ACC 318 Module Four Assignment

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A22

Definitions The FASB has defined several terms in regard to accounting for income taxes. Below are various code letters (for terms) followed by definitions. Code Letter Term Code Letter Term A. Future deductible amount H Deferred tax consequences B Income tax payable (or refund) I Future taxable amount Operating loss carryback Deferred tax liability D Valuation allowance K Temporary difference E Deferred tax asset Income tax expense (or benefit) F Operating loss carryforward M Deferred tax expense (or benefit) Taxable income Required: Indicate which term belongs with each definition by choosing the correct term. 1. The deferred tax consequences of future deductible amounts and operating loss carryforwards 2. A difference between the tax basis of an asset or liability and its reported amount in the financial statements that will result in taxable or deductible amounts in future years when the reported amount of the asset or liability is recovered or settled, respectively X 3. Temporary…

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20. A temporary difference arises when a revenue item is reported for tax purposes in a period   After it is reportedin financial income Before it is reportedin financial income No Yes No No Yes No Yes Yes

O d. you cannot make changes to these fields QUESTION 7 How are the linked accounts for CPP different from the linked accounts for income tax - O a. CPP has a linked liability account only; income tax has an expense account only Ob. CPP has a linked expense account only; income tax has a liability account only Oc. CPP has both linked liability and expense accounts; income tax has a liability account only d. none of the above QUESTION 8 Creating an Accountant s Copy of your data allows your accountant to

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What events create permanent differences between accounting income and taxable income? What effect do these events have on the determination of income taxes payable and deferred income taxes? Identify three examples of permanent differences between accounting income and taxable income.

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QUESTION 13 The practice of including the income tax effect of a particular transaction with the transaction itself on the income statement is known as intraperiod tax allocation.     True     False

Please Introduction and explanation 1 and 2 question answers both subparts answer no plagiarism please and what is correct option and incorrect option why? Explanation please

Question 4Each of the following is determined according to IFRS exceptSelect one: a.taxable income. b.income for book purposes. c.income for financial reporting purposes. d.income before taxes. Question 5An assumption inherent in a company’s IFRS statement of financial position is that companies recover and settle the assets and liabilities atSelect one: a.the amount that is probable where “probable” means a level of likelihood of at least more than 50%. b.their reported amounts c.the present value of future cash flows. d.their net realizable value. Question 6Machinery was acquired at the beginning of the year. Depreciation recorded during the life of the machinery could result in                   Future                                Future          Taxable Amounts            Deductible AmountsSelect one: a.Yes No b.No Yes c.Yes Yes d.No No

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In computing net business income for income tax purposes, which of the following statements is INCORRECT? Question 3Answer a. Income tax paid is not allowed as a business deduction. b. Depreciation is not allowed as a business deduction. c. Capital cost allowance is not allowed as a business deduction. d. An arbitrary reserve is not allowed as a business deduction.

Which of the following is not a from AGI deduction? A. The exclusion of an item of gross income B. Itemized deductions, if taken C. Standard deduction, if taken D. The qualified business income deduction

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1. The amount of income taxes that relate to financial income subject to tax is reported on the income statement as A. long-term deferred income taxes (credit) C. income tax expense B. current deferred income taxes (debit) D. income tax payable 2. An item that would create a permanent difference in pretax financial and taxable income would be A. using accelerated depreciation for tax purposes & straight line depreciation for book purposes. B. using the percentage of completion method on long-term construction contracts. C. purchasing equipment previously leased with an operating lease in prior years. D. paying fines for violation of laws. 3. Which of the following is the most likely item to result in a deferred tax asset? A. using completed contract method of recognizing construction revenue tax purposes, but using percentage of completion method for financial reporting purposes. B. using accelerated depreciation for tax purposes but straight-line depreciation for accounting purposes.…

Temporary book-tax differences include (mark all that apply) A. Accrued income B. Accrued expenses c. Depreciation on fixed assets D. E. Tax credits F. All of these G. None of these Net operating losses

Question 6 A net operating loss (NOL) carryforward creates: A - a deferred tax liability that should be classified as current liability B- a deferred tax asset that represents future tax benefit that can offset future taxable income O A O B

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