I. TRUE OR FALSE.1. The amount of tax expense reported in the income statement represents the amountof tax to be paid to the BIR.2. Income tax expense is the sum ofcurrenttax expense and deferred tax expense(benefit).3. Timingdifferencesincludealltemporarydifferences,butalltimingnotdifferences are temporary differences.4. Nontaxable income results to a temporary difference.5. Income tax expense is increased when a deferred tax liability reverses.

Tax expense is the amount that an individual, company, and any other entity have to be paid to the…

I. TRUE OR FALSE. 1. The amount of tax expense reported in the income statement represents the amount of tax to be paid to the BIR. 2. Income tax expense is the sum of current tax expense and deferred tax expense (benefit). 3. Timing differences are temporary differences. 4. Nontaxable income results to a temporary difference. 5. Income tax expense is increased when a deferred tax liability reverses. differences include all temporary differences, but not all timing

I. TRUE OR FALSE. 1. The amount of tax expense reported in the income statement represents the amount of tax to be paid to the BIR. 2. Income tax expense is the sum of current tax expense and deferred tax expense (benefit). 3. Timing differences are temporary differences. 4. Nontaxable income results to a temporary difference. 5. Income tax expense is increased when a deferred tax liability reverses. differences include all temporary differences, but not all timing

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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1continue.. Listed below are items that are commonly accounted for differently for financial reporting purposes than they are for tax purposes.For each item below, indicate whether it involves: 1. A temporary difference that will result in future deductible amounts and, therefore, will usually give rise to a deferred income tax asset. 2. A temporary difference that will result in future taxable amounts and, therefore, will usually give rise to a deferred income tax liability. 3. A permanent difference. (e) Installment sales of investments are accounted for by the accrual method for financial reporting purposes and the installment method for tax purposes. (f) For some assets, straight-line depreciation is used for both financial reporting purposes and tax purposes, but the assets’ lives are shorter for tax purposes. (g)…
Tax rates other than the current tax rate may be used to calculate the deferred income tax amount for financial statement reporting if O it is probable that a future tax rate change will occur. O it appears likely that a future tax rate will be greater than the current tax rate. O it appears likely that a future tax rate will be less than the current tax rate. O the enacted tax rate is expected to apply in future years.
5. How do you call a deductible temporary difference? a. Current tax asset. b. Deferred tax asset. c. Current tax liability. d. Deferred tax liability.
Which of the following statements is correct? O a. A tax offset can result in a refund if it relates to franking credits. O b. Tax offsets are same as allowable deductions as both reduce assessable income. O c. Any tax offset can increase deductions. O d. Tax offsets are used to reduce your taxable income.
A deferred tax account is classified on the balance sheet as: A net noncurrent amount A net current amount It should never appear on the balance sheet Either a current or a noncurrent liability
Topic: Accounting for Income TaxCan you please help explain tax bases for assets and liabilities under temporary difference (between accounting income and taxation income)? Would be so helpful if you could simplify what tax bases mean. I'm confused why, in the second page, the tax bases are considered 0 and I'm not sure what that means. Thanks!
If the valuation allowance for a deferred tax asset is decreased, there is a(n) ________ to income tax expense, which is a(n) ________ to income tax benefit. Group of answer choices increase; decrease increase; increase decrease; decrease decrease; increase
Title Which of the following is false? (a) Under GAAP, deferred taxes are reported based on the... Description Which of the following is false? (a) Under GAAP, deferred taxes are reported based on the classification of the asset or liability to which it relates. (b) Under IFRS, some potential liabilities are not recognized. (c) Under GAAP, the enacted tax rate is used to measure deferred tax assets and liabilities. (d) Under IFRS, all deferred tax assets and liabilities are classified as non-current.
Of the following temporary differences, which one ordinarily creates a deferred tax asset? O Installment sales for tax reporting. O Fines paid for violation of law. O Prepaid expenses. O Estimated warranty expense.
A temporary difference which would result in a deferred tax liability is a) installment sale included in accounting income at the time of sale but not in tax incomeb) subscription received in advancec) research cost is recognized as expense in accounting income but not in tax incomed) Dividend revenue on equity investment
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Expenditures currently deducted in the tax return but not included with expenses in the income statement until subsequent years create deferred tax liabilities. O True O False