The FASB has defined several terms in regard to accounting for income taxes. Below are various code letters (for terms) followed by definitions. Code Letter Term Code Letter Term A Future deductible amount H Deferred tax consequences Income tax payable (or refund) I Future taxable amount Operating loss carryback Deferred tax liability Valuation allowance Temporary difference Deferred tax asset Income tax expense (or benefit) F Operating loss carryforward Deferred tax expense (or benefit) Taxable income Required: Indicate which term belongs with each definition by choosing the correct term. 1. The deferred tax consequences of future deductible amounts and operating loss carryforwards the financial statements that will result 2. A difference between the tax basis of an asset or liability and its reported amount settled, respectively taxable or deductible amounts in future years when the reported amount of the asset or liability isr 3. Temporary difference that results in taxable amounts in future years when the related asset or liability is recovered or settled, respectively

The FASB has defined several terms in regard to accounting for income taxes. Below are various code letters (for terms) followed by definitions. Code Letter Term Code Letter Term A Future deductible amount H Deferred tax consequences Income tax payable (or refund) I Future taxable amount Operating loss carryback Deferred tax liability Valuation allowance Temporary difference Deferred tax asset Income tax expense (or benefit) F Operating loss carryforward Deferred tax expense (or benefit) Taxable income Required: Indicate which term belongs with each definition by choosing the correct term. 1. The deferred tax consequences of future deductible amounts and operating loss carryforwards the financial statements that will result 2. A difference between the tax basis of an asset or liability and its reported amount settled, respectively taxable or deductible amounts in future years when the reported amount of the asset or liability isr 3. Temporary difference that results in taxable amounts in future years when the related asset or liability is recovered or settled, respectively

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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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.
Which statement regarding the current Form W-4 is accurate? Answer: A. It uses fewer pieces of information than the previous version to determine federal income tax. B. It can be used with either the wage-bracket or the percentage method of determining federal income tax. C. When determining federal income tax using the wage-bracket method, you can refer to the same tax tables associated with the previous version. D. Unlike the previous version, it calculates the number of withholding allowances.
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
i. Compute taxable income for 2018. ii. Compute the deferred taxes at December 31, 2018, that relate to the temporary differences described above. Clearly label them as deferred tax asset or liability.
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)…
Net income after tax is: The difference of financial income and total deferred income tax expense. The difference of taxable income and current income tax expense. The financial income less any current income tax expense add any income tax benefit. Cannot be determined.
How are deferred tax assets and deferred tax liabilities classified and reported in the financial statements?
Access the FASB Accounting Standards Codification at the FASB website (www.fasb.org). Determine the specific citation for accounting for each of the following items: 1. The specific items to which income tax expense is allocated for intraperiod tax allocation. 2. The tax rate used to calculate deferred tax assets and liabilities. 3. The required disclosures in the notes to financial statements for the components of income tax expense.
Deferred tax asset and deferred tax liability are based on futuretax rates while current tax asset and current tax liability arebased on current tax rates True or False