Ch 8 Taxation

Question 1

Tax for CY & PY NOT PAID is a …………………..

Answer 1

Liability

Question 2

Tax for CY & PY PAID and exceeds the amount due the excess is recognised as a …………………..

Answer 2

Asset

Question 3

Adj relating to PY

A provision for corporations tax is?

Answer 3

An estimate of the liability due to HMRC

Question 4

Is the tax on profit (tax due) (Tax Liability Acct) DR or CR

Answer 4

Credit ^ liability

Question 5

Which IAS relates to Corporation Tax?

Answer 5

IAS12

Question 6

What is an UNDERPROVISION of Corp Tax?

Answer 6

Underprovision is
Under-estimate of the tax expense in the previous year.

Must be added to this years tax charge.

Eg Tax was estimated at £25K but is actually £30K
£5K under estimated

Question 7

What is an OVERPROVISION of Corp Tax?

Answer 7

Overprovision is
Over-estimate of the tax expense in the previous year.

Must be deducted from the current years tax charge.

Eg Tax was estimated at £30K but is actually £25K
£5K over estimated