The entry to recognize that a portion of a deferred tax asset would more likely than not be notutilized would include which of the following line items? ('O A credit to deferred tax assetO A credit to income tax expenseO A credit to a valuation accountO A credit to deferred tax liabilityA

Income tax actual paid and income tax expenses some time differ because of deferred income…

The entry to recognize that a portion of a deferred tax asset would more likely than not be not utilized would include which of the following line items? (' 71 O A credit to deferred tax asset O A credit to income tax expense O A credit to a valuation account O A credit to deferred tax liability

The entry to recognize that a portion of a deferred tax asset would more likely than not be not utilized would include which of the following line items? (' 71 O A credit to deferred tax asset O A credit to income tax expense O A credit to a valuation account O A credit to deferred tax liability

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Recognition of tax benefits in the loss year due to a NOL carry back involves: O The establishment of an income tax refund receivable. Only a note to the financial statements. The establishment of a deferred tax liability. O The establishment of a deferred tax asset.
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
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
Of the following temporary differences, which one ordinarily creates a deferred tax asset? O Installment sales for tax reporting. O Fines paid for violation of law. O Prepaid expenses. O Estimated warranty expense.
A valuation allowance for deferred tax assets Select one: a. Is required when future deductible amounts are expected to be applied against future taxable income. b. Requires evidence that it is more likely than not that none of the deferred tax asset will be realized. c. Is a contra asset account shown on the tax return. d. Is likely to be recognized if a company expects losses in early future years.
16. Which of the following is NOT correct? a.Tax credits may be refundable or non-refundable. b. Income from capital related transactions is an example of an exempt income for income tax purposes. c.Tax credits are tax previously paid, or an amount used to reduce tax liability if certain conditions are met. d.Tax Relief is income that is not subject to tax.
Why do deferred tax assets or deferred tax liabilities arise? Explain your answer with suitable example. The reason for the deferred tax assets and liabilities have been explained with suitable example. The concepts of temporary difference, taxable temporary difference, deductible temporary differences have been linked to DTA and DTL.
Which of the following usually results in an increase in a deferred tax asset? A) Accelerated depreciation for tax reporting and straight-line depreciation for financial reporting. B) Prepaid insurance. C) Subscriptions delivered for which customers had paid in advance. D) None of these answer choices are correct.
For the month of June 2023, patient charges at Southfield Hospital (a not-for-profit hospital) were $2,940,000. Third-party payers were billed $1,900,000. The hospital estimated that contractual adjustments would reduce the amount collected from their-party payers to $1,790,000. Prepare the neccessary journal entry to record the contractual adjustments.
Recognition of tax benefits in a loss year due to a loss carryforward requires A) the establishment of a deferred tax liability. B) only a note to the financial statements. OC) the establishment of an income tax receivable. OD) the establishment of a deferred tax asset.
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.