Which of the following statements is NOT correct? O A. Taxable income and accounting profit may differ due to differences between the recognition of revenue and expenses for tax and accounting purposes, B. Deferred tax assets must be assessed for the probability of their recovery. Creation of a deferred tax asset or liability occurs only if it reverses at some future date. C. Deferred tax assets and liabilities may arise due to temporary differences between accounting profit and taxable income. D. Doferred tax liabilities may arise due to permanent differences between accounting profit and taxable income.

Which of the following statements is NOT correct? O A. Taxable income and accounting profit may differ due to differences between the recognition of revenue and expenses for tax and accounting purposes, B. Deferred tax assets must be assessed for the probability of their recovery. Creation of a deferred tax asset or liability occurs only if it reverses at some future date. C. Deferred tax assets and liabilities may arise due to temporary differences between accounting profit and taxable income. D. Doferred tax liabilities may arise due to permanent differences between accounting profit and taxable income.

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter17: Corporations: Introduction And Operating Rules

Section: Chapter Questions

Problem 18DQ

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The definition of gross income in the tax law is: All items specifically listed as income in the tax law All cash payments received for goods provided and services performed All income from whatever source derived All income from whatever source derived unless the income is earned illegally
Which of the following is a temporary difference that normally is recognized for accounting purposes before being reported as an expense for tax purposes? Unearned revenue Product warranty costs Depreciation Fines resulting from violations of the law.
Which statement is false?a) Deferred taxes are the product of temporary difference in the recognition ofrevenue and expense for taxable income relative to reported income.b) Deferred taxes arise from the use of the same method of depreciation for tax andreporting purposes.c) Deferred taxes arise when taxes actually paid are less than tax expense reported inthe financial statements.d) Temporary difference causing the recognition of deferred taxes may arise fromthe methods used to account for items such as depreciation, installment sales,leases, and pensions.
When accounting standards require recognition of an expense that is not permitted undertax laws, the result is a:A . deferred tax liability.B . temporary diff erence.C . permanent diff erence.
1. Permanent differences between tax income and financial reporting income results from deferred tax assets resulting from timing differences. items that are allowable deductions for income tax reporting that do not qualify as expenses under GAAP. deferred tax liabilities resulting from timing differences. all of these choices. 2. Operating loss carrybacks will result in tax refunds. deferred tax assets. deferred tax liabilities. all of these choices
What events create permanent differences between accounting income and taxable income? What effect do these events have on the determination of income taxes payable and deferred income taxes? Identify three examples of permanent differences between accounting income and taxable income.
In tax-effect accounting, the temporary differences between the carrying amount and the tax base for assets and liabilities leads to the establishment of deferred tax assets and liabilities in the accounting records. List examples of temporary differences that create: deferred tax assets deferred tax liabilities.
A temporary difference that would not result in a deferred tax asset but not a permanent difference? a. accrual of commission income. b. excess of financial depreciation over tax depreciation. c. interest revenue on government bonds. d. accrued warranty expense.
Title Which of the following is false? (a) Under GAAP, deferred taxes are reported based on the... Description Which of the following is false? (a) Under GAAP, deferred taxes are reported based on the classification of the asset or liability to which it relates. (b) Under IFRS, some potential liabilities are not recognized. (c) Under GAAP, the enacted tax rate is used to measure deferred tax assets and liabilities. (d) Under IFRS, all deferred tax assets and liabilities are classified as non-current.
Which of the following is false? a. Under GAAP, deferred taxes are reported based on the classification of the asset or liability to which it relates. b. Under IFRS, all potential liabilities must be recognized. c. Under GAAP, the enacted tax rate is used to measure deferred tax assets and liabilities. d. Under IFRS, all deferred tax assets and liabilities are classified as non-current.
Temporary differences result in future taxable or deductible amounts when the related asset or liability is recovered or settled. Some differences, though, are not temporary. What events create permanent differences? What effect do these have on the determination of income taxes payable? Of deferred income taxes? Of tax expense?
Deferred tax assets and deferred tax liabilities represent the tax effect of the temporary difference between the financial carrying value of an asset or liability and its tax basis. True or False True False