if false, change the incorrect words into correct words PROBLEM 1: TRUE OR FALSE 1. The government uses tax laws to raise tax revenues and to implement fiscal policy. 2. The income tax expense reported in the income statement may be different from the tax due reported in the income tax return. 3. Permanent differences do not affect both the financial statements and the income tax returns in future periods. 4. Timing differences result to temporary differences. 5. Rent received in advance is usually taxed after it is recognized as revenue under financial reporting. 6. Net operating loss carryforwards can be used to reduce the tax payment in a future period. 7. The reversal of a deferred tax asset increases the income tax expense. 8. The reduction of a deferred tax asset to its realizable value does not affect the income tax expense for the period. 9. According to PAS 12, current tax assets and current tax liabilities are offset if the entity has a legal right of offset. 10. Measuring deferred taxes at the tax rates applicable in their expected reversal periods is an application of intraperiod tax allocation