A company records an unrealized profit on short-term securities. This would result in what type of difference and in what type of deferred income tax? Type of Difference /deferred tax Select one: a.Permanent / Liability B.Temporary / Liability c.Temporary / Asset d.Permanent / Asset
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A company records an unrealized profit on short-term securities. This would result in what type of difference and in what type of deferred income tax? Type of Difference /
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- A company uses the equity method to account for an investment for financial reporting purposes. This would result in what type of difference and in what type of deferred income tax? Oa. Type of Difference Permanent Ob. Ives of Difference Permanent Oc. Ives of Difference Temporary Od. Type of Difference Temporary Deferred Tax Asset Deferred Tax Liability Deferred Tax Asset Deferred Tax LiabilityThe assumption made for the tax effect method of accounting for a company’s income tax is: Select one: A. an accounting balance sheet and a tax balance sheet are the same. B. income tax expense is equal to income tax payable. C. income tax expense is not equal to current tax liability. D. a tax balance sheet is prepared according to accounting standards.analyze disclosures relating to deferred tax items and the eff ective tax rate reconciliation,and explain how information included in these disclosures aff ects a company’s fi nancialstatements and fi nancial ratios;
- 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.…Income tax expense reported on a company’s income statement equals taxes payable, plusthe net increase in:A . deferred tax assets and deferred tax liabilities.B . deferred tax assets, less the net increase in deferred tax liabilities.C . deferred tax liabilities, less the net increase in deferred tax assets.1. Under IFRS companies are required to provide a reconciliation between actual tax expense and the applicable tax rate. The purpose(s) of this reconciliation include I. Making better prediction of future cash flow. II. Predicating future cash flows for operating loss carryforwards. III. Assessing the composition of the net deferred income tax liability. IV. Assessing quality of earnings. Select one: a.I, II, III and IV. b.I, III, and IV only. c.I, II and IV only. d.I and IV only. 2. Under IFRS deferred tax assets are recognized for I. Deductible temporary differences. II. Deductible permanent differences. III. Operating loss carryforwards. IV. Operating loss carrybacks Select one: a.I and III only. b.I and IV only. c.II and III only. d.I, II, and III. 3. In determining whether to adjust a deferred tax asset, a company should Select one: a.pass a recognition threshold, after assuming that it will be audited by taxing authorities. b.take an aggressive approach…
- Sales tax payable, accounts payable, payroll liabilities and unearned revenue are all examples of: Group of answer choices long-term liabilities unknown liabilities current assets current liabilitiesAfter tax cost of interest deals with the fact that interest is deductible for tax purposes. Therefore, the after-tax cost of interest is calculated by, A. Calculating the income tax of a corporation before depreciation B. Comparing interest to net income C. Interest expense times (1- tax rate) D. Interest expense times the tax rateWhich of the following is true of taxable income? Multiple choice question. A company can deduct interest paid on debt when computing taxable income. A company can deduct dividends paid to shareholders when computing taxable income. A company cannot deduct interest paid on debt when computing taxable income.
- How are deferred taxes calculated? What determines if the company has a deferred asset or a deferred liability?1. Which of the following statements is incorrect regarding deferred taxes? a. Income tax payable plus or minus the change in deferred income taxes equals total income tax expense. b. The deferred portion of income tax expense is the amount of change in deferred taxes related to the current period. c. In computing income tax expense, a company deducts an increase in a deferred tax liability to income tax payable. d. All of the choices are incorrect. 2. A liability in 2021 is reported for financial reporting purposes but not for tax purposes. When this liability is settled in 2022, a future taxable amount will: a. pretax financial income will exceed taxable income in 2022. b. the Company will record a decrease in a deferred tax liability in 2022. c. total income tax expense for 2022 will exceed current tax expense for 2022. d. will not be affected. 3. Assuming a 35% statutory tax rate applies to all years involved, which of the following situations will give rise to reporting a…Why do companies choose to accelerate depreciation on their tax return and not on their income statement? a. to avoid paying taxes b. to postpone paying taxes c. to match their GAAP financial statements
