List the four general categories of adjustments that a corporation makes to taxable incomes or net loss to compute current E and P. What is the rationale for making these adjustment?

Q: Account for corporate income taxes; explain the effects of these taxes onbefore-tax profits and…

A: Corporate income taxes are taxes paid by companies on their income

Q: cases would affect the current assets portion of the balance sheet

A: First option is wrong because when Current Tax Expense > Tax Payments, there is a current…

Q: evaluate the impact of tax rate changes on a company’s fi nancial statements and ratios;

A: Changes to the income tax rate can significantly impact a company’s financial statements and the…

Q: Define the term Corporate taxable income?

A: Definition: A corporate tax is a type of direct tax that is levied by the state on the income of a…

Q: Which of the following refers to the elements of Comprehensive Income?  a) Net Income, Interest…

A: Net income is the excess of sales over all the expenses including interest expense and income taxes.

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: Which of the following cases would affect the noncurrent liabilities portion of the balance sheet?…

A: When Taxable income is greater than the accounting income then deferred tax liability should be…

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: analyze disclosures relating to deferred tax items and the eff ective tax rate reconciliation,and…

A: Disclosures relating to deferred tax items can provide valuable information to the analysts. But the…

Q: How are deferred taxes calculated? What determines if the company has a deferred asset or a deferred…

A: Deferred tax is a fictitious asset or liability that reflects company income taxation on a premise…

Q: Which of the following statements best describes the income tax expense recognised in an entity’s…

A: Solution: Correct answer is = (a) The income tax related to the accounting profit (pre-tax) for the…

Q: st of Oss E

A: Intercompany sales mean that sales are made by one company of the group of companies to the other…

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: Which option is the correct definition of tax base? Select one: a. Tax base is the amount the asset…

A: Explanation: Tax Base is defined as the amount that is attributed to an asset or liability for tax…

Q: Accounting profit is O A. The The profit or loss is for a period determined before deducting in…

A: There are two types of income. One is accounting income, and the other is taxable income. Tax…

Q: he two companies: Sales to Y Sales to others Cost of goods sol Cost of goods sol

A: Intercompany sales mean that sales are made by one company of the group of companies to the other…

Q: How are deffered tax adjustments recorderd in the profit and loss account?

A: The objective of this question is to understand how deferred tax adjustments are recorded in the…

Q: Which of the following differences would result in future taxable amounts? a. Revenues or gains…

A: Revenues or gains that are taxable after they are recognized in financial income. Should be results…

Q: Describe the procedure to incorporate the tax effects of gains (or losses) whenever an asset is…

A: Asset are considered to be capital items as they are held for more than a year and provide economic…

Q: Which of the following items affect taxable income? Select one or more: a. Realized Gains and…

A: Taxable income comprises of various income and expenses, accounting all items concludes the taxable…

Q: describe the diff erences between accounting profi t and taxable income, and defi ne key…

A: The temporary difference between taxes as per accounting income and taxes asper tax regulation is…

Q: Wood Inc., an accrual basis taxpayer, reported the followng results for the current year: Matt, the…

A: Taxable Income - The base of an income tax system is referred to as taxable income. In other words,…

Q: explain how deferred tax liabilities and assets are created and the factors that determine howa…

A: Deferred Tax Liability or Deferred Tax Asset is an integral component of the financial statements.…

Q: Discuss the main reasons why accounting profit of a business has to be adjusted when computing…

A: Accounting profit is the profit earned on account of business operations, it is financial gains…

Q: How will a capital gain

A: Real estate investment trusts (REITs) are a popular way for investors to own income-generating real…

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.