REG sim #24 for retained earnings (M2), but when I deducted expenses from revenue to get NI, I only deducted 50% of meals. This turned out to be incorrect and made half my answers wrong.

So please straighten me out. For NI don’t worry about the 50% non-deductible portion of meals because that only applies to tax, not NI?

AUD - 80
BEC - 80
FAR - 82
REG - 82

 

 

 

[vbmer]

Yes, that is right. The 50% meal deduction only applies to tax.

Net income is a very specific financial accounting term that only ever means one thing. It is reconcilable to taxable income, but they are usually not the same.

AUD - 79
BEC - 88
FAR - 89
REG - 80

Manager, Big 4 Corporate Finance, CPA (WA)

[Author]

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