F6 - M6 - Income Taxes: Part 2

Question 1

An _______ represents some level of uncertainty of the sustainability of a particular tax position by a company.

Answer 1

uncertain tax position

Question 2

U.S. GAAP requires a ________ level of confidence before reflecting a tax benefit in a company’s financial statements.

Answer 2

more-likely-than-not

Question 3

Because the measurement of deferred taxes is based on the applicable tax rate, it requires that a company use the _____ tax rate expected to apply to taxable items (temporary differences) in the periods the taxable item is expected to be paid _________.

Answer 3

enacted ; (liability) or realized (asset).

Question 4

The liability method requires that the _________ be adjusted when the tax rates change.

Answer 4

deferred tax account balance (asset or liability)

Question 5

A change in circumstances that causes a change in judgment about the ability to realize the ____________ in future years (_________) should be recognized in ____________ in the period of the change.

Answer 5

related deferred tax asset; valuation allowance; income from continuing operations

Question 6

Under U.S. GAAP, all ____________ are reported as a non-current amount on the balance sheet.

Answer 6

deferred tax assets and liabilities

Question 7

A __________ occurs when tax-deductible expenses exceed taxable revenues.

Answer 7

net operating loss (NOL)

Question 8

NOLs arising in 2018, 2019, or 2020 tax years can be?

Answer 8

carried back five years

Question 9

A taxpayer can elect to forgo the carryback and just ca

Answer 9

carryforward.

Question 10

NOLs arising in 2021 and beyond cannot be carried back but can be carried ______________.

Answer 10

forward indefinitely.

Question 11

NOLs carried forward to taxable years beginning in 2021 or later are limited to ______ percent of taxable income before the NOL deduction.

Answer 11

80

Question 12

Undistributed earnings of an investee are presumed to be distributed in the future and are a
______________.

Answer 12

temporary difference.

Question 13

The components of a ____________ should be disclosed.

Answer 13

net deferred tax liability or asset

Question 14

Additionally, the amount of _______(or benefit) allocated to continuing operations and the amounts separately allocated to other items must be disclosed.

Answer 14

income tax expense