ACC 318 Module Four codification

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39a What is the income that will not be taken into account in the determination of the Financial Profit (Tax Base) and will not be added  to the profit?    a) Commercial Profit  B) Tax Exempt Earnings  NS) Taxable Earnings  D) Disallowable expenses  TO) Legally Accepted Expenses

Question 4Each of the following is determined according to IFRS exceptSelect one: a.taxable income. b.income for book purposes. c.income for financial reporting purposes. d.income before taxes. Question 5An assumption inherent in a company’s IFRS statement of financial position is that companies recover and settle the assets and liabilities atSelect one: a.the amount that is probable where “probable” means a level of likelihood of at least more than 50%. b.their reported amounts c.the present value of future cash flows. d.their net realizable value. Question 6Machinery was acquired at the beginning of the year. Depreciation recorded during the life of the machinery could result in                   Future                                Future          Taxable Amounts            Deductible AmountsSelect one: a.Yes No b.No Yes c.Yes Yes d.No No

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Question 6 A net operating loss (NOL) carryforward creates: A - a deferred tax liability that should be classified as current liability B- a deferred tax asset that represents future tax benefit that can offset future taxable income O A O B

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O d. you cannot make changes to these fields QUESTION 7 How are the linked accounts for CPP different from the linked accounts for income tax - O a. CPP has a linked liability account only; income tax has an expense account only Ob. CPP has a linked expense account only; income tax has a liability account only Oc. CPP has both linked liability and expense accounts; income tax has a liability account only d. none of the above QUESTION 8 Creating an Accountant s Copy of your data allows your accountant to

question 35 choose the correct answer from the choices

problem 28 ... Briefly explain the concepts of accounting profit, taxable profit, temporary difference, taxable temporary difference, deductible temporary difference, deferred tax assets and deferred tax liability.

Multiple Choice Qsn .You have to choose one answer. 1.Which of the following statements is correct? a. Gains that are ordinary income will be assessable income under s .6-5 of ITAA 1997. b. Gains will be ordinary income if they are the type of gains that courts of law consider to be of an income character. c. A gain that comes in regularly/periodically is more likely to be ordinary income than a lump-sum gain. d. Whether or not a gain arises from an illegal activity does not affect whether it is ordinary income. e. All of the above. (2) Which of the following statements is correct? a. Capital gains and capital losses arising from a CGT event are always assessed to the individual partners of a partnership according to their interest. b. partner can have more than one interest in a partnership asset. c .There is a disposal of part of an interest in a partnership asset whenever a new partner is admitted to a partnership. d.All of the above

Topic: Accounting for Income TaxCan you please help explain tax bases for assets and liabilities under temporary difference (between accounting income and taxation income)? Would be so helpful if you could simplify what tax bases mean. I'm confused why, in the second page, the tax bases are considered 0 and I'm not sure what that means. Thanks!

In computing net business income for income tax purposes, which of the following statements is INCORRECT? Question 3Answer a. Income tax paid is not allowed as a business deduction. b. Depreciation is not allowed as a business deduction. c. Capital cost allowance is not allowed as a business deduction. d. An arbitrary reserve is not allowed as a business deduction.

20. A temporary difference arises when a revenue item is reported for tax purposes in a period   After it is reportedin financial income Before it is reportedin financial income No Yes No No Yes No Yes Yes

26.  Which is FALSE? S1 – All income is taxable. S2 – All exclusions from gross income are exempted. S3 – All passive income subjected to final tax are not items of gross income S4 – All income exempted by law or treaty are exempted from income tax Group of answer choices a. S1 c. S3 d. S4 b. S2

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Determine if this shall result in recognition of liabilities 11. withholding of taxes on employees' compensation a. yes b. no

Definitions The FASB has defined several terms in regard to accounting for income taxes. Below are various code letters (for terms) followed by definitions. Code Letter Term Code Letter Term A. Future deductible amount H Deferred tax consequences B Income tax payable (or refund) I Future taxable amount Operating loss carryback Deferred tax liability D Valuation allowance K Temporary difference E Deferred tax asset Income tax expense (or benefit) F Operating loss carryforward M Deferred tax expense (or benefit) Taxable income Required: Indicate which term belongs with each definition by choosing the correct term. 1. The deferred tax consequences of future deductible amounts and operating loss carryforwards 2. A difference between the tax basis of an asset or liability and its reported amount in the financial statements that will result in taxable or deductible amounts in future years when the reported amount of the asset or liability is recovered or settled, respectively X 3. Temporary…

Choose the correct letter of answer. a. I only b. II only c. Both I and II d. Neither I and II

9. Which of the following situations will result to a not a future taxable amount? A. Carrying amount of the asset > tax base of the asset B. Tax base of the asset > carrying amount of the asset C. Carrying amount of the liability Taxable income 10. Statement 1: IAS 12 par. 70 states that when an enterprise makes a distinction between current and non- current assets and liabilities in its financial statements, it should classify deferred tax assets (liabilities) as noncurrent assets (liabilities). Statement 2: Corporation is obliged to pay to BIR the lower between the Basic Corporate Income Tax (BCIT) and Minimum Corporate Income Tax (MCIT). A. Only statement 1 is correct C. Both statements are correct D. Both statements are incorrect B. Only statement 2 is correct

QUESTION 13 The practice of including the income tax effect of a particular transaction with the transaction itself on the income statement is known as intraperiod tax allocation.     True     False

8.All of the following components are shown in the income statement net of applicable income taxes EXCEPT Group of answer choices A.cumulative effect of a change in accounting principle. B.extraordinary gain or loss. C.discontinued operations. D.gain or loss on sale of plant assets.