Question 1

What is one reason to use the taxes payable method?

Accepted Answer

A) It is a complicated method,but results in the least tax expense. 
B) A company only pays tax once a year under this method. 
C) It results in the best matching for the balance sheet. 
D) It is the least costly method for tax accounting. 
A) It is a complicated method,but results in the least tax expense. 
B) A company only pays tax once a year under this method. 
C) It results in the best matching for the balance sheet. 
D) It is the least costly method for tax accounting.

Question 2

Under the accrual method,what is the current year temporary difference in FY2016?

Accepted Answer

A) 4,500 
B) 30,500 
C) 5,000 
D) 39,500 
A) 4,500 
B) 30,500 
C) 5,000 
D) 39,500

Question 3

Which statement is true?

Accepted Answer

A) IAS 12 states the following: Deferred tax assets and liabilities shall be discounted. 
B) Enterprises are expected to keep very detailed scheduling of the timing of the reversal of each temporary difference. 
C) To permit,but not require discounting would result in deferred tax assets and liabilities which would be comparable between entities. 
D) The rationale for not discounting is based on considerations of costs and benefits as well as comparability among enterprises. 
A) IAS 12 states the following: Deferred tax assets and liabilities shall be discounted. 
B) Enterprises are expected to keep very detailed scheduling of the timing of the reversal of each temporary difference. 
C) To permit,but not require discounting would result in deferred tax assets and liabilities which would be comparable between entities. 
D) The rationale for not discounting is based on considerations of costs and benefits as well as comparability among enterprises.

Question 4

What is the tax expense under the deferral method for FY2017?

Accepted Answer

A) $23,750 
B) $25,500 
C) $27,500 
D) $36,000 
A) $23,750 
B) $25,500 
C) $27,500 
D) $36,000

Question 5

What adjustment is required to the opening deferred taxes as a result of the rate change?

Accepted Answer

A) 40,000 debit 
B) 40,000 credit 
C) 130,000 credit 
D) 190,000 credit 
A) 40,000 debit 
B) 40,000 credit 
C) 130,000 credit 
D) 190,000 credit

Question 6

In the first two years of operations,a company reports taxable income of $115,000 and $165,000,respectively.In the first two years,the tax rates were 38% and 32% respectively.It is now the end of the third year,and the company has a loss of $160,000 for tax purposes.The company carries losses to the earliest year possible.The tax rate is currently 25%.
Required:
a.How much tax was paid in year 1 and year 2?
b.Compute the amount of income tax payable or receivable in the current (third)year.

Accepted Answer

The answer of In the first two years of operations,a...

Question 7

Which accurately describes the purpose of the taxes payable method?

Accepted Answer

A) It represents the amount of income recognized for accounting purposes. 
B) It represents the amount of income recognized for tax purposes. 
C) It calculates tax expense based on the accounting income before tax. 
D) It calculates tax expense based on the amount payable to tax authorities. 
A) It represents the amount of income recognized for accounting purposes. 
B) It represents the amount of income recognized for tax purposes. 
C) It calculates tax expense based on the accounting income before tax. 
D) It calculates tax expense based on the amount payable to tax authorities.

What is one reason to use the taxes payable method?

Under the accrual method,what is the current year temporary difference in FY2016?

Which statement is true?

What is the tax expense under the deferral method for FY2017?

What adjustment is required to the opening deferred taxes as a result of the rate change?

Which accurately describes the purpose of the taxes payable method?

Current Liabilities and Contingencies

Non-Current Financial Liabilities

Equities

Complex Financial Instruments

Earnings Per Share

Pensions and Other Employee Future Benefits

Accounting for Leases

Statement of Cash Flows

Accounting Changes

Filters

Exam 16: Accounting for Income Taxes

What is one reason to use the taxes payable method?

Under the accrual method,what is the current year temporary difference in FY2016?

Which statement is true?

What is the tax expense under the deferral method for FY2017?

What adjustment is required to the opening deferred taxes as a result of the rate change?

Which accurately describes the purpose of the taxes payable method?

Current Liabilities and Contingencies

Non-Current Financial Liabilities

Equities

Complex Financial Instruments

Earnings Per Share

Pensions and Other Employee Future Benefits

Accounting for Leases

Statement of Cash Flows

Accounting Changes

Filters