Auto Dealerships - Audit Technique Guide - Uncle Fed's Tax*Board

When an adjustment to a balance sheet account affects taxable income, a typical presentation of
such a result is shown as follows:
Debit
Credit
Credit
Debit
1. Increase Assets = Increase to Taxable Income
2. Increase Liabilities = Decrease to Taxable Income
3. Decrease Assets = Decrease to Taxable Income
4. Decrease Liabilities = Increase to Taxable Income
Debit
Assets
Credit
I Cash D
N Accounts Receivable E
C Inventories C
R Other Current Assets R
E Loans to Stockholders E
A Real Estate Loans A
S Other Investments S
E
E
Debit
Liabilities
Credit
D Accounts Payable I
E Short Term Loans N
C Other Current Liabilities C
R Loans from Stockholders R
E Long Term Loans E
A Other Liabilities A
S
S
E
E
Equities
Retained Earnings
Paid in Capital
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