Accounting for Income Taxes Flashcards
General formula =
Taxes (owe now) + differences (owe later) = income statement tax expense
Permanent differences do not affect the;
deferred tax computation
Temporary differences affected the:
deferred tax computation
Method required by GAAP for comprehensive allocation
asset and liability (balance sheet approach)
future tax accounting income > future financial accounting income
deferred tax liability
future tax accounting income < future financial accounting income
deferred tax asset
Arise when the amount of taxes paid in the current period exceeds the amount of income tax expense in the current period
deferred tax assets
Deferred tax assets can be thought of as:
gift certificates
If it is more likely than not that part or all of the deferred tax asset will not be realized, a _____ ______ is recognized
valuation allowance
Valuation allowances are not permitted under:
IFRS
The enacted tax rate (a change) is used for:
deferred taxes
Change in tax laws or rates are recognized in the period of:
change
A change in tax law is a component of:
income from continuing operations
Deferred tax items should be classified based on the classification of the: : for financial reporting
related asset or liability
Deferred tax items not related to an asset or liability should be classified base don the expected _____ ______ of the temporary difference
reversal date
All deferred tax assets and liabilities classified as current/noncurrent must be _____ and presented as _____ amount
offset; one
Tax carrybacks that can be used to reduce taxes due or to receive a refund for a prior period are a tax benefit and should be recognized in the period they:
occur
Tax-exempt interest (municipal; state), life insurance proceeds on officer’s key man policy, life insurance premiums when corporation is beneficiary, nondeductible portion of meal and entertainment expense, dividends received deduction for corporations are:
permanent differences
Allowance for doubtful accounts is a deferred tax:
asset
Unrealized gain on trading securities is a deferred tax:
liability
Accumulated deprecation, excess of tax over F/S, is a deferred tax:
liability
Whenever income is recognized in the financial statement before it is reported as taxable income, a deferred tax _______ should be reported
liability
GAAP does not require intraperiod income tax allocation to:
operating income
