It is the sum of the amount of in deferred tax liability related to accounting income. a. Tax expense reported in the income statement b. Current tax expense c. Deferred tax expense d. Deferred tax benefit

It is the sum of the amount of in deferred tax liability related to accounting income. a. Tax expense reported in the income statement b. Current tax expense c. Deferred tax expense d. Deferred tax benefit

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: All of the following are reported on the income statement net of tax except DA other comprehensive…

A: The answer is as fallows

Q: t is the change during the year in an entity's deferred tax liability and o O A. Current tax expense…

A: Solution: "Deferred tax expense" is the change during the year in an entity's deferred tax asset and…

Q: Future Tax Deductions A. Result in deferred tax liabilities. B.Rresult in deferred tax assets.…

A: Future tax deductions are the tax expenses that are to be deducted in the future period but were due…

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: current and deferred tax expense

A: Option A is correct because deferred tax expense is recognized if there is a change in the deferred…

Q: nt in a local firm. Your firm is thinking of establishing ethical guidelines for management…

A: Many managers think of ethics as a question of personal scruples, a confidential matter between…

Q: Property taxes are considered: a. imposed tax revenues. b. derived tax revenues. c. voluntary…

A: Lets understand all the options. Imposed tax revenue is a revenue generated by the government based…

Q: For federal income tax purposes, the difference between the total income and total expenses reported…

A: The term income is often used as a synonym for revenues, as both indicate a positive cash flow.…

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: 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: All of the following are reported on the income statement net of tax except Select one: a. irregular…

A: Income statement: The income statement is one of the three primary financial statements used to…

Q: Income tax expense reported on a company’s income statement equals taxes payable, plusthe net…

A: Income statement: The financial statement which reports revenues and expenses from business…

Q: After tax cost of interest deals with the fact that interest is deductible for tax purposes.…

A: Interest expenses are the expenses which are related to borrowings raised by the company. The…

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: 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: the total income tax expense for the current period. b. the prima facie tax on accounting profit…

A: The tax is an expense for the company but becomes a liability when payable.

Concept explainers

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.

Question

. It is the sum of the amount of income tax payable and
deferred tax liability related to accounting income.
a. Tax expense reported in the income statement
b. Current tax expense
c. Deferred tax expense
d. Deferred tax benefit

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

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

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)…
0 How are deferred tax assets and deferred tax liabilities reported in a classified balance sheet?
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?
Can you explain the difference between a deferred tax asset, a tax receivable, and a prepaid tax account?
Briefly explain the concepts of accounting profit, taxable profit, temporary difference, taxable temporary difference, deductible temporary difference, deferred tax assets and deferred tax liability.
For federal income tax purposes, the difference between the total income and total expenses reported by a C corporation may be referred to as what type of income?
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
How are deferred tax assets classified as current or non-current on the balance sheet?
Distinguish between intraperiod tax allocation and interperiod tax allocation (deferred tax accounting). Provide an example of each.
explain how deferred tax liabilities and assets are created and the factors that determine howa company’s deferred tax liabilities and assets should be treated for the purposes of fi nancialanalysis;
Describe when and how a valuation allowance is recorded for deferred tax assets.