A company uses the equity method to account for an investment for financial reporting purposes. This would result in what type of difference and in what type of deferred income tax?Oa. Type of DifferencePermanentOb. Ives of DifferencePermanentOc. Ives of DifferenceTemporaryOd. Type of DifferenceTemporaryDeferred TaxAssetDeferred TaxLiabilityDeferred TaxAssetDeferred TaxLiability

Deferred Income Taxes -A liability due to a discrepancy in income recognition between tax rules and…

A company uses the equity method to account for an investment for financial reporting purposes. This would result in what type of difference and in what type of deferred incon Oa. Type of Difference Permanent Ob Ives of Difference Permanent O. Ise of Difference Temporary Od. Type of Difference Temporary Deferred Tax Asset Deferred Tax Liability Deferred Tax Asset Deferred Tax Liability

A company uses the equity method to account for an investment for financial reporting purposes. This would result in what type of difference and in what type of deferred incon Oa. Type of Difference Permanent Ob Ives of Difference Permanent O. Ise of Difference Temporary Od. Type of Difference Temporary Deferred Tax Asset Deferred Tax Liability Deferred Tax Asset Deferred Tax Liability

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter9: Operating Activities

Section: Chapter Questions

Problem 2FIC

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A company records an unrealized profit on short-term securities. This would result in what type of difference and in what type of deferred income tax? Type of Difference /deferred tax Select one: a.Permanent / Liability B.Temporary / Liability c.Temporary / Asset d.Permanent / Asset
Which option is the correct definition of tax base? Select one: a. Tax base is the amount the asset or liability is recorded at in the accounting records. b. Tax base is a comparing the balance sheet derived using accounting rules with balance sheet that would be derived from taxation rules c. Tax base is the recognition of assets and liabilities in the balance sheet based on the differences between accounting and tax values of assets and liabilities. d. Tax base is defined as the amount that is attributed to an asset or liability for tax purposes.
Which cost flow assumption must be used for financial reporting if it is also used for tax reporting? Multiple Choice LIFO. FIFO. Weighted-average. Any assumption can be used regardless of the tax reporting.
Listed below are several terms and phrases associated with income statement presentation and the statement ofcash flows. Pair each item from List A (by letter) with the item from List B that is most appropriately associatedwith it.List A List B_____ 1. Intraperiod tax allocation_____ 2. Comprehensive income_____ 3. Unrealized holding gain oninvestments_____ 4. Operating income_____ 5. A discontinued operation_____ 6. Earnings per share_____ 7. Prior period adjustment_____ 8. Financing activities_____ 9. Operating activities (SCF)_____ 10. Investing activities_____ 11. Direct method_____ 12. Indirect methoda. An other comprehensive income itemb. Starts with net income and works backwards to convert tocashc. Reports the cash effects of each operating activity directly onthe statementd. Correction of a material error of a prior periode. Related to the external financing of the companyf. Associates tax with income statement itemg. Total nonowner change in equityh. Related to the…
analyze disclosures relating to deferred tax items and the eff ective tax rate reconciliation,and explain how information included in these disclosures aff ects a company’s fi nancialstatements and fi nancial ratios;
What is “comprehensive income”? Its composition varies from company to company but may include which items related to available-for-sale investments that are not included in net income?
evaluate the impact of tax rate changes on a company’s fi nancial statements and ratios;
CHOOSE THE LETTER OF CORRECT ANSWER Which one of the following must be adjusted for taxes? *A. Cost of retained earningsB. Cost of common stockC. Cost of preferred stockD. Cost of debt Refers to the cost of holding inventory *A. Carrying costB. Ordering costC. Transaction costD. SpoilageE. Stock-out cost
When transitory earnings are present, which of the following correctly depicts the order used on the income statement? Multiple Choice Income tax expense, income from continuing operations, unusual items, discontinued operations, net income. Income from continuing operations, unusual items, income tax expense, discontinued operations, net income. Income from continuing operations, discontinued operations, income tax expense, net income. Income tax expense, income from continuing operations, discontinued operations, net income.
The term ‘Operating Profit’ means profit before _____ a. Interest b. Tax c. Interest and tax d. Interest or tax
Which item of the income statement represents the taxable income of the firm? EBIT Operating Income EBT CGS EAT
The assumption made for the tax effect method of accounting for a company’s income tax is: Select one: A. an accounting balance sheet and a tax balance sheet are the same. B. income tax expense is equal to income tax payable. C. income tax expense is not equal to current tax liability. D. a tax balance sheet is prepared according to accounting standards.