From the course: Finance Foundations: Income Taxes
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How many sets of books does a large company keep?
From the course: Finance Foundations: Income Taxes
How many sets of books does a large company keep?
- [Instructor] Now here's a question you may not have thought of before. How many sets of accounting books does a large company keep? And the answer is not one. A large company keeps three sets of books. First there are the records that are used to prepare the summary reports for outsiders: the financial reports. Second are the detailed internal information sources that are used to make detailed decisions. These internal books are not revealed to outsiders. That's the second set of books. The third set of books are prepared based based on a different set of rules. on a different set of rules. These are the tax books. For tax reporting to governments. So three sets of books. In fact, it's a sign of a sophisticated economy or a sophisticated company that they have three that they have three sets of books. sets of books. A simple company often only has one set of books. The books they use to report their income taxes. The books they use toreport their income taxes. But as a company gets…
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