**Question:** A deferred tax account is classified on the balance sheet as:- ○ A net noncurrent amount- ○ A net current amount- ○ It should never appear on the balance sheet- ○ Either a current or a noncurrent liabilityThis question explores how deferred tax accounts are represented on a balance sheet. Understanding classification is vital for accurate financial reporting and analysis.

Answered: A deferred tax account is classified on…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Similar questions

Recognition of tax benefits in the loss year due to a NOL carry back involves: O The establishment of an income tax refund receivable. Only a note to the financial statements. The establishment of a deferred tax liability. O The establishment of a deferred tax asset.
Of the following temporary differences, which one ordinarily creates a deferred tax asset? O Installment sales for tax reporting. O Fines paid for violation of law. O Prepaid expenses. O Estimated warranty expense.
2
The tax law refers to gross income, yet the term gross income is not found on Form 1040. Explain.
Expenditures currently deducted in the tax return but not included with expenses in the income statement until subsequent years create deferred tax liabilities. O True O False
The deductibility of interest on borrowed money is limited to the extent that it was invested to generate an income that is not tax exempt. Question 10 options: True False
What is the accounting treatment for discontinued operations? A : It is reported at its gross amount as an "other revenue or gain" or "other expense or loss". B : It is reported as an "other revenue or gain" or "other expense and loss", net of tax. C : It only needs to be disclosed in the footnotes of the financial statements. D : It may be treated as sales revenue (if it is a gain) and as an operating expense (if it is a loss).
Recognition of tax benefits in a loss year due to a loss carryforward requires A) the establishment of a deferred tax liability. B) only a note to the financial statements. OC) the establishment of an income tax receivable. OD) the establishment of a deferred tax asset.
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
An unused tax loss will arise when: a. Expenses deductible for tax purposes are less than the taxable income b. Expenses deductible for tax purposes exceeds the taxable income. c. Expenses deductible for tax purposes are equal to the taxable income d. Expenses deductible for tax purposes do not exist.
1 contiune Listed below are items that are commonly accounted for differently for financial reporting purposes than they are for tax purposes.For each item below, indicate whether it involves: 1. A temporary difference that will result in future deductible amounts and, therefore, will usually give rise to a deferred income tax asset. 2. A temporary difference that will result in future taxable amounts and, therefore, will usually give rise to a deferred income tax liability. 3. A permanent difference. (e) Installment sales of investments are accounted for by the accrual method for financial reporting purposes and the installment method for tax purposes.(f) For some assets, straight-line depreciation is used for both financial reporting purposes and tax purposes, but the assets’ lives are shorter for tax purposes.(g)…
Valuation allowances reduce deferred tax liabilities to the amount that is more likely than not to be payable in the future. O True False

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A deferred tax account is classified on the balance sheet as: A net noncurrent amount A net current amount O It should never appear on the balance sheet Either a current or a noncurrent liability