Question 1

A company would most likely choose the carryforward option for a net operating loss if the company expected

Accepted Answer

A)  higher tax rates in the future compared to the past. 
B)  lower tax rates in the future compared to the past. 
C)  lower earnings in the future compared to the past. 
D)  higher earnings in the future compared to the past. 
A)  higher tax rates in the future compared to the past. 
B)  lower tax rates in the future compared to the past. 
C)  lower earnings in the future compared to the past. 
D)  higher earnings in the future compared to the past.

Question 2

Smart Services computed pretax financial income of $220,000 for its first year of operations ended December 31,2014.In preparing the income tax return for the year,the tax accountant determined the following differences between 2014 financial income and taxable income:
   The temporary difference is expected to reverse in the following pattern:
   The enacted tax rates for this year and the next three years are as follows:
   Use the provisions of FASB Statement No.109.

Accepted Answer

The answer of Smart Services computed pretax financial income of...

Question 3

All of the following can result in a temporary difference between pretax financial income and taxable income except

Accepted Answer

A)  payment of premiums for life insurance. 
B)  depreciation expense. 
C)  contingent liabilities. 
D)  product warranty costs. 
A)  payment of premiums for life insurance. 
B)  depreciation expense. 
C)  contingent liabilities. 
D)  product warranty costs.

Question 4

The Racing Company had taxable income of $12,000 during 2014.Racing used accelerated depreciation for tax purposes ($3,400)and straight-line depreciation for accounting purposes ($2,000).Assuming Racing had no other temporary differences,what would the company's pretax accounting income be for 2014?

Accepted Answer

A)  $1,400 
B)  $6,600 
C)  $13,400 
D)  $17,400 
A)  $1,400 
B)  $6,600 
C)  $13,400 
D)  $17,400

Question 5

Which of the following arguments is supportive of allocation of income taxes?

Accepted Answer

A)  Future predictions of net income are enhanced when income taxes are allocated. 
B)  Income tax expense computed under interperiod tax allocation is a better predictor of future cash flows than income taxes actually paid. 
C)  Income tax is not an expense;it is a sharing of profits with government. 
D)  Income tax expense based on actual payments is more understandable to users than allocated income taxes. 
A)  Future predictions of net income are enhanced when income taxes are allocated. 
B)  Income tax expense computed under interperiod tax allocation is a better predictor of future cash flows than income taxes actually paid. 
C)  Income tax is not an expense;it is a sharing of profits with government. 
D)  Income tax expense based on actual payments is more understandable to users than allocated income taxes.

Question 6

Bodner Corporation's income statement for the year ended December 31,2014,shows pretax income of $1,000,000.The following items are treated differently on the tax return and in the accounting records:   Assume that Bodner's tax rate for 2014 is 30 percent.What is the amount of income tax payable for 2014?

Accepted Answer

A)  $360,000 
B)  $320,000 
C)  $294,000 
D)  $267,000 
A)  $360,000 
B)  $320,000 
C)  $294,000 
D)  $267,000

Question 7

In computing the change in deferred tax accounts,which of the following tax rates is used?

Accepted Answer

A)  Current tax rate 
B)  Estimated future tax rates 
C)  Enacted future tax rates 
D)  Past years' tax rates 
A)  Current tax rate 
B)  Estimated future tax rates 
C)  Enacted future tax rates 
D)  Past years' tax rates

Question 8

Pretax accounting income is $100,000 and the tax rate is 40%.Included in income is a $20,000 fine levied for pollution violations and other infractions during the year.In the reconciliation of the statutory and effective rate (beginning with the statutory rate),which one of the following amounts would appear?

Accepted Answer

A)  (.08) 
B)  .08 
C)  (.20) 
D)  (.04) 
A)  (.08) 
B)  .08 
C)  (.20) 
D)  (.04)

A company would most likely choose the carryforward option for a net operating loss if the company expected

All of the following can result in a temporary difference between pretax financial income and taxable income except

The Racing Company had taxable income of $12,000 during 2014.Racing used accelerated depreciation for tax purposes ($3,400)and straight-line depreciation for accounting purposes ($2,000).Assuming Racing had no other temporary differences,what would the company's pretax accounting income be for 2014?

Which of the following arguments is supportive of allocation of income taxes?

In computing the change in deferred tax accounts,which of the following tax rates is used?

Financial Reporting

A Review of the Accounting Cycle

The Balance Sheet and Notes to the Financial Statements

The Income Statement

Statement of Cash Flows and Articulation

Earnings Management

The Revenuereceivablescash Cycle

Revenue Recognition

Inventory and Cost of Goods Sold

Investments in Noncurrent Operating Assets-Acquisition

Investments in Noncurrent Operating Assets-Utilization and Retirement

Debt Financing

Equity Financing

Investments in Debt and Equity Securities

Leases

Employee Compensation-Payroll, pensions, Other Compissues

Earnings Per Share

Derivatives, contingencies, business Segments, and Interim Reports

Accounting Changes and Error Corrections

Statement of Cash Flows Revisited

Accounting in a Global Market

Analysis of Financial Statements

Filters

Exam 16: Income Taxes

A company would most likely choose the carryforward option for a net operating loss if the company expected

All of the following can result in a temporary difference between pretax financial income and taxable income except

Which of the following arguments is supportive of allocation of income taxes?

In computing the change in deferred tax accounts,which of the following tax rates is used?

Financial Reporting

A Review of the Accounting Cycle

The Balance Sheet and Notes to the Financial Statements

The Income Statement

Statement of Cash Flows and Articulation

Earnings Management

The Revenuereceivablescash Cycle

Revenue Recognition

Inventory and Cost of Goods Sold

Investments in Noncurrent Operating Assets-Acquisition

Investments in Noncurrent Operating Assets-Utilization and Retirement

Debt Financing

Equity Financing

Investments in Debt and Equity Securities

Leases

Employee Compensation-Payroll, pensions, Other Compissues

Earnings Per Share

Derivatives, contingencies, business Segments, and Interim Reports

Accounting Changes and Error Corrections

Statement of Cash Flows Revisited

Accounting in a Global Market

Analysis of Financial Statements

Filters