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15.a. Explain the difference between the treatment of prepaid income under the tax law and...

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Accounting

15.a. Explain the difference between the treatment of prepaid income under the tax law and under financial accounting. b. Why are the two treatments so different? c. What problem does this treatment create for taxpayers?" "a. Prepaid income is usually taxable when it is received. This is unlike financial accounting where income is reported as it accrues. b.The concept of wherewithal-to-pay and the desire by the Federal Government to raise tax revenues are the reasons that the tax law does not conform with financial accounting. c.One problem with this system is that taxpayers must often report income before expenses related to the income are incurred. The result is a mismatching of revenue and expenses

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