An expense incurred/used up in 2020 is not paid until 2021. Using the accrual basis of accounting, the expense should be reported on: A. both the 2020 and 2021 Income statements B. the 2020 Income statement C. the 2021 income statement D. neither the 2020 nor 2021 Income statements

An expense incurred/used up in 2020 is not paid until 2021. Using the accrual basis of accounting, the expense should be reported on: A. both the 2020 and 2021 Income statements B. the 2020 Income statement C. the 2021 income statement D. neither the 2020 nor 2021 Income statements

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: In relation to 'retained earnings', AASB 101 mandates the following disclosures: The beginning…

A: Retained earnings is the part of owner's equity. It is the amount of profit retained in the business…

Q: What account is debited when journalizing the payment of payro Salary Expense Payroll Tax Expense…

A: Payroll Payroll is the procedure for paying employees of an organization. It entails gathering the…

Q: Pronghorn Enterprises Ltd., a private company following ASPE earned accounting income before taxes…

A: Calculation of current income tax expenseParticulars$Net profit before tax as per accounts $…

Q: Lance has income from the following sources in 2021: Certificate of Deposit (CD) US savings bond…

A: >Schedule B of Form 1040 is filled in to report the Interest Income and Ordinary dividend.…

Q: Required information Use the following information for the Exercises below. (Algo) [The following…

A: FUTA is a federal tax that funds unemployment benefits for workers who lose their jobs.SUTA is a…

Q: Money paid by a company to help cover needed and unforeseen expenses

A: Insurance are the protection for unseen events. It is a measure used for hedging against the risk.…

Q: Sheridan Inc. reports the following pretax income (loss) for both book and tax purposes. Year 2023…

A: The deferred tax asset is created when the taxes to be paid as per income tax are lower than the…

Q: Assume that both the Parent and Subsidiary adopt 31 December as their financial year-end. Further…

A: Intragroup transactions are transactions that occur between entities in the group. They can be…

Q: Which transaction affects the Other Adjustments Account on an S corporation's Schedule M-2? Taxable…

A: The S corporation is a special type of corporation that transfer its profits and losses to its…

Q: Why should executory contracts be disclosed in the financial statements? Group of answer choices…

A: Executory contracts are contracts under which neither party has performed any of its obligations or…

Q: Required: А. Calculate taxable income for 2020. В. Prepare the journal entry necessary to record…

A: Part A) Calculation of taxable income for 2020 A formulation for the above-

Q: The formula for Adjusted Gross Income (AGI) is: Gross Income - Exclusions Gross Income - Deductions…

A: Adjusted Gross Income (AGI) is a key financial metric used in the United States to determine an…

Q: The balance sheet for Adams Corporation follows: Current assets Long-term assets (net) Total assets…

A: Financial ratios are quantitative metrics used to evaluate and analyze the financial performance,…

Q: Adjusting entry to record the accrual income tax expenses includes a what

Q: For each item listed below, indicate whether it involves a: a. permanent…

A: PLEASE LIKE THE ANSWER, YOUR RESPONSE MATTERS The items should be matched as follows: b 1…

Q: Which of the following accounts would not be involved in preparing the income statement? Group of…

A: Profit and loss : Amount earned or lost on the sale of one or more items is referred to as the…

Q: The Internal Revenue Code contains three general categories of currently deductible expenses…

A: THE CATEGORIES WHICH ARE NOT INCLUDED ARE 1. EXPENSES INCURRED FOR PERSONAL EXPENSES 2. EXPENSES…

Q: For an accrual basis taxpayer, which of the following statements is TRUE regarding prepaid income?…

A: In accrual basis of accounting, when any amount is received against a service which has not yet been…

Q: During the accumulation period, how is the interest credited to an annuity generally taxed in regard…

A: An annuity, in terms of taxation, is straightforward. When individuals receive regular payouts from…

Q: When using the discrete view to prepare interim statements, two exceptions that are permitted deal…

A: A company's financial reports for a period less than a complete fiscal year, often a quarter or six…

Q: Which of the following statements best describes the income tax expense recognised in an entity’s…

A: Solution: Correct answer is = (a) The income tax related to the accounting profit (pre-tax) for the…

Question

An expense incurred/used up in 2020 is not paid until 2021. Using the accrual basis of accounting, the expense should be reported on:

A. both the 2020 and 2021 Income statements
B. the 2020 Income statement
C. the 2021 income statement
D. neither the 2020 nor 2021 Income statements

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

The recognition of current tax under AASB 112/IAS 12 Income Taxes is based on the following. a. the total income tax expense for the current period. b. the prima facie tax on accounting profit before tax for the current period. c. the tax on taxable profit of the current period that is due to the taxation authorities including amounts paid during the period and amounts payable or receivable at the end of the period. d. the amount of income tax payable to, or receivable from, the taxation authorities at the end of the current period
All withdrawals from RRSPs are included in income in the year of withdrawal unless withdrawn under HBP or LLP, or transferred to RRIF. Question 12 options: True False
Explain the conceptual underpinnings of accounting for temporary differences and the four-step method used to calculate income tax expense.
Bb1.
Prepare the journal entries to record income tax expense, deferred income taxes and income taxes payable for 2025.
Then, calculate the Taxable Income for 2021. (Round your answers to the nearest dollar.) Employment income ABIL Taxable capital gain Allowable capital loss (disallowed ABIL) Net taxable capital gains 2021 Net income Capital gains deduction 2016 Net capital loss deducted 2021 Taxable income
True or false: Income tax expense may be disclosed either on the income statement or in the notes to the financial statements.
Which of the two methods of accounting for uncollectible accounts provides for the recognition of the expense at the earlier date?
Novak Inc. reports the following pretax income (loss) for both book and tax purposes. Pretax Year Income (Loss) Tax Rate 2018 20 % 2019 20 % 2020 25 % 2021 25 % $123,000 98,000 (105,000) 110,000 The tax rates listed were all enacted by the beginning of 2018.
Which of the following is not deducted from an employee’s salary? a. FICA taxes.b. Unemployment taxes.c. Income taxes.d. Employee portion of insurance and retirement payments.
The following information has been obtained for Sheridan Corporation. 1. Prior to 2020, taxable income and pretax financial income were identical. 2. Pretax financial income is $1,634,000 in 2020 and $1,359,000 in 2021. On January 1, 2020, equipment costing $1,260,000 is purchased. It is to be depreciated on a straight-line basis over 5 years for tax purposes and over 8 years for financial reporting purposes. (Hint: Use the half-year convention for tax purposes, as discussed in Appendix 11A.) 3. 4. Interest of $57,000 was earned on tax-exempt municipal obligations in 2021. 5. Included in 2021 pretax financial income is a gain on discontinued operations of $195,000, which is fully taxable. 6. The tax rate is 20% for all periods. 7. Taxable income is expected in all future years.
Which of the following items is exempt from including into the assessable income for salaries tax purposes? Select one: a. Leave pay b. Commission c. Compensation for termination of employment not provided in the contract d. End of contract gratuities