A reduction in the statutory tax rate would most likely benefi t the company’s:A . income statement and balance sheet.B . income statement but not the balance sheet.C . balance sheet but not the income statement.

Q: hen financial income is higher than taxable income and no permanent differences, the company most…

A: Solution Concept Deferred tax asset or deferred tax liabilities shall be recognized when there is…

Q: tax allocation

A: Correct Answer 1 :- D The purpose is to relate the income tax expense to the items which affect the…

Q: When is a company allowed to initially recognize the financial statement effects of a tax position?

A: An entity shall initially recognize the financial statement effects of a tax position when it is…

Q: Explain how does the company’s effective tax rate calculated.

A: Effective interest rate:   An effective interest rate is the real return on savings account or any…

Q: ince the computation of corporate income tax is based on a certain percentage, as the case may be,…

A: Solution Since the computation of corporate income tax is based on a certain percentage, as the case…

Q: Are there differences between financial reporting standards and income tax rules thatwill not cause…

A: Normally, business follow GAAP in preparing their financial statements in order to arrive at their…

Q: Analysts should treat deferred tax liabilities that are expected to reverse as:A . equity.B .…

A: Option (B)is correct.

Q: Assuming the incomes were eamed during the effectivity of the CREATE law, how much is the correct…

A: CREATE Law:  The Corporate Recovery and Tax Incentives for Enterprises Law is an act established by…

Q: Which statement is incorrect concerning tax assets and liabilities? * . When an entity makes…

A: Deferred tax assets and liabilities is discounted is the incorrect statement from all the above…

Q: he deferred income tax liability: Top of Form Multiple Choice Is recorded whether or not the…

A: Deferred tax asset/liability results from temporary difference between the income tax recorded and…

Q: A deductible temporary difference leads to the payment of:   Select one: A. less tax in the…

A: The question is related to Taxes on Income.There are two types of deferred tax- (i) Deferred tax…

Q: Income tax expense reported on a company’s income statement equals taxes payable, plusthe net…

A: Income statement: The financial statement which reports revenues and expenses from business…

Q: Intra-period tax allocation is the allocation of the total income tax expense to the various…

A: The answer for the True or false question and relevant explanation are presented hereunder : In Tax…

Q: Briefly explain the concepts of accounting profit, taxable profit, temporary difference, taxable…

A: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: analyze disclosures relating to deferred tax items and the eff ective tax rate reconciliation,and…

A: Disclosures relating to deferred tax items can provide valuable information to the analysts. But the…

Q: When DTA reverses, income tax payable is reduced, while when DTL reverses, income tax payable is…

A: Temporary differences are differences between book income and taxable income of the business. These…

Q: explain what a growing balance in the deffered income tax liability is likely to indicate about a…

A: This question deals with the IFRS 12 "Deferred tax" As per IFRS,  When there is temporary taxable…

Q: What’s the difference? Explain to Laura how differences between financial reportingstandards and…

A: Accounting income reported in accordance with financial reporting standards and taxable income under…

Q: g. An increase in the Deferred Tax Liability account on the statement of financial position is…

A: Solution Note Dear student as per the Q&A guideline we are required to answer the first question…

Q: 1. In computing the CURRENT tax asset or CURRENT tax liability, which tax rate is used? a. Current…

A: Hi student Since there are multiple questions, we will answer only first question. If you want…

Q: Which of the following is true in respect of deferred tax liabilities? None of the listed choices…

A: Deferred tax liability is a liability that is created due to a difference is due and payment cycle…

Q: Which of the following methods is not allowed for tax purposes if FIFO (first in first out) is used…

A: Under FIFO(First in, First Out) method, inventories purchased first are assumed to be sold first.…

Q: Assuming it meets the conditions to net assets and liabilities, how will the company report deferred…

A: Under US GAAP, Crystal​ Critters should net off all the deferred tax assets and liabilities into one…

Q: (Identify Temporary or Permanent Differences) Listed below are items that are commonly accounted for…

A: Given information is: We have to identify for the given cases that in which option they pertains to:…

Q: Which of the following is NOT a reason why timing is significant in tax? Group of answer choices…

A: Tax: When any assesse is earned the income from any sources of income which are mentioned in the tax…

Q: 1. Which of the following statements is incorrect regarding deferred taxes? a. Income tax payable…

A: Here asked for multi question as per guidelines we will solve for first question for you.  If you…

Q: sset.    a. TRUE   b. FALSE

A: Solution: True. This is because Income tax benefit will decrease the current ta eapense means tax…

Q: Some accountants believe that deferred taxes should not be recognized for certain temporary…

A: (Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: Which cost flow assumption must be used for financial reporting if it is also used for tax…

A: Financial reporting: Financial reporting is a typical accounting procedure in which financial…

Q: What is deferred tax liability and deferred tax liability in accounting?

A: A deferred tax liability:A deferred tax liability is an income tax obligation that is due for the…

Q: A temporary difference which would result in a deferred tax liability is a) installment sale…

A: Definition: Deferred tax liability:- It is the liability of tax that a business has yet not paid in…

Q: Because income from fixed income assets is taxed at a higher income tax rate than capital gains and…

A: Capital gain is the revenue generated from selling the assets either long term assets and short term…

Q: Briefly explain the concepts of accounting profit, taxable profit, temporary difference, taxable…

A: Accounting is primarily concerned with identifying, recording, measuring, summarizing transactions…

Q: plication? Tax laws imposing business tax Tax implementing rules and regulations that are remedial…

A: Explanation of concept Tax:- A tax is the compulsory payment which is imposed by the government on…

Q: Indicate whether the following statements are true or false. If the statementis false, explain…

A: The Tax Code offers the investors the benefit of tax deductibility on interest that is paid on debt.…

Q: When certain expenditures result in tax credits that directly reduce taxes, the companywill most…

A: Tax credits directly reduces taxes and these are permanent in nature. Hence, there is no deferred…

Q: An excess tax depreciation will result to a deferred tax liability.

A: In many countries, companies maintain two sets of books of accounts for financial and tax purposes.…

Q: Net income after tax is: The difference of financial income and total deferred income tax expense.…

A: Net income is the amount of money earned by an entity after deducting its outlays from the revenues.…

Q: compare a company’s deferred tax items;

A: Taxable income: It is the portion of the income which is used to calculate income tax that is to be…

Q: What is the difference between tax rates and tax rate structures? How does this notion of…

A: Income tax payable is an obligation for the tax payers to the government on the taxable income.…

Q: Which temporary difference would result in a deferred tax asset? a. Tax penalty or surcharge b.…

A: For an assets, the deferred tax asset arise when carrying amount of asset is lower than it's tax…

Q: When accounting standards require an asset to be expensed immediately but tax rulesrequire the item…

A: A deferred tax asset or DTA is recorded on the balance sheet of the company which results from…

Q: Which of the following are true about Deferred Tax Liabilities? (check all that apply) In the…

A: Deferred tax liabilities and deferred tax assets arise when there are timing differences between…

Q: Which of the following results to a deferred tax liability? When the carrying amount of an asset is…

A: Solution: "None of the choices" results to a deferred tax liability. this is because When the…

Q: Nonordinary items resulting in income or loss a. include unusual but not infrequent gains. b.…

A: a. include unusual but not infrequent gains.

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.