What is the difference between a subsidiary and a wholly owned subsidiary?

June 30, 2024 No Comments

A: The difference between a subsidiary and a wholly owned subsidiary is the amount of control held by the parent company. A regular subsidiary company has over 50% of its voting stock (it can be half, plus one share more) controlled by another company, though

What are examples of products and companies that rely on protective tariffs to survive?

June 30, 2024 No Comments

A: Examples of U.S. products that rely on protective tariffs to survive include paper clips, canned tuna, tobacco and sneakers. Paper Clips A single paper clip manufactured and sold in the United States retails for less than a penny. Most paper clips sold in the

What is the difference between AGI (adjusted gross income) and net income?

June 30, 2024 No Comments

A: Adjusted gross income (AGI) is often referred to as “net income,” although the two are not necessarily the same thing. Net income is a catch-all phrase generally meant as “aftertax” income, while AGI is the total taxable income – that is, the taxable amount

What are some common examples of demand shock?

June 30, 2024 No Comments

A: Common examples of demand shocks are interest rate cuts, tax cuts, government stimulus programs, natural disasters, terrorist attacks, wars or stock market crashes. Demand shocks are surprise events that lead to increased or decreased demand for goods or services. They can lead to surging

What are some examples of a value-added tax?

June 30, 2024 No Comments

A: A value-added tax (VAT) is a consumption tax levied on products at every point of sale where value has been added, starting from raw materials and going all the way to final retail purchase. Ultimately, the consumer pays the VAT; buyers at earlier stages

What are some examples of different taxable events?

June 30, 2024 No Comments

A: A taxable event is any event or occurrence that results in a tax liability. All investors or parties that pay taxes experience taxable events. Two examples of taxable events are if an investor receives dividends or realizes capital gains. Although a party should focus

What are the advantages and disadvantages of capitalizing interest for tax purposes?

June 30, 2024 No Comments

A: The advantages and disadvantages of capitalizing interest for tax purposes lie in a company’s ability to manage or manipulate both the period in which the capitalized interest is recognized as an expense on the income statement and by the way in which the capitalized

What are the benefits of R&D (research and development)?

June 30, 2024 No Comments

A: Research and development (R&D) refers to the part of a company’s operations that seeks knowledge to develop, design and enhance that company’s products, services, technologies or processes. Along with creating new and innovative products and adding features to old ones, R&D connects various parts

What are the differences between Chapter 7 and Chapter 13 bankruptcy?

June 30, 2024 No Comments

A: In the United States, the most common kinds of personal bankruptcy filings are under Chapter 7 or Chapter 13 proceedings. The first kind, Chapter 7, is commonly referred to as a personal liquidation and allows the filing party to wipe out significant chunks of

What are the differences between regressive, proportional, and progressive taxes?

June 30, 2024 No Comments

A: Tax systems fall into three main categories within the tax code: regressive, proportional and progressive taxes. Regressive taxes are those that have a greater impact on low-income individuals than high-income earners. A proportional tax, also referred to as a flat tax, impacts low-, middle-

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