Refund of value added taxes in the current year which were erroneouslypaid in a prior year is generallySubject to final income taxIncluded in gross incomeO Not included in gross incomeO Deducted from retained earnings

Refund of value added tax is not a income. It is just refund of amount which was erroneously paid.

Refund of value added taxes in the current year which were errone paid in a prior year is generally Subject to final income tax O Included in gross income O Not included in gross income O Deducted from retained earnings

Refund of value added taxes in the current year which were errone paid in a prior year is generally Subject to final income tax O Included in gross income O Not included in gross income O Deducted from retained earnings

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter18: Accounting For Income Taxes

Section: Chapter Questions

Problem 12GI

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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.

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Refund of value added taxes in the current year which were erroneously
paid in a prior year is generally
Subject to final income tax
Included in gross income
O Not included in gross income
O Deducted from retained earnings

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