A debit balance appearing on the trial balance as taxation has been identified as the under-provision for tax relating to the previous year’s profit. This amount should be included in the current year’s financial statements of a company as: a deduction from the sub-total of Equity and reserves on the Statement of financial position or art of administrative expenses in the Statement of income or a deduction from Retained Earnings brought forward, in the Statement of changes in Equity or part of the tax expense reported in the current year’s Statement of income.
A debit balance appearing on the trial balance as taxation has been identified as the under-provision for tax relating to the previous year’s profit. This amount should be included in the current year’s financial statements of a company as: a deduction from the sub-total of Equity and reserves on the Statement of financial position or art of administrative expenses in the Statement of income or a deduction from Retained Earnings brought forward, in the Statement of changes in Equity or part of the tax expense reported in the current year’s Statement of income.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter16: Retained Earnings And Earnings Per Share
Section: Chapter Questions
Problem 2MC: A prior period adjustment should be reflected, net of applicable income taxes, in the financial...
Related questions
Question
A debit balance appearing on the
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT