assumption made for the tax effect method of accounting for a company’s income tax

Q: PLEASE ANSWER ALL QUESTIONS IN BOTH 1 AND 2 PLEASE. 1. Some accountants believe that deferred taxes…

A: Temporary differences are defined as differences between the carrying amount of assets and…

Q: current and deferred tax expense

A: Option A is correct because deferred tax expense is recognized if there is a change in the deferred…

Q: The account that should be credited for the total income tax withheld from employee's earnings is ○…

A: The objective of the question is to identify the correct account that should be credited when the…

Q: What is the main principle of tax-effect accounting as outlined in AASB 112/IAS

A: Answer: According to data - This report discusses the main principle of tax effect accounting and…

Q: The accounting net income of a company are not necessarily the same amount as the net income for tax…

A: The accounting net income of a company are not necessarily the same amount aa the net income for tax…

Q: True or False: The income a U.S. company reports to the IRS (i.e. to calculate taxes), could be…

A: The income in the income statement is different from those the tax authorities choose and pay taxes…

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: After tax cost of interest deals with the fact that interest is deductible for tax purposes.…

A: Interest expenses are the expenses which are related to borrowings raised by the company. The…

Q: As an auditor, you are tasked to audit the income tax liability of Taxpayer Corp. which of the…

A: Permanent differences is difference between the tax expenses and tax payable due to an item that…

Q: What are the two objectives of accounting for income taxes O Deferred Tax Assets Deferred Tax…

A: The answer is as fallows

Q: All of the following represent taxes commonly collected by businesses except: Oa. Employment…

A: All of the following represent taxes are commonly collected by business except Employment Insurance…

Q: Corporations report which of the following in a separate section of the income statement? O Other…

A: The income statement is one of the three major statements reported by corporations that reveal the…

Q: The IRS requires companies that use LIFO for financial statement reporting to also use LIFO to…

A: Why do you think the IRS wants companies to be consistent with the cost-flow assumption they use?…

Q: Intraperiod tax allocation relates income tax expense to the items that affect the amount of tax. O…

A: Income tax is calculated on income of each year in total. Intraperiod means within one period.

Q: True or false: Income tax expense may be disclosed either on the income statement or in the notes to…

A: The total amount of taxes owed to a taxation authority by an individual, corporation, or other…

Q: Why there is a difference among the company tax rate times with the firm’s accounting income?…

A: In accrual accounting, an expense that arises from the recognition of a liability must be measured…

Q: why is income tax expense shown in the income statement different from the income tax paid shown in…

A: Income statement: The financial statement which reports revenues and expenses from business…

Q: Generally accepted accounting principles usually require the use of accrual accounting to “fairly…

A: Net income:   Net income is the amount which is computed by summing up all the revenues received…

Q: If tax laws allow a company to postpone paying taxes on activities reported in the current period’s…

A: Deferred Tax Liability: Deferred Tax Liability can be created upon occurrence of difference…

Q: IV.  Operating loss carrybacks Select one: a.I and III only. b.I and IV only. c.II and III only.…

A: Correct option:-  b. I, III, and IV only. Explanation:-  The reconciliation between actual tax…

Fringe Benefit Tax

Fringe benefits are in addition to the compensation that companies give to their employees. It is an additional benefit above the stated salary. It helps to keep the employees of the firm motivated as sometimes the only salary is not enough to retain the quality employees of the firm. There are different types of fringe benefits. Fringe benefits are given in both private as well as public enterprises.