multiple choice accounting PAS12

PAS 12 a. C. Recognizing deferred tax assets and liabilities results to 214 PROBLEMS PROBLEM 1: MULTIPLE CHOICE 1. In layman's terms, to "defer" means to postpone. Thus, a deferred tax liability a. increases the tax payment in the current period. b. increases the tax payment in a future period. c. decreases the tax payment in the current period. d. decreases the tax payment in a future period. 2. If the change in deferred tax asset exceeds the change in deferred tax liability during the period, the net change is referred to as deferred tax expense. C. current tax benefit. b. deferred tax income. d. deferred tax asset. 3. Entity A reports an income tax expense of 1,000 and a current tax expense of P800 during the period. The difference between these amounts is best described as a. deferred tax expense. c. deferred tax liability. b. deferred tax income. d. deferred tax asset. 4. Entity A computes a current tax expense of $700 using relevant tax laws. If the change in deferred tax assets exceeds the change in deferred tax liabilities during the period by P100, Entity A's income tax expense is P800. c. 700. b. P600 d. none of these 5. Which of the following is not correct regarding the recognition of a deferred tax asset or a deferred tax liability? a. A deferred tax liability will ultimately result to a tax payment in a future period. b. A deferred tax asset is expected to cause a reduction in the tax payment in a future period. a. higher proper matching of items in the financial statements