24.1-24.2 Income Taxes Flashcards

1
Q
  • Income tax payable is the income tax …
A

Owed by the company on the basis of taxable income.

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2
Q

*Tax expense - an aggregate of an entity’s …

A

Income tax payable (or recoverable in the case of a tax benefit) and any changes in deferred tax assets and liabilities.

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3
Q
  • Tax base - …
  • Carrying amount - …
A

The amount at which an asset or liability is valued for tax purposes.

The amount at which an asset or liability is valued according to accounting principles.

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4
Q

Tax loss carry forward is a …

A

Taxable loss in the current period that may be used to reduce future taxable income.

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5
Q

The statutory tax rate is the rate …

The effective tax rate is …

A

Imposed by law on taxable income that falls within a given tax bracket.

The percentage of income actually paid by an individual or a company after taking into account tax breaks

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6
Q

Permanent differences are the differences between …

A

Tax and financial reporting of revenue (expenses) that will not be reversed at some future date.

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7
Q

The formula for the reported effective tax rate is thus equal to:

A

Reported effective tax rate = Income tax expense ÷ Pretax income (accounting profit)

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8
Q

Temporary differences are further divided into two categories:

A
  1. Taxable temporary differences
  2. Deductible temporary differences
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9
Q
  1. Taxable temporary differences are temporary differences that …
  2. Deductible temporary differences are temporary differences that …
A

Result in a reduction of or deduction from taxable income in a future period when the balance sheet item is recovered or settled.

Result in a taxable amount in a future period when determining the taxable profit as the balance sheet item is recovered or settled.

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10
Q

Asset:

Carrying amount > tax base =

Carrying amount < tax base =

A

Deferred tax liability

Deferred tax asset

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11
Q

Liabilities:

Carrying amount > tax base =

Carrying amount < tax base =

A

Deferred tax asset

Deferred tax liability

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