Woods Company reports income before taxes in the amount of $975,000. The current tax expense is $375,375 and the effective tax rate is 37%. What is the conservatism ratio for Woods Company?
A) .96
B) .69
C) .93
D) .39
Answer: A
Explanation: A) 375,375 / 37% = 1,014,527; 975,000 / 1,014,527