Income Tax Accounting: Temporary Differences, Deferred Taxes, and Reporting Methods

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Finance - Personal Finance

jake12testoswi Created by 10 mon ago

Cards in this deck(50)

An Income Tax Return is prepared using tax law and regulations from the _____ .

Income Tax Expense is reported on the Income Statement using the _____ basis.

Accounting Income can recognize a revenue or expense amount in a _____ year.

Taxable Income is on the income tax return because of _____ differences.

The first step in calculating Income Tax Expense is to identify _____ differences.

The Income Statement recognizes revenue and expenses using the _____ method.

The Income Tax Return recognizes revenue and expenses using the _____ method.

AI and TI can be different because of _____ differences in recognition.

Temporary Differences arise from a difference between the accounting book value and the _____ of an asset or liability.

Examples of Temporary Difference Accounts include Installment Notes Receivable and _____ Expense Assets.

Total revenue or expense for all years will be the same for both AI and TI, but each year will report _____ amounts.

Temporary Differences create Deferred Tax Assets (DTA) or Deferred Tax _____ to be reported on the balance sheet.

Permanent Differences are caused by transactions that will _____ affect TI or Taxes Payable.

Permanent differences affect only step 1 of our 5-step model to calculate _____ Tax Expense.

An example of Permanent Differences is tax-free interest revenue on _____ bonds.

The compensation associated with restricted stock under a stock award plan is allocated to expense over the _____ period.

Issued Stock refers to the number of shares outstanding plus _____ shares.

Accumulated Other Comprehensive Income might include gains and losses on certain _____ .

Accumulated Other Comprehensive Income is reported in the balance sheet as a component of _____ equity.

The par value of common stock represents the _____ dollar amount assigned to a share of stock.

When stock traded on an active exchange is issued for a machine, an asset is recorded for the _____ value of the stock.

Which of the following transactions decreases retained earnings? _____ dividend, stock dividend, and cash dividend.

Depreciation early in the life of an asset creates a deferred tax _____ .

Subscriptions collected in advance ordinarily create a deferred tax _____ .

Accrued warranty expense ordinarily creates a deferred tax _____ .

The valuation allowance account that is used in conjunction with deferred taxes relates only to deferred tax _____ .

Interest Income on Municipal Bonds causes a _____ difference between taxable income and pretax accounting income.

Permanent differences _____ create Deferred Tax Assets or Deferred Tax Liabilities.

Permanent Differences cause the effective tax rate to be different from the _____ tax rate.

Deferred Tax Liabilities are created when accounting income is _____ than taxable income.

DTL's are generally related to asset accounts on the balance sheet, like receivables and _____ expenses.

Deferred Tax Assets are created when Accounting Income is _____ than Taxable Income.

If Accounting Income is less than Taxable Income, it creates a DTA and Income Tax Expense will be _____ than Income Tax Payable.

Future Deductible amounts create Deferred Tax _____ .

If Accounting Income is greater than Taxable Income, it creates a DTL and Income Tax Expense will be _____ than Income Tax Payable.

DTA's are generally related to liability accounts on the balance sheet like accrued expense/liability for warranties or _____ payable.

You should use balance in relation to differences when the integration of balance with differences is considered, especially _____ .

Straight-line depreciation for financial reporting and accelerated depreciation for tax reporting creates a _____ taxable amount.

Recognizing tax benefits in a loss year due to a net operating loss carry forward requires creating a deferred tax _____ .

Preferred stock is called preferred because it usually has two preferences related to assets at liquidation and _____ .

Accumulated Other Comprehensive Income might include unrealized gains and losses on available-for-sale _____ .

When Treasury shares are sold at a price above cost, paid-in capital is _____ .

Retained Earnings represent a company's _____ net income.

Newspaper Subscriptions create a Deferred Tax _____ .

Prepaid Rent creates a Deferred Tax _____ .

Prepaid Insurance creates a Deferred Tax _____ .

Warranty Expense creates a Deferred Tax _____ .

Advance rent receipts on an operating lease as the lessor create a Deferred Tax _____ .

Straight-line Depreciation for financial reporting creates a Deferred Tax _____ .

Accrued expense for employee vacation days not yet taken creates a Deferred Tax _____ .

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Income Tax Accounting: Temporary Differences, Deferred Taxes, and Reporting Methods

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