ACC 440 Flashcards

1
Q

Temporary difference

A

Arises when a revenue item is reported for tax purposes in a period before or after it is reported in financial income

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2
Q

Deferred tax assets

A

Result in deductible amounts in the future

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3
Q

Deferred tax liabilities

A

Result in taxable amounts in the future

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4
Q

A revenue is deferred for tax purposes but not financial reporting purposes.

A

Deferred tax liability

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5
Q

An expense is deferred for financial reporting purposes but not for tax purposes

A

Deferred tax liability

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6
Q

Revenues or gains are reported on the income statement now but on the tax return later

A

Deferred tax liability

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7
Q

Expenses are reported on the income statement now but on the tax return later

A

Deferred tax asset

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8
Q

Revenues are reported on the tax return now but on the income statement later

A

Deferred tax asset

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9
Q

Expenses are reported on the tax return now but on the income statement later

A

Deferred tax liability

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10
Q

Operating loss carryback

A

When a company uses a NOL to offset previous taxable income

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11
Q

Operating loss carry forward

A

When a company uses a NOL to offset future taxable income

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12
Q

When a company sells property and leases it back, any gain on the sale should be ___________

A

Deferred and recognised as income over term of the lease

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13
Q

Amortisation of Pension gain/loss

A

(Beg. Bal. AOCI Gain/Loss -
Expected return)/
Remaining service life for all employees

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14
Q

Amortisation of prior service cost

A

AOCI prior service cost/

Remaining service life for prior service amortization

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15
Q

Service cost/ Interest cost JE

A

Dr Annual Pension Expense

Cr PBO

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16
Q

Actual return JE

A

Cr Annual Pension Expense

Dr Plan Assets

17
Q

Expected return

A

Plan assets x expected rate of return

18
Q

Unexpected return JE

A

Dr/Cr Annual Pension Expense

Dr/Cr OCI Pension Gain/Loss

19
Q

Amortization of Prior service cost JE

A

Dr Pension Expense

Cr OCI Prior service cost

20
Q

Amortization of Pension gain/loss JE

A

Dr annual pension expense

Cr OCI Pension gain/loss

21
Q

Actuarial gain/loss, Gain/Loss on PBO

A

Dr/Cr OCI Pension Gain/Loss

Dr/Cr PBO

22
Q

Contributions JE

A

Cr Cash

Dr Plan Assets

23
Q

Benefits Paid JE

A

Dr PBO

Cr Plan Assets

24
Q

Closing entries OCI to AOCI

A

Cr/Dr Pension Expense + JE’s add.
Cr/Dr OCI

Cr/Dr OCI
Cr/Dr AOCI

25
Q

Reporting income and tax on financial statement

A

Pretax financial income

Income tax expense

26
Q

Reporting income and tax on tax return

A

Taxable income

Income taxes payable

27
Q

Direct financing lease

A

Lessor is not a manufacturer or dealer, FV of asset is lessor’s cost

28
Q

Sales type lease

A

Lessor is a dealer, FV of asset is its normal selling price

Typically higher than cost of asset

29
Q

Bargain purchase option

A

The option for the lesser the option to purchase the leases property at a bargain price

30
Q

An accrued receivable reported for financial reporting but not for tax purposes would cause a ________

A

Decrease in deferred tax liability

31
Q

Difference between a temporary and permanent difference

A

Temporary differences reverse themselves in subsequent accounting periods

32
Q

Revenues are taxable after they are recognised in financial income

A

Deferred tax liability

33
Q

Expenses are deductible after they are recognised in financial income

A

Deferred tax asset

34
Q

Revenues are taxable before they are recognised in financial income

A

Deferred tax asset

35
Q

Expenses are deductible before they are recognised in financial income

A

Deferred tax liability