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

Q: hen financial income is higher than taxable income and no permanent differences, the company most…

A: Solution Concept Deferred tax asset or deferred tax liabilities shall be recognized when there is…

Q: When is a company allowed to initially recognize the financial statement effects of a tax position?

A: An entity shall initially recognize the financial statement effects of a tax position when it is…

Q: How is sales tax recorded? Is it considered an expense of a business? Why or why not?

A: Most states levy sales taxes on goods and services. Those states differ on what is taxed and for how…

Q: Account for corporate income taxes; explain the effects of these taxes onbefore-tax profits and…

A: Corporate income taxes are taxes paid by companies on their income

Q: Explain how does the company’s effective tax rate calculated.

A: Effective interest rate:   An effective interest rate is the real return on savings account or any…

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: 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: Under IFRS when a change in the tax rates is enacted I.    Companies should record its effect on…

A: Under IFRS, companies report the effect of changes in tax rates on deferred tax accounts in the…

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: evaluate the impact of tax rate changes on a company’s fi nancial statements and ratios;

A: Changes to the income tax rate can significantly impact a company’s financial statements and the…

Q: Property taxes are considered: a. imposed tax revenues. b. derived tax revenues. c. voluntary…

A: Lets understand all the options. Imposed tax revenue is a revenue generated by the government based…

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: How do the tax laws and financial accounting standards differ?

A: Financial Reporting:   Financial reporting is the process of disclosing the financial results of the…

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: 10. The partial worksheet for Sam's Delivery Service follows. Complete the adjusted trial balance…

A: Trial balance means a statement which include all the debit or credit balances of accounts from…

Q: It is a tax on the value of an article increased at each stage of its production or distribution.…

A: Excise tax is a type of indirect tax employed in case of specific goods (eg. fuel, tobacco,…

Q: A reduction in the statutory tax rate would most likely benefi t the company’s:A . income statement…

A: A balance sheet is a financial statement that offers a framework for estimating the return rates and…

Q: Deferred tax liability

A: Correct Answer is :- C Deferred tax Liability.

Q: analyze disclosures relating to deferred tax items and the eff ective tax rate reconciliation,and…

A: Disclosures relating to deferred tax items can provide valuable information to the analysts. But the…

Q: What’s the difference? Explain to Laura how differences between financial reportingstandards and…

A: Accounting income reported in accordance with financial reporting standards and taxable income under…

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: How is tax accounting different from financial accounting?

A: Accounting: It can be defined as the process of summarizing and recording the company’s financial…

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: Which of the following methods is not allowed for tax purposes if FIFO (first in first out) is used…

A: Under FIFO(First in, First Out) method, inventories purchased first are assumed to be sold first.…

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: Financial Assets representing a contractual right to receive cash in the future. Financial Liability…

A: Financial asset, is an asset that gives contractual right to an entity, to receive cash or another…

Q: The following person is not required to file income tax returns. a. A sole trader b. An individual…

A: Tax is a mandatory financial charge that is imposed on individuals, businesses, and organizations by…

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: 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: Instructions: Using the FASB Codification, provide information from the ASC that answers the…

A: A tax position is a person's or an organization's opinion or interpretation of the tax ramifications…

Q: What is deferred tax liability and deferred tax liability in accounting?

A: A deferred tax liability:A deferred tax liability is an income tax obligation that is due for the…

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.