lecture 6

Question 1

what happens if the company makes a loss?

Answer 1

no a relief is given instead, and they give back some money In the form of return

Question 2

what is the corporation tax rate

Answer 2

25%

Question 3

when are dividends handed out

Answer 3

on the profit after tax

Question 4

taxable profit vs accounting profit?

Answer 4

Accounting profit is the profit prepared by companies, the government takes this accounting profit as a starting base and additions or deductions are made to give the taxable profit

Question 5

two types of tax?

Answer 5

current: amount payable for the current period
deferred tax: future tax consequences that arise when there are temporary differences

Question 6

what is a deferred tax asset?

Answer 6

when the temporary difference is positive, the carrying amount is less than its tax value.

Question 7

what is a deferred tax liability?

Answer 7

if the temporary difference is negative, the carrying amount is more than its tax value

Question 8

what are the two types of differences?

Answer 8

-temporary difference
-permanent difference:
difference in taxable profit and accounting profit that arise from one period but never reverse