Which of the following is a temporary difference classified as arevenue or gain that is taxable after it is recognized in financialincome?a) Subscriptions received in advance.b) Interest received on a municipal obligation.c) Prepaid rent received in advance.d) Sales accounted for on the accrual basis for financial reportingpurposes and on the cash basis for tax purposes.

The correct answer is:d) Sales accounted for on the accrual basis for financial reporting purposes…

Answered: Which of the following is a temporary…

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter5: Deductions For And From Agi

Section: Chapter Questions

Problem 20MCQ

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Which of the following statements best describes the income tax expense recognised in an entity’s income statement according to IAS 12? a. The income tax related to the accounting profit (pre-tax) for the period b. The income tax related to the taxable profit for the period c. The income tax paid in cash during the period d. The product of the applicable tax rate and the taxable profit for the period
For each item listed below, indicate whether it involves a: a. permanent difference. b. temporary difference that will result in future deductible amounts (giving rise to deferred tax assets). c. temporary difference that will result in future taxable amounts (giving rise to deferred tax liabilities). 1. Rent is collected in advance from a tenant. Rent is taxable when received. 2. Warranty costs are accrued at the time of sale for accounting purposes, but are not deductible until paid for income tax purposes. 3. Interest revenue is recorded on municipal bonds. 4. Installment sales are recognized at the point of sale for accounting purposes, but when the cash is received for income tax purposes. 5. A loss contingency is expensed for accounting purposes. The…
Which of the following are permanent differences? (check all that apply) State taxes Depreciation expense Cash advances from customers Warranty expense Tax-free interest income
Eight independent situations are described below. Each involves future deductible amounts and/or future taxable amounts: ($ in millions) Temporary Differences Reported First on: The Income Statement Revenue The Tax Return Expense $29 Revenue Вхрense 1. 2. $29 3. $29 4. $29 5. 6. 7. 8. 24 29 29 29 24 24 19 19 24 29 14 Required: For each situation, determine taxable income, assuming pretax accounting income is $190 million. (Enter'your answers in millions (I.e., 10,000,000 should be entered as 10).) Situations Taxable Income 1 4. 5. 6. 8
When is a receivable recognized for property tax assessments? When is the revenue recognized?
The amount of tax assessed by the ATO based on the entity's operations for the period will be reflected in which account? a. Income tax expense b. Deferred tax asset c. Deferred tax liability d. Income tax payable e. None of the above
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. 2. 3. Use the appropriate number to indicate your answer for each. a. b. C. d. e. f. g. h. i. j. A temporary difference that will result in future deductible amounts and, therefore, will usually give rise to a deferred income tax asset. A temporary difference that will result in future taxable amounts and, therefore, will usually give rise to a deferred income tax liability. A permanent difference. k. The MACRS depreciation system is used for tax purposes, and the straight-line depreciation method is used for financial reporting purposes for some plant assets. A landlord collects some rents in advance. Rents received are taxable in the period when they are received. Expenses are incurred in obtaining tax-exempt income. Costs of guarantees and warranties are estimated and accrued for financial reporting…
describe the diff erences between accounting profi t and taxable income, and defi ne key terms,including deferred tax assets, deferred tax liabilities, valuation allowance, taxes payable, andincome tax expense;
How are deffered tax adjustments recorderd in the profit and loss account?
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.
distinguish between temporary and permanent diff erences in pre-tax accounting incomeand taxable income;
This is not a requisite for business expense to be deductible. Group of answer choices It must be reasonable It must be ordinary and necessary It must be paid during the taxable year The withholding tax otherwise required have been deducted and remitted to the BIR

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