describe the diff erences between accounting profi t and taxable income, and defi ne key terms,including deferred tax assets, deferred tax liabilities, valuation allowance, taxes payable, andincome tax expense;

describe the diff erences between accounting profi t and taxable income, and defi ne key terms,including deferred tax assets, deferred tax liabilities, valuation allowance, taxes payable, andincome tax expense;

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: Please describe the objectives behind FASB ASC Topic 740, Income Taxes, and the income tax provision…

Q: tax allocation

A: Correct Answer 1 :- D The purpose is to relate the income tax expense to the items which affect the…

Q: Explain the folllowing a- what is Income Taxa compliance b- Are Tax rates influence Income Tax…

A: Income tax compliance refers to the act of following all applicable tax laws and regulations related…

Q: Differentiate the accounting measurement of current tax liability and current tax asset from…

A: Tax is the charges levied by the central and state government on the net income, sale or capital…

Q: temporary difference arises when an element of income is reported for tax purposes in the period:…

A: As per IFRS deferred tax assets and liabilities arises on temporary differences which can either…

Q: An example of an expense classifi cation by function is: A . tax expense.

A: Expenses in the Income Statement are classified into two types: Expense by nature Expense by…

Q: resident of the Republic may pay tax

A: A resident of South Africa is liable to pay tax to SARS on his/her income across the world.

Q: Which of the following tax accounting methods least likely defers payment of taxes? Spread Out…

A: Spready Out method: Under this method revenue is recognised over a period of time. Lets make an…

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: How are deferred tax assets and deferred tax liabilities reported in a classified balance sheet?

Q: Statement 1: Life insurance premiums shall be reported as a deductible expense for financial…

A: Tax is the liability that person owes to the government.

Q: added to the financial income in computing for the taxable income?

A: First option is wrong because the unrealizable gains from trading securities is to be deducted from…

Q: For each item below, indicate whether it involves: 1. 2. 3. Use the appropriate number to indicate…

A: A deferred tax asset is a business tax credit for future taxes, and a deferred tax liability means…

Q: Discuss how the provision for income taxes is computed and reflected in interim financial…

A: Interim financial statements are abbreviated financial reports that are prepared and issued at…

Q: Taxable income is a tax accounting term and is also referred to as income before taxes true or…

A: Tax Accounting is a distinct branch of accounting dedicated to managing tax-related aspects for…

Q: Additional disclosures are required pertaining to the income tax expense reported in the income…

A: The company must disclose all additional information regarding the income tax expenses reported in…

Q: What is the taxable base for federal income taxes? a. Gross income b. Net worth c. Total assets d.…

A: Taxable base is the amount on which income taxes are calculated by applying the applicable rate.

Q: Deferred tax liability

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

Q: problem 28 ... Briefly explain the concepts of accounting profit, taxable profit, temporary…

A: Accounting Concept There are different types of concepts which are related in the accounts helps to…

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: It is a kind of withholding tax which is prescribed on certain income payments and is creditable…

A: The question is related to the taxation.

Q: Explain how deferred tax assets and deferred tax liabilities are reported in a classified balance…

A: When the Income Tax Expense account is more than the Income Tax Payable account, this difference is…

Q: Explain the difference between tax reliefs and tax credits

A: Taxes are mandatory payments placed on individuals or businesses by a government agency, whether…

Q: Describe the presentation of deferred income taxes in financial statements.

A: Deferred tax asset: The deferred tax asset is the excess, overpaid, or paid in advance expenses.…

Q: How are deferred tax assets and deferred tax liabilities reported on the statement of financial…

A: Deferred tax accounts has to be reported on the balance sheet of a business. It must be classified…

Q: The amount of tax assessed by the ATO based on the entity's operations for the period will be…

A: Income taxes are amount or dues which is payable by business or individual on amount of income…

Q: temporary difference Interest earned on investments in tax-exempt government securities. Interest…

A: Nondeductible expenses refer to those expenses which a company can subtract from its income in order…

Q: A purpose of an adjustment to income is to (option: a.reduce gross income? b. help determine gross…

A: The purposes of adjustments to income in the context of U.S. taxation are as follows:Purpose of an…

Q: his is an item in the balance sheet relating to the unpaid portion of an income already taxed.…

A: Answer: Balance sheet consists of assets and liabilities as part of financials.

Question

describe the diff erences between accounting profi t and taxable income, and defi ne key terms,
including deferred tax assets, deferred tax liabilities, valuation allowance, taxes payable, and
income tax expense;

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.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps with 4 images

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

pls answer thanks.
What are some of the reasons that the components ofincome tax expense should be disclosed and a reconciliationbetween the effective tax rate and the statutory taxrate be provided?
True or false: Income tax expense may be disclosed either on the income statement or in the notes to the financial statements.
Briefly describe some of the similarities and differences between GAAP and IFRS with respect to income tax accounting
Sales tax payable, accounts payable, payroll liabilities and unearned revenue are all examples of: Group of answer choices long-term liabilities unknown liabilities current assets current liabilities
Which of the following is deducted from the financial income in computing for the taxable income? Excess of accounting depreciation from the allowed tax deduction Donations received during the year Penalties paid for late filing of tax returns Unrealized losses from FA@FVTOCI
Do the liabilities and assets that are generated by using the 'balance sheet method' of accounting for tax appear to be consistent with the definition and recognition criteria of assets and liabilities promulgated within the Conceptual Framework?
How have the recent revenue recognition standards affected the book/ tax accounting
Which cost flow assumption must be used for financial reporting if it is also used for tax reporting? Multiple Choice LIFO. FIFO. Weighted-average. Any assumption can be used regardless of the tax reporting.
distinguish between temporary and permanent diff erences in pre-tax accounting incomeand taxable income;
How are deffered tax adjustments recorderd in the profit and loss account?
Justification for the method of determining periodic deferred tax expense is based on the concept of? Cost Principle Going Concern Assumption Conservatism Matching Principle