In relation to accounting for income taxes, which one of the following statements is correct? a. Tax expense is the sum of current tax expense plus deferred tax expense. b. All movements in deferred tax assets and liabilities are recognised in the statement of profit or loss and other comprehensive income. c. Current tax expense is the sum of tax expense plus deferred tax expense. d. Deferred tax liabilities are determined from deductible temporary differenc

In relation to accounting for income taxes, which one of the following statements is correct? a. Tax expense is the sum of current tax expense plus deferred tax expense. b. All movements in deferred tax assets and liabilities are recognised in the statement of profit or loss and other comprehensive income. c. Current tax expense is the sum of tax expense plus deferred tax expense. d. Deferred tax liabilities are determined from deductible temporary differenc

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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The recognition of current tax under AASB 112/IAS 12 Income Taxes is based on the following. a. the total income tax expense for the current period. b. the prima facie tax on accounting profit before tax for the current period. c. the tax on taxable profit of the current period that is due to the taxation authorities including amounts paid during the period and amounts payable or receivable at the end of the period. d. the amount of income tax payable to, or receivable from, the taxation authorities at the end of the current period
What is a valuation allowance for deferred tax assets? Provide two reasons why the valuation allowance would be reversed.
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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)…
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.
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?
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.
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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.
How are deffered tax adjustments recorderd in the profit and loss account?
As a general rule, which of the following is to be included in the annual tax return as an income for the taxable year? * Earned, accrued or received under cash basis of accounting. Earned and received under accrual basis of accounting excluding receivables. Earned including those not yet received under accrual basis of accounting. Earned, accrued or received either under cash or accrual basis of accounting.