tax

Question 1

how are deferred tax liabilities measured

Answer 1

the total temp differences x the tax rates in effect when the tax differences unwind. non current

Question 2

The asset/liability method of accounting for income taxes requires that deferred income taxes be:

Answer 2

based on the tax rates currently enacted for the future periods in which the temporary differences are expected to reverse.

Question 3

a credit balance in the deferred income taxes account represents?

Answer 3

the tax expense recognized to-date for financial reporting purposes that is expected to be included in taxable income in future years. However, it does not represent an amount “owed” to the federal government at the balance sheet date. All deferred tax assets or liabilities are classified as long term on the balance sheet.

Question 4

a deferred tax liability may result from depreciation of tangible asset? T/F?

Answer 4

True, depreciation creates a temporary difference, which can result in a deferred tax liability. only temporary differences result in a deferred tax assets or a deferred tax liability.

Question 5

all deferred income tax and liabilities are classified on the b/s as non current?

Answer 5

true

Question 6

gross wage include federal tax and fica tax for employer withheld. t/f

Answer 6

true

Question 7

The term “tax position” as used by the FASB refers to which of the following?

Answer 7

“A decision not to file a tax return
“An allocation or a shift of income between jurisdictions
“The characterization of income or a decision to exclude reporting taxable income in a tax return
“A decision to classify a transaction, entity, or other position in a tax return as tax exempt
“An entity’s status, including its status as a pass-through entity or a tax-exempt not-for-profit entity.”