Answered: Deferred tax liabilities should be…

Deferred tax liabilities should be treated as equity when:A . they are not expected to reverse.B . the timing of tax payments is uncertain.C . the amount of tax payments is uncertain.

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter14: Taxes On The Financial Statements

Section: Chapter Questions

Problem 49P

See similar textbooks

Related questions

Q: Unrealized los

A: Meaning: Deferred tax is defined as tax effect due to timing difference i.e. difference between…

Q: Please provide help

A: Demand-side economists criticized the income taxation of capital gains because c) they believed that…

Q: Which of the following "is not" a criteria that must be met to deduct business and/or investment…

A: When it comes to determining the deduction of expenses allowed to the taxpayer, there are various…

Q: Deferred taxes result from different methods applied for taxable income and income for financial…

A: Deferred taxes represent temporary differences in income recognition for tax and financial…

Q: e effect of financial distress and taxation on gearing? A. Both constrain gearing B. The…

A: Gearing in accounting means how much is the debt against the equity in the capital structure of the…

Q: Which of the following statements is (are) correct? (x) Part of the administrative burden of a tax…

A: A mortgage is a contract between borrower and a lender that provides the lender the right to take…

Q: Contrast tax evasion and tax avoidance. Which one is illegal, and which one is legal

Q: contingency that need not be disclosed in the financial statements

A: Contingency is the probable obligation or receivable that may arise in future which depends on the…

Q: what is the disadvantage of not providing deferred tax?

A: Deferred tax is an accounting method used to recognize the effect of taxes on the financial…

Q: A company reduces a deferred tax asset by a valuation allowance if it is probable that it will not…

A: The process of figuring out an asset's, investment's, business's, or other financial instrument's…

Q: what is mean by Tax evasion and what reasons the people do this?

A: Tax obligation represents the liability of the taxpayer towards the government for the payment of a…

Q: Regarding taxpayers having a tough time of volume of tax regulations. What does the concept…

A: Substance over form: It is an accounting concept, which means that the business must record those…

Q: Income tax is least likely to impact on the resultant entitlement

A: Entitlement:Distribution or automatic exercise of a contractually or legally granted absolute…

Q: d. either current or expected future tax laws

A: Taxes are the amount of dues or liabilities that need to be paid by the individual to the…

Q: Tax Planning (LO 12.7) Select either "True" or "False" for each of the following statements. Item…

A: a. TrueTax Planning: Utilizing legal strategies to reduce tax obligations is known as tax planning.…

Q: Tax rates other than the current tax rate may be used to calculate the deferred income tax amount on…

A: Taxation is the process by which governments collect money from individuals and businesses to fund…

Q: Explain the main differences between tax evasion and tax avoidance and list the main actions taken…

A: Tax evasion is the use of illegal methods of concealing income or information from the IRS or other…

Q: Unrealized losses on investments create a deferred tax asset in the period they first arise. O…

A: Meaning: Deferred tax is defined as tax effect due to timing difference i.e. difference between…

Q: While earnings on assets held in a Tax Free Savings Account (TFSA) will not be taxed while the…

A: False

Q: why bad debt is not tax allowable

A: Bad debt refers to money owed by a debtor that is unlikely to be collected. It often occurs when a…

Q: Anti-avoidance provisions _______. a.eliminate tax planning by taxpayers. b.are provisions in the…

A: Anti-avoidance provisions are rules or measures put in place by governments or regulatory bodies to…

Q: What is meant by two terms, ‘tax evasion’ and ‘tax avoidance’? Give your answer with examples of…

A: The financial position of the company can be arrived from the income statement prepared by the…

Q: Deferred tax assets and deferred tax liabilities represent the tax effect of the temporary…

A: A deferred tax asset represents a financial benefit, while a deferred tax liability indicates a…

Q: Which of the following statements is / are correct?

A: Refundable tax credits include earned income credit. Non refundable tax credits are those credits…

Q: Which of the following is NOT a reason why timing is significant in tax? Group of answer choices…

A: Tax: When any assesse is earned the income from any sources of income which are mentioned in the tax…

Q: For tax purposes, one of the requirements to recognize income is: A) The transaction does not have…

A: For tax purposes, recognizing income typically involves the realization of income, which means the…

Q: What is the effect on the tax liability of a taxpayer who does not protest an assessmer

A: Deficiency Taxes: It is the amount of tax as per the tax authority which is not paid by the…

Q: Tax rates other than the current tax rate may be used to calculate the deferred income tax amount…

A: Answer:- Tax rate meaning:- Tax rate is that percentage on which and individual or corporation is…

Q: tax assets must be reduced by a valuation allowance if, based on the weight of the evidence, it is…

A: Assets - A resource having economic worth that a person, business, or nation possesses or controls…

Q: If the carrying amount of an asset is higher than the tax base, the difference will result in…

Q: Tax deductions differ from tax credits because: A. deductions affect relative prices, credits do…

A: Tax Deduction:-Tax Deduction means when there is subtraction in the taxable income of a person under…

Q: Of the following temporary differences, which one ordinarily creates a deferred tax asset? O…

A: A deferred tax asset arises when a company has paid taxes in advance or paid more taxes than…

Q: Briefly explain what factors significantly affect tax avoidance

A: Tax avoidance is a mechanism through which a taxpayer takes advantages of the loopholes in the tax…

Q: What Is A Deferred Tax Liability And What Is Its Purpose?

A: Liabilities: The claims creditors have over assets or resources of a company are referred to as…

Question

Deferred tax liabilities should be treated as equity when:
A . they are not expected to reverse.
B . the timing of tax payments is uncertain.
C . the amount of tax payments is uncertain.

Definition Definition Estimated future tax made while preparing accounts. Deferred tax is estimated based on past and present transactions from financial statements. It is not the actual tax that needs to be paid or is refundable from the revenue authority; it is an accounting entry. It is necessary to account for deferred tax due to difference between accounting profits and taxable profits.

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

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 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, finance and related others by exploring similar questions and additional content below.

Similar questions

Analysts should treat deferred tax liabilities that are expected to reverse as:A . equity.B . liabilities.C . neither liabilities nor equity.
Valuation allowances reduce deferred tax liabilities to the amount that is more likely than not to be payable in the future. O True False
1) Non-assessable income does not increase tax liability, but tax-free income increases tax liability- Discuss with example. Need more explanation .
Deferred tax assets and deferred tax liabilities represent the tax effect of the temporary difference between the financial carrying value of an asset or liability and its tax basis. Is this True or False? I think it's True but I'm not sure.
Which of the following are true about Deferred Tax Liabilities? (check all that apply) In the future, tax rules require bigger expenses than GAAP Initially, tax rules require smaller expenses than GAAP In the future, tax rules require smaller expenses than GAAP They represent an obligation to make higher tax payments in the future Initially, tax rules require bigger expenses than GAAP
How might a reduction in future tax rates affect deferred tax assets in a way that reduces current net income?
When DTA reverses, income tax payable is reduced, while when DTL reverses, income tax payable is increased. TRUE OR FALSE
Discuss the difference between “tax evasion”, “tax avoidance”, and “tax planning”.
Unrealized losses on investments create a deferred tax liability in the period they first arise. True or false
TRUE OR FALSE? An excess tax depreciation will result to a deferred tax liability.
A deferred tax liability uses a. Expected future tax law, regardless of whether those expected laws have been enacted b. Current tax laws, unless enacted future tax laws are different c. Either current or expected future tax laws, regardless of whether those expected laws have been enacted. d. The current tax laws, regardless of expected or enacted future tax laws
the process of reducing the allowable deduction of interest expense by a certain percentage is called? a) tax arbitrage b) tax minimization c) tax avoidance d) tax limitation