temporary difference arises when an element of income is reported for tax purposes in the period: a. After it is reported in financial income and before it is reported in financial income. b. After that is reported in financial income. c. Before it is reported in financial income. d. It will have no effect on the taxable amounts.

temporary difference arises when an element of income is reported for tax purposes in the period: a. After it is reported in financial income and before it is reported in financial income. b. After that is reported in financial income. c. Before it is reported in financial income. d. It will have no effect on the taxable amounts.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: e journal entry required to record the tax effect of the revaluation. a. None of answers given b.…

A: Revaluation has been the process of adjusting a fixed asset class book value to its own current…

Q: True or false. A favorable temporary tax - book difference is so named because it causes taxable…

A: Taxable income is that amount of income which is calculated as per tax laws. Accounting income is…

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: Describe the types of temporary differences that cause deferred tax liabilities and determine the…

A: Deferred tax liabilities It is a type of liability that arises due to the difference between the tax…

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: temporary difference that would result in a deferred tax liability is O Excess of tax depreciation…

A: A deferred tax liability represents an obligation to pay taxes in the future. Temporary…

Q: s) Which of the following statements is true about temporary book-tax differences? (N O They are…

A: Temporary book-tax differences refer to the differences that arise between the pretax book income…

Q: List examples of temporary differences that create: deferred tax assets. Deferred tax liability.

A: A deferred tax asset is a balance sheet item that results from an excess or early tax payment. A…

Q: Discontinued operations, and unusual gains and losses are both reported net of tax in the income…

A: Lets understand the basics.Discontinued operation is a operation which is closed by the business. In…

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: 1.The definition of gross income in the tax law is: A. All items specifically listed as income in…

A: "Since you have asked multiple questions, we will solve first question for you. If you want any…

Q: For each item below, indicate whether it involves: 1. 2. 3. Use the appropriate number to indicate…

A: A deferred tax asset is a business tax credit for future taxes, and a deferred tax liability means…

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: 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: Taxable income is a tax accounting term and is also referred to as income before taxes true or…

A: Tax Accounting is a distinct branch of accounting dedicated to managing tax-related aspects for…

Q: Which statement is false? a) Deferred taxes are the product of temporary difference in the…

A: Taxes refers to the amount that is charged by the government to individuals and organizations on the…

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: What are the two objectives of accounting for income taxes O Deferred Tax Assets Deferred Tax…

A: The answer is as fallows

Q: For tax purposes, one of the requirements to recognize income is: A) The transaction does not have…

A: For tax purposes, recognizing income typically involves the realization of income, which means the…

Question

1. A temporary difference arises when an element of income is reported for tax purposes in the period:

a. After it is reported in financial income and before it is reported in financial income.

b. After that is reported in financial income.

c. Before it is reported in financial income.

d. It will have no effect on the taxable amounts.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

1continue.. 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)…
what is the difference between pretax financial income and taxable income? Explain the meaning of temporary and permanent differences. Give at least two unique examples of each
A deferred tax account is classified on the balance sheet as: A net noncurrent amount A net current amount It should never appear on the balance sheet Either a current or a noncurrent liability
Because income from fixed income assets is taxed at a higher income tax rate than capital gains and dividends from equities, there is no reason that one would have fixed income assets in a taxable account over a tax deferred account (True or false)
The tax law refers to gross income, yet the term gross income is not found on Form 1040. Explain.
Expenditures currently deducted in the tax return but not included with expenses in the income statement until subsequent years create deferred tax liabilities. O True O False
20. A temporary difference arises when a revenue item is reported for tax purposes in a period After it is reportedin financial income Before it is reportedin financial income No Yes No No Yes No Yes Yes
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.
1 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)…
If the current tax expense is greater than the total income tax expense during the period, there must be a deferred tax benefit. TRUE OR FALSE
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.
Nonordinary items resulting in income or loss a. include unusual but not infrequent gains. b. are treated the same as ordinary items when calculating the effective tax rate. c. are always treated as a total group when calculating the effective rate for the quarter. d. are always excluded from interim reporting.