Unit 4 Reading — Tax Accounting vs GAAP

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Listen to the audio recording while you read the text below. Then answer the comprehension questions that follow the text.

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UK male Listen as you read:

Tax Accounting vs GAAP

In the 21st century many laws and regulations have been standardized but there are still some standards which are specific to each country.

If you work in accounting in the US you will have heard of and understand tax accounting, but your European counterpart will have no idea what it is. Unlike a lot of countries where the generally accepted accounting principles (GAAP) is the only method for calculating tax, accountants in America have two options; tax accounting and GAAP.

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Discussion Questions

Should accounting principles be standardized across the world?

How could GAAP be made simpler?

Is it necessary to have two systems for accounting for tax? Why / why not?

Quiz: Reading Comprehension

1. Fixed assets usually make up a significant amount of the depreciation.

	True
	False

2. Net earnings and taxable income are part of the revenue.

	True
	False

3. Accrual basis accounting has to be consistent with the GAAP.

	True
	False

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