Accouting for Income Tax

Question 1

To Determine Income Tax Expense

Answer 1

Asset and liability approach

Question 2

Deferred Tax Liabilities

Answer 2

Temporary taxable differences add to taxable income, making them deferred tax liabilities.

Question 3

Rule 1

Answer 3

All current deferred tax liabilities and assets must be offset and presented as one amount.

Question 4

Rule 2

Answer 4

All noncurrent deferred tax liabilities and assets of a particular tax jurisdiction must be offset and presented as one amount.

Question 5

Current Income Tax

Answer 5

What you owe now. So it is ta

Question 6

Deferred income tax liability

Answer 6

Deferred tax liability balance equals the future enacted tax rate times the future taxable amounts.

Question 7

Noncurrent liability

Answer 7

Noncurrent deferred tax liability because the items causing temporary differences are noncurrent fixed assets.

Question 8

Deferred tax expense

Answer 8

Current period temporary differences times the enacted future tax rate.

Question 9

Current Income Tax Expense

Answer 9

Taxable income x Enacted Rate

Question 10

Current Income Tax liability

Answer 10

Taxable income and current tax rates

Question 11

Current portion of income taxes payable

Answer 11

taxable income x enacted tax rate

Question 12

Gain on sale

Answer 12

It is taxable on a future year.

Question 13

Effective tax date

Answer 13

Income tax expense/pretax income