An entity shall offset a deferred tax asset and deferred tax liability A. When income taxes are levied by the same taxing authority B. Expected future tax law regardless of whether enacted or not C. Under all circumstances D. Choices A and B are correct
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1. An entity shall offset a
A. When income taxes are levied by the same taxing authority
B. Expected future tax law regardless of whether enacted or not
C. Under all circumstances
D. Choices A and B are correct
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- Definitions The FASB has defined several terms in regard to accounting for income taxes. Below are various code letters (for terms) followed by definitions. 1. The deferred tax consequences of future deductible amounts and operating loss carryforwards 2. A difference between the tax basis of an asset or liability and its reported amount in the financial statements that will result in taxable or deductible amounts in future years when the reported amount of the asset or liability is recovered or settled, respectively 3. Temporary difference that results in taxable amounts in future years when the related asset or liability is recovered or settled, respectively 4. The future effects on income taxes, as measured by the applicable enacted tax rate and provisions of the enacted tax low, resulting from temporary differences and operating loss carryforwards at the end of the current year 5. The change during the year in a corporations deferred tax liabilities and assets 6. The deferred tax consequences of future taxable amounts 7. The portion of o deferred tax asset for which it is more likely than not that a tax benefit will not be realized 8. Temporary difference that results in deductible amounts in future years when the related asset or liability is recovered or settled, respectively 9. The sum of income tax payable and deferred tax expense (or benefit) 10. The amount of income taxes paid or payable (or refundable) for the current year 11. An excess of tax deductible expenses over taxable revenues in a year that may be carried forward to reduce taxable income in a future year 12. The excess of taxable revenues over tax deductible expenses and exemptions for the year 13. Income tax expense divided by income before income taxesWhich of the following statements concerning the classification of deferred tax assets and liabilities is true? Multiple Choice A deferred tax asset is classified as noncurrent only if the company expects the future tax benefit to be received more than 12 months from the balance sheet date. All deferred tax assets and liabilities are treated as noncurrent. A deferred tax asset related to a bad debt reserve is classified as current if the related accounts receivable is classified as a current asset. A deferred tax asset related to inventory capitalization is classified as noncurrent only if the company uses a FIFO accounting method and the inventory to which the deferred tax asset relates will not be treated as sold within 12 months from the balance sheet date.Statement 1: Permanent differences result in deferred tax assets and deferred tax liabilities. Statement 2: Deferred tax assets should be reported as current if these will reverse in the next twelve months. Statement 3: If the carrying amount of an asset is higher than the tax base, the difference will result in deferred tax liability. Statement 4: Operating loss carryforward occurs when an entity has a negative taxable income. Statement 5: Rent collected in advance shall be taxable when earned. Which of the statement/s are false?
- 1. What is the total deferred tax liability at December 31, 20x6? 2. What is the total deferred tax asset at December 31, 20x6? 3. What is the current income tax expense for the year ended December 31, 20x6? 4. What is the total income tax expense for 20x6?Please answer ASAP 12. Loss is generally considered a tax relief and can be carried forward to the following trading year and offset against the profit for that year. A company operating in Country A with the following tax loss rules. i. There is no cap on the number of years for which losses may be carried forward. ii. There is no cap is applicable for the first five years of assessment next following the year of assessment in which the taxpayers started a trade, business, or profession. iii. There is no cap available where a taxpayer (whether individual or company) whose gross turnover is below $10,000,000 per annum. iv. The deduction allowed for prior year losses (PYL) is 50 percent of the net income for the respective year. In 2022, ABC Limited, a company registered in Country A, had a trading profit of $3,000,000. The company started business in 1997 and its gross revenue was $15,000,000 for the tax year. Prior year tax losses are $4,000,000. It's loss relief for that year is.…Under IFRS when a change in the tax rates is enacted I. Companies should record its effect on existing deferred tax accounts immediately. II. Companies report the effect of changes in tax rates on deferred tax accounts in the period the new rate becomes effective. III. Companies report the effect of changes in tax rates on deferred tax accounts that arise in future periods when the new tax rates are in effect. Select one: a. Either I, II, or III, depending on how frequently tax rates change in the company’s tax jurisdiction b. II Only c. I Only d. III Only
- Which general principle applies to the reporting of income tax expenses under interim income statement accounting principles A Reporting should not be done unless there are unusual events that occur in the period and are expect to affect the fiscal year tax liability. B Reporting should be based on a prorate share of the previous fiscal year’s taxes C Reporting should be based on an estimate of the effective annual tax rate and tax liability for the full fiscal year. D Reporting should be based on the last year’s effective tax rates and tax liability for the full fiscal year.1. Which of the following statements is incorrect regarding deferred taxes? a. Income tax payable plus or minus the change in deferred income taxes equals total income tax expense. b. The deferred portion of income tax expense is the amount of change in deferred taxes related to the current period. c. In computing income tax expense, a company deducts an increase in a deferred tax liability to income tax payable. d. All of the choices are incorrect. 2. A liability in 2021 is reported for financial reporting purposes but not for tax purposes. When this liability is settled in 2022, a future taxable amount will: a. pretax financial income will exceed taxable income in 2022. b. the Company will record a decrease in a deferred tax liability in 2022. c. total income tax expense for 2022 will exceed current tax expense for 2022. d. will not be affected. 3. Assuming a 35% statutory tax rate applies to all years involved, which of the following situations will give rise to reporting a…Assume that a pretax operating loss was reported for the third quarter of the current year and that prior quarters reported pretax income that was taxed at an effective tax rate of 30%. What are the likely explanations as to why a tax benefit was not recognized on the entire third-quarter loss?
- Under IFRS: a. “probable” is defined as a level of likelihood of at least slightly more than 60%. b. a company should reduce a deferred tax asset when it is likely that some or all of it will not be realized by using a valuation allowance. c. a company considers only positive evidence when determining whether to recognize a deferred tax asset. d. deferred tax assets must be evaluated at the end of each accounting period.Which of the following statements is correct regarding current and deferred tax expense? O A. Deferred tax expense is equal to the change in deferred tax liability or asset from the beginning of the year to the end of the year B. Current tax expense is equal to the income taxes payable on the corporate tax return, assuming no estimated tax payments were made. C. Total tax expense is equal to the current tax expense plus deferred tax expense minus deferred tax benefit during the year O D. All of these statements are correct regarding current and deferred tax expense.13. What is the total deferred tax asset to be presented in the 2021 Statement of Financial Position?14. What is the total income tax expense for the year?15. What is the net income after tax? Please answer in good accounting form. Thank you!