Tax losses can be viewed as providing: Answer deductible temporary differences, and therefore deferred tax liabilities b.taxable temporary differences, and therefore a current tax liability c.taxable temporary differences, and therefore a current tax refund d.deductible temporary differences, and therefore a deferred tax asset

Tax losses can be viewed as providing: Answer deductible temporary differences, and therefore deferred tax liabilities b.taxable temporary differences, and therefore a current tax liability c.taxable temporary differences, and therefore a current tax refund d.deductible temporary differences, and therefore a deferred tax asset

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter17: Corporations: Introduction And Operating Rules

Section: Chapter Questions

Problem 18DQ

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Which of the following is not a cause of a difference between pretax financial income and taxable income in a given period? a. operating loss carryforwards b. permanent differences c. applicable tax rates d. temporary differences
The definition of gross income in the tax law is: All items specifically listed as income in the tax law All cash payments received for goods provided and services performed All income from whatever source derived All income from whatever source derived unless the income is earned illegally
E. It is the deferred tax consequence attributable to a deductible temporary difference and operating loss carryforward. a. Deferred tax liability b. Deferred tax asset c. Current tax liability d. Current tax asset
Deferred tax assets and deferred tax liabilities represent the tax effect of the temporary difference between the financial carrying value of an asset or liability and its tax basis. True or False True False
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 Drouinun
An unused tax loss will arise when: a. Expenses deductible for tax purposes are less than the taxable income b. Expenses deductible for tax purposes exceeds the taxable income. c. Expenses deductible for tax purposes are equal to the taxable income d. Expenses deductible for tax purposes do not exist.
The basic issue in deciding whether to record a valuation allowance for a deferred tax asset is determining whether it is more likely than not if future taxable income will be sufficient to realize the tax benefit. True or False True False
A purpose of an adjustment to income is to (option: a.reduce gross income? b. help determine gross income? c. reduce tax owed after tax has been determined?). Another purpose of an adjustment to income is to (option: a. help determine adjusted gross income? b. calculate taxable income after agi has been determined? c. be subtracted after agi to help determine taxable income?)
Where the carrying amount of an asset or liability is different from the tax base a ‘temporary difference’ can arise. Identify the correct statement pertaining to a temporary difference. Select one: a. A temporary difference only occur if the carrying amount of an asset or liability is the same as the tax base b. A temporary difference can never be taxable. c. A temporary difference can never be deductible for tax purposes. d. A temporary difference will result in a decrease (increase) in income tax payable (recoverable) in future periods when the carrying amount of the asset or liability is recovered or settled.
When DTA reverses, income tax payable is reduced, while when DTL reverses, income tax payable is increased. TRUE OR FALSE
Justification for the method of determining periodic deferred tax expense is based on the concept of? Cost Principle Going Concern Assumption Conservatism Matching Principle
A deductible temporary difference leads to the payment of: Select one: A. less tax in the future and gives rise to a deferred tax asset. B. less tax in the future and gives rise to a deferred tax liability. C. more tax in the future and gives rise to a deferred tax asset. D. more tax in the future and gives rise to a deferred tax liability.