If an amount is ordinary income to a recipient:O it must also be a capital gainO It may also be included in the recipient's assessable income via a statutory income provision butthe rules about ordinary income will prevail.O It may also be included in the recipient's assessable income via a statutory income provision.O fit is also included in the recipient's assessable income via a statutory income provision thenusually the statutory income provision will prevail.A tax differs from a user charge in a user pays system in that:A user charge is applied arbitrarily in cases of emergency whereas a tax is applied systematically and accordingto predetermined principles.The government is obliged to repay the monies that it raises through a tax.A user charge is applied to a particular good or service supplied by the government.The government is obliged to pay interest on monies that it raises through borrowings.

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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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Similar questions

Which of the following statements is / are correct?1. Some tax credits are refundable.2. Some tax credits are nonrefundable.a. 1 only.b. 2 only.c. Both 1 and 2.d. Neither 1 nor 2.
What is a valuation allowance for deferred tax assets? Provide two reasons why the valuation allowance would be reversed.
For tax purposes, one of the requirements to recognize income is: A) The transaction does not have to be completed. B) The income cannot be tax-exempt. OC) The transaction does not have to have an economic benefit. J D) None of these.
1. cont... 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)…
What is the FICA tax liability status of pretax contributions to a qualified deferred compensation arrangement?
Which of the following accurately describes when a taxpayer may report capital gain/loss transactions directly on Schedule D instead of using Form 8949?
Temporary differences result in future taxable or deductible amounts when the related asset or liability is recovered or settled. Some differences, though, are not temporary. What events create permanent differences? What effect do these have on the determination of income taxes payable? Of deferred income taxes? Of tax expense?
16. Which of the following is NOT correct? a.Tax credits may be refundable or non-refundable. b. Income from capital related transactions is an example of an exempt income for income tax purposes. c.Tax credits are tax previously paid, or an amount used to reduce tax liability if certain conditions are met. d.Tax Relief is income that is not subject to tax.
Why do deferred tax assets or deferred tax liabilities arise? Explain your answer with suitable example. The reason for the deferred tax assets and liabilities have been explained with suitable example. The concepts of temporary difference, taxable temporary difference, deductible temporary differences have been linked to DTA and DTL.
One of the following is not a prerequisite in order that claim against the estate maybe deductible They must be existing against the estate They must be reasonably certain as to amounts They must have been prescribed They must be enforced by the claimants
Which of the following is not a source of support for the realization of a deferred tax asset? Future taxable temporary differences Future taxable income Future deductible temporary differences Future expiration of temporary exemptions
An unused tax loss will arise when: a. Expenses deductible for tax purposes are less than the taxable income b. Expenses deductible for tax purposes exceeds the taxable income. c. Expenses deductible for tax purposes are equal to the taxable income d. Expenses deductible for tax purposes do not exist.

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