A temporary difference which would result in a deferred tax liability is a) installment sale included in accounting income at the time of sale but not in tax income b) subscription received in advance c) research cost is recognized as expense in accounting income but not in tax income d) Dividend revenue on equity investment

A temporary difference which would result in a deferred tax liability is a) installment sale included in accounting income at the time of sale but not in tax income b) subscription received in advance c) research cost is recognized as expense in accounting income but not in tax income d) Dividend revenue on equity investment

Name: A temporary difference which would result in a deferred tax liability
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Description: A temporary difference which would result in a deferred tax liability isa) installment sale included in accounting income at the time of sale but not in tax incomeb) subscription received in advancec) research cost is recognized as expense in account

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter3: Taxes On The Financial Statements

Section: Chapter Questions

Problem 8P

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Which of the following is not a cause of a difference between pretax financial income and taxable income in a given period? a. operating loss carryforwards b. permanent differences c. applicable tax rates d. temporary differences
Classify the following items that may cause discrepancy between accounting profit and taxable income, into the following types of differences. Also, provide an explenation why that is their classification. A. Non-deductible expenses B. Non-taxable revenues C. Deductible temporary difference D. Taxable temporary difference Interest earned on investments in tax-exempt government securities. Interest earned on deposits with bank. Excess of profit earned over the profit reported under the installment method for income tax purposes.
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 Liability
1. Which temporary difference would result in a deferred tax asset? a. Tax penalty or surcharge b. Dividend received on share investment c. Excess tax depreciation over accounting depreciation d. Rent received in advance included in taxable income but deferred for financial accounting 2. The deferred tax expense is the a. Increase in deferred tax asset minus the increase in deferred tax liability. b. Increase in deferred tax liability minus the increase in deferred tax asset. c. Increase in deferred tax asset plus the increase in deferred tax liability. d. Decrease in deferred tax asset minus the increase in deferred tax liability.
Classify the following items that may cause discrepancy between accounting profit and taxable income, into the following types of differences. Also, provide an explenation why that is their classification. A. Non-deductible expenses B. Non-taxable revenues C. Deductible temporary difference D. Taxable temporary difference Collections of rental in excess of rent revenue reported during the period. Dividends received by a domestic corporation from a domestic corporation. Increase in fair value of equity investments measured at fair value through profit or loss. Uncollectible accounts expense in excess of accounts written off during the period. Tax depreciation in excess of depreciation for accounting purposes.
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Which of the following is an example of a temporary difference which would result in a deferred tax asset? a. Rent revenue collected in advance included in taxable income before it is included in accounting income b. Investment gains recognized earlier for accounting purposes than for tax purposes c. Use of straight-line method for accounting purposes and an accelerated rate for tax purposes d. Use of a longer depreciation period for accounting purposes than is used for tax purpose
Which of the following is an example of a temporary difference which would result in a deferred tax asset? Investment gains recognized earlier for accounting purposes than for tax purposes Use of a longer depreciation period for accounting purposes than is used for tax purpose Use of straight-line method for accounting purposes and an accelerated rate for tax purposes Rent revenue collected in advance included in taxable income before it is included in accounting income
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
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