If you use the "accural" method of accounting should payments for prior years taxes be included as a debit in the current year's P&L statement? E.g. In Feb 2005 a payment was made for a corporation's 2004 taxes for $100K Should that 100K debit be in included in 2004's P&L statement or
2005's?In my circumstance it's a small C corp and we use a P&L statement generated by quickbooks to get a status snapshot of operations It seems to include these types as tax payments in the year they are paid. This causes the P&L statement not to reflect the current years operations (unless you add back the tax payment to the bottom line - net income number).
If this is correct then doesn't this allow corporations a path to manipulate earnings by, for example, underpaying estimated taxes so that the current years final earnings figures are better?
nearly_blind