Why is taxable income different from accounting income? Because companies use cash basis for both financial and tax reporting Because companies use full accrual for financial reporting and modified cash basis for tax reporting Because companies use modified accrual for both financial and tax reporting Because companies use cash basis for financial reporting and accrual for tax reporting

Because companies use full accrual for financial reporting and modified cash basis for tax reporting

Taxable income of a corporation differs from pretax financial income because of? Only Permanent differences No differences Temporary & Permanent differences Only Temporary differences

Temporary & Permanent differences

The sources of differences between pretax financial income and taxable income in the current year are? No differences Temporary & Permanent differences Only Temporary differences Only Permanent differences

Temporary & Permanent differences

Which of the following differences would result in a deferred tax liability? Warranty expenses - temporary Straight-line depreciation - permanent Accelerated depreciation - temporary Bad debt expenses - permanent

Accelerated depreciation - temporary

Which circumstance causes a temporary difference that results in a deferred tax asset? Company receives rent in advance Company recognizes unrealized holding gains Company begins offering a five-year warranty on all items sold Company accelerates depreciation

Company begins offering a five-year warranty on all items sold

Which circumstance causes a temporary difference that results in a deferred tax liability? Warranty expenses recognized Bad debt expenses recognized Unrealized holding gains on investments held as trading securities Rent received in advance

Unrealized holding gains on investments held as trading securities

Deferred Taxes in Accounting: Temporary Differences and Financial Reporting

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Finance - Personal Finance

georgepetenjk Created by 10 mon ago

Cards in this deck(18)

Why is taxable income different from accounting income?

Taxable income of a corporation differs from pretax financial income because of?

The sources of differences between pretax financial income and taxable income in the current year are?

Temporary difference where revenues/gains are taxable AFTER recognition in financial income is recorded as?

Temporary difference where revenues/gains are taxable BEFORE recognition in financial income is reported as?

Temporary difference where expenses/losses are tax deductible BEFORE recognition in financial income is recorded as?

Temporary difference where expenses/losses are tax deductible AFTER recognition in financial income is recorded as?

Which of the following differences would result in a deferred tax liability?

Which circumstance causes a temporary difference that results in a deferred tax asset?

Which circumstance causes a temporary difference that results in a deferred tax liability?

Deferred tax asset is related to expenses or losses that are tax deductible after they are recognized in financial income & revenues or gains that are taxable before they are recognized in financial income. Which of the following best describes this concept?

Deferred tax liability is related to revenues or gains that are taxable after they are recognized in financial income & expenses or losses that are tax deductible before they are recognized in financial income. Which of the following best describes this concept?

Deferred tax assets are shown as what on the balance sheet?

What does a deferred tax asset represent?

What partial entry should be used to record the temporary difference between income tax expense of $10,000 and income taxes payable of $12,000?

What is a deferred tax asset? (definition, not example)

In 2020, a magazine publisher collects one year in advance for subscription revenue. The company would record in its financial statement for 2020?

In 2020, a company decides to add a 36-month warranty on its new product sales. Warranty costs are tax deductible when claims are settled. In its financial statements for 2020, the company incurs?

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