Question 6 A net operating loss (NOL) carryforward creates: A - a deferred tax liability that should be classified as current liability B- a deferred tax asset that represents future tax benefit that can offset future taxable income O A O B
Q: Carry-forward tax losses create: a. A deductible temporary difference and therefore a deferred tax…
A: Tax loss carryovers refer to tax losses that a company incurs in a tax year that it can't use to…
Q: Deferred tax assets and deferred tax liabilities represent the tax effect of the temporary…
A: Temporary differences are those differences which are there in between carrying value of asset or…
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: Question 11: Which statement regarding the calculation of taxes is accurate?
A: Q 11 Correct answer is Option D Reason - Because the tax are computed on net income after deducting…
Q: Which of the following cases would result in a Deferred Tax Liability? I – CA of Asset > TB of Asset…
A: Solution: following cases would result in a Deferred Tax Liability as they will create future…
Q: Question 4 Rent collected in advance results in deferred tax assets. O True O False
A: Deferred tax assets are those taxes that are already paid but are yet to be recognized in the near…
Q: taxable income
A: Income tax is payable by every person that crosses the tax-exempted threshold. However, various…
Q: The entry to recognize that a portion of a deferred tax asset would more likely than not be not…
A: Income tax actual paid and income tax expenses some time differ because of deferred income…
Q: An unrealized gain from marking an investment to fair value typically creates a deferred tax asset.…
A: Deferred tax accounts are reported as current assets or liabilities or non-current assets or…
Q: A net operating loss occurs when tax-deductible expenses exceed taxable revenues. Tax laws permit…
A: Definition: Net Operating Loss Carryforward: The net operating loss is considered a negative…
Q: Income tax is levied on all of the following taxable items except: O Wages O Interest and dividends…
A: Income tax is levied on Wages, Interest and dividends from moeny invested and Capital gains from…
Q: The basic issue in deciding whether to record a valuation allowance for a deferred tax asset is…
A: A deferred tax asset is something that reduces future taxable income on a company's balance sheet.…
Q: 5) How should companies appropriately account for the tax benefit due to a loss carryforward? ( O…
A: When a company suffers net operating loss in the current year, it can set off this loss against the…
Q: Tax rates other than the current tax rate may be used to calculate the deferred income tax amount on…
A: Taxation is the process by which governments collect money from individuals and businesses to fund…
Q: Which of the following statements regarding the accrual equivalent after-tax return is most likely…
A: Option a: This option is incorrect because, It depends on the tax rate. In some cases, it could be…
Q: Unrealized losses on investments create a deferred tax asset in the period they first arise. O…
A: Meaning: Deferred tax is defined as tax effect due to timing difference i.e. difference between…
Q: Question 8: Which of the following is not a mandatory deduction from gross pay? Answer: A. Federal…
A: Introduction:- Deductions are take out from employees gross pay. Some mandatory payroll tax…
Q: A. For some assets, straight-line depreciation is used for tax purposes while double-declining…
A: “Since you have posted a question with many sub-parts, we will solve three sub-parts for you. To get…
Q: The carry forward periods for losses varies with the type of loss . Briefly describe the carry…
A:
Q: he deferred tax consequence attributable to a deductible temporary difference and operating loss…
A: Solution: Deferred tax assets are created from those temporary differences which are future…
Q: QUESTION 8 Which of the following is not a type of income tax? O a. Ordinary income tax O b. Capital…
A: Income Tax : Income tax is the tax paid by an individual on his/her income. Income tax is charged on…
Q: Income Taxes Payable or refundable + Changes in deferred income taxes = total income tax expense or…
A: Income tax actual paid and income tax expenses some time differ because of deferred income tax.…
Q: Deferred tax assets and deferred tax liabilities represent the tax effect of the temporary…
A: A deferred tax asset represents a financial benefit, while a deferred tax liability indicates a…
Q: Which of the following tax items is of most value in terms of tax savings to a taxpayer? Choose the…
A: Taxable income: It is the gross total income on which the taxes are imposed by the government for a…
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: Question 7: Taxable earnings for Social Security tax are always the same as taxable earnings for…
A: Social security below $25000 no tax need to be paid your combined income is ( Indivual ) between…
Q: laxabie esent a positive adjustment? А. Capital loss carryovers В. Net operating loss deduction C.…
A: Here the question is regarding which is not a positive adjustment in computing the accumulated…
Q: Listed below are items that are commonly accounted for differently for financial reporting purposes…
A: The answer is stated below:
Q: Tax rates other than the current tax rate may be used to calculate the deferred income tax amount…
A: Answer:- Tax rate meaning:- Tax rate is that percentage on which and individual or corporation is…
Q: each of the following items, indicate whether it would ge erence: e of different depreciation…
A: Lets understand the basics. Deferred tax arise when there is temporary difference is arise between…
Q: Question 10 Which of the following is not part of compensation income? Vacation and sick leave pay…
A: Compensation income includes the payment received by the employee in exchange for service provided…
Q: Which of the following taxes are regressive, rather than progressive? A. Federal estate tax B. None…
A: A Regressive Tax is the kind of tax in which the income of the assessee does not make a difference.…
Q: If the valuation allowance for a deferred tax asset is decreased, there is a(n) ________ to income…
A: The objective of the question is to understand the impact of a decrease in the valuation allowance…
Q: The tax rate that is applied against a prepayment penalty is the ______. Group of answer choices a.…
A: Prepayment penalty refers to when a loan is closed within its term period then the banks may charge…
Q: Question 2: Which of the following is the due date for Form 940 when it is submitted without a…
A: Question 2: The deadline to submit Form 940 is January 31. You have until February 10 to file if you…
Q: Question 3. Classify each of the following accounts as (a) asset, (b) liability, or (c) equity.…
A: Assets means resources that the business have. It may be tangible resources or intangible resources.…
Q: A valuation allowance for deferred tax assets Select one: a. Is required when future deductible…
A: A valuation allowance is a counter-account to a deferred tax asset account that reflects the amount…
Q: 3) What is income tax payable? A company's liability, based on profitability, that is paid in…
A: Taxes are the fees charged by the government. Ii is levied on the taxable income of the taxpayers.…
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: Question 6: Which of the following is not a voluntary deduction from gross earnings? Answer: A. O…
A: Paycheck: A paycheck is given by a business to pay a representative for services delivered. It is a…
Q: The key to reducing one's tax liability is to a. reduce taxable income b. reduce gross income
A: Tax liability of an individual can be reduced by lowering its taxable income. After calculating for…
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- QUESTION 4 Which of the following allow a tax filer to legally reduce the amount of tax owed? Select all that apply. O A. The standard deduction. B. Tax returns. C. Tax evasion. D. Tax exemption. E. FICA taxes paid. F. Tax credits. G. Itemized deductions. QUESTION 5 Which of the following best describes taxable income? O A. The sum of your adjusted gross income and earned income tax credit. B. The sum of your wage income, unemployment benefits, and interest. C. The amount of income on which taxes were withheld by your employer. D. The amount of income you have after subtracting allowable deductions and exemptions.Which of the following statements BEST describes an important tax planning opportunity with regard to loss carry overs? Question 5 options: As noncapital loss carry overs have an unlimited carry forward period, only net capital loss carry overs should be used to reduce Taxable Income to zero. As personal tax credits have an unlimited carry forward period, loss carryovers should be used to reduce Taxable Income to nil. Loss carry overs should not be used to reduce Taxable Income to zero as this prevents the application of personal tax credits. Loss carry overs should be used to reduce Taxable Income to zero so that personal tax credits can be applied to trigger a refund of taxes in the year.Using the fundamental principle from IAS 12 Income Tax, explain whether a deferred tax asset or a deferred tax liability should be recognised in relation to the following scenarios. 1. Development costs Development costs of $1000 that are recognised as an asset (i.e. capitalised) and will be amortised to the statement of P/L and OCI. The costs were deducted in determining taxable profit when they were incurred (i.e. when the cash was paid). 2. Trade Receivables Carrying amount of trade receivables is $150. The $150 is net of expected doubtful debts of $50.
- One-half of capital gain is treated as taxable capital gain and one-half of capital loss is deductible as allowable capital loss. Question 11 options: True FalseQUESTION 13 The practice of including the income tax effect of a particular transaction with the transaction itself on the income statement is known as intraperiod tax allocation. True False1 contiune 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)…
- Which of the following causes a temporary difference between taxable and pretax accounting income? A. Investment expenses incurred to generate tax-exempt income. B. MACRS used for depreciating equipment. C. The dividends received deduction. D. Life insurance proceeds received due to the death of an executive.1. Which temporary difference would result in a deferred tax asset? a. Tax penalty or surcharge b. Dividend received on share investment c. Excess tax depreciation over accounting depreciation d. Rent received in advance included in taxable income but deferred for financial accounting 2. The deferred tax expense is the a. Increase in deferred tax asset minus the increase in deferred tax liability. b. Increase in deferred tax liability minus the increase in deferred tax asset. c. Increase in deferred tax asset plus the increase in deferred tax liability. d. Decrease in deferred tax asset minus the increase in deferred tax liability.4 When should a company create a valuation allowance for a deferred tax asset? O When taxable income is greater than reported income O When there is less than a 50% probability that a company will fail to realize a portion of the asset O When there is more than a 50% probability that a company will fail to realize a portion of the asset O When reported income is greater than taxable income W
- Valuation allowances reduce deferred tax liabilities to the amount that is more likely than not to be payable in the future. O True FalseRegarding the calculation of realized Gain or Loss, which of the following are true: O A. If the amount realized exceeds the property's adjusted basis, the result is a realized gain. O B. If the property's adjusted basis exceeds the amount realized, the result is a realized loss. O c. The amount realized from a sale or other disposition of property is the sum of any money received (which includes any debt relief) plus the fair market value of other property received. O D. The fair market value is reduced by selling expenses such as advertising, commissions, and legal fees associated with the sale or other disposition. O E. All of the above are true OF. None of these are true OG. A, B are true OH, B, C, D are true OI. A, B, C are true OJ. B & D are true OK. C & D are trueThe tax base of a liability is a. Its carrying amount b. The amount that will be deductible for tax purposes against any taxable economic benefits that will flow to an entity when it recovers the carrying amount of the asset. c. Its carrying amount, less any amount that will be deductible for tax purposes in respect of that liability in future periods