Asked by Mourier Macha on May 09, 2024

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A major difference among corporations proprietorships and partnerships is that a corporation's income statement reports income tax expense.

Income Tax Expense

The cost incurred by businesses or individuals due to tax obligations on earned income.

Corporations Proprietorships

Business entities where corporations are legally independent from their owners and proprietorships are owned and run by one individual, with no legal distinction between the owner and the business.

  • Acquire knowledge on the position and portrayal of income tax expense in business financial statements.
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AR
Anahi RiveraMay 09, 2024
Final Answer :
True
Explanation :
This statement is true. Corporations are separate legal entities that pay income taxes on their profits, while sole proprietorships and partnerships do not pay income taxes as separate entities, but rather the owners report the profits and losses on their personal income tax returns. Therefore, only corporations' income statements report income tax expense.