Tax rates other than the current tax rate may be used to calculate the deferred income tax amount on the balance sheet if O it is probable that a future tax rate change will occur. O it appears likely that a future tax rate will be greater than the current tax rate. O the future tax rates have been enacted into law. O it appears likely that a future tax rate will be less than the current tax rate.

Tax rates other than the current tax rate may be used to calculate the deferred income tax amount on the balance sheet if O it is probable that a future tax rate change will occur. O it appears likely that a future tax rate will be greater than the current tax rate. O the future tax rates have been enacted into law. O it appears likely that a future tax rate will be less than the current tax rate.

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter3: Taxes On The Financial Statements

Section: Chapter Questions

Problem 46P

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Similar questions

What are FUTA and SUTA taxes? Is there any possible reduction in the FUTA tax rate? If so, what is the reduction, and how is this determined?
Based solely on the definitions in the chapter, is the sales tax a proportional, regressive, or progressive tax? Explain, and state how the tax might be viewed differently.
Tax rates other than the current tax rate may be used to calculate the deferred income tax amount for financial statement reporting if O it is probable that a future tax rate change will occur. O it appears likely that a future tax rate will be greater than the current tax rate. O it appears likely that a future tax rate will be less than the current tax rate. O the enacted tax rate is expected to apply in future years.
Which of the following are true about Deferred Tax Liabilities? (check all that apply) In the future, tax rules require bigger expenses than GAAP Initially, tax rules require smaller expenses than GAAP In the future, tax rules require smaller expenses than GAAP They represent an obligation to make higher tax payments in the future Initially, tax rules require bigger expenses than GAAP
In computing the change in deferred tax accounts, which tax rates are used? A. Current tax rates B. Past years' tax rates O c. Enacted future tax rates O D. Estimated future tax rates
the process of reducing the allowable deduction of interest expense by a certain percentage is called? a) tax arbitrage b) tax minimization c) tax avoidance d) tax limitation
A deferred tax liability/asset is computed using the? either current or expected tax laws, regardless of whether those expected laws have been enacted current tax laws, regardless of expected or enacted future tax laws current tax laws, unless enacted future tax laws are different expected future tax laws, regardless of whether those expected laws have been enacted
In computing the deferred tax asset or liability, which tax rate is used? a. Current tax rate b. Estimated future tax rate c. Enacted future tax rate d. Prior tax rate
Valuation allowances reduce deferred tax liabilities to the amount that is more likely than not to be payable in the future. O True False
A deferred tax liability uses a. Expected future tax law, regardless of whether those expected laws have been enacted b. Current tax laws, unless enacted future tax laws are different c. Either current or expected future tax laws, regardless of whether those expected laws have been enacted. d. The current tax laws, regardless of expected or enacted future tax laws
How might a reduction in future tax rates affect deferred tax assets in a way that reduces current net income?
1. In computing the CURRENT tax asset or CURRENT tax liability, which tax rate is used? a. Current tax rate b. Future enacted tax rate c. Average tax rate d. Effective tax rate 2. In computing the DEFERRED tax asset or liability, which tax rate is used? a. Current tax rate b. Estimated future tax rate c. Enacted future tax rate d. Prior tax rate 3. 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