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: part of administrative expenses in the Statement of income or a deduction from the sub-total of Equity and reserves on the Statement of financial position or part of the tax expense reported in the current year’s Statement of income or a deduction from Retained Earnings brought forward, in the Statement of changes in Equity

Q: In relation to 'retained earnings', AASB 101 mandates the following disclosures: The beginning…

A: Retained earnings is the part of owner's equity. It is the amount of profit retained in the business…

Q: When is a company allowed to initially recognize the financial statement effects of a tax position?

A: An entity shall initially recognize the financial statement effects of a tax position when it is…

Q: An entity computed its pre-tax income in its GAAP compliant books at P2,450,000 while its income per…

A: The tax owed and unpaid for the current tax year is defined as the deferred tax liability. Deferred…

Q: To calculate the company's income tax expense for the current period, it is necessary to know:…

A: The income tax expense is calculated on net Income

Q: The amount of income taxes due to the government for a period of time is rarely the amount reported…

A:

Q: Deferred income taxes result from: a. The fact that bond interest is deductible in the computa-tion…

A: Option C is correct.

Q: transitory earnings are present, which of the following correctly depicts the order used on the…

A: Transitory earning are temporary earnings that are not earned in the regular course of business.…

Q: For federal income tax purposes, the difference between the total income and total expenses reported…

A: Accounting income is the difference between total income earned and total expenses incurred.

Q: Interperiod and Intraperiod Tax Allocation  Income Tax allocation is an integral part of generally…

A: The term interperiod income tax allocation states to the income tax expense distribution among…

Q: How does a company determine the amount of income tax expense to report in an interim period?

A: Income tax: Income tax refers to the direct tax levied on individual person or business and…

Q: t of its Annual Income Tax Return, is the company allowed to make any amendment

A: In the above case a corporation filed its return of income on april 15th covering al the income of…

Q: assumption made for the tax effect method of accounting for a company’s income tax

A: Option A is wrong because an accounting balance sheet and a tax balance sheet will be different.…

Q: Interest paid on preferred stock is deductible from gross income of the paying corporation

A: Disclaimer: "Since you have asked multiple questions in a single question so we solve the first…

Q: analyze disclosures relating to deferred tax items and the eff ective tax rate reconciliation,and…

A: Disclosures relating to deferred tax items can provide valuable information to the analysts. But the…

Q: Do the liabilities and assets that are generated by using the 'balance sheet method' of accounting…

A: The implication of the rules of conceptual frame work will helpful to create best standard in the…

Q: Which of the following is true

A: The correct answer is 2. Investments in stocks of other companies accounted for using the equity…

Q: As an auditor, you are tasked to audit the income tax liability of Taxpayer Corp. which of the…

A: Permanent differences is difference between the tax expenses and tax payable due to an item that…

Q: (1) Prepare the statement of income during Year 1. Pre-tax financial income Income tax…

A: Tax is the revenue for the government and a compulsory payment for the business entity. It is the…

Q: An entity reported pretax accounting income of P5,000,000 for the current year. The taxable income…

A: The tax expense is calculated on the taxable income instead of accounting income. The tax expense is…

Q: A debit balance appearing on the trial balance as taxation has been identified as the…

A: SOLUTION- TRAIL BALANCE- IT IS A BOOKKEEPING WORKSHEET IN WHICH THE BALANCE OF ALL THE LEDGERS ARE…

Q: Recognition of tax benefits in the loss year due to a NOL carry back involves: O The establishment…

A: Recognition of Tax Benefits in the loss year due to NOL carry back  Basically its a treatment of Tax…

Q: A company receives advance payments from customers that are immediately taxable butwill not be…

A: Deferred tax asset

Q: the total income tax expense for the current period.  b. the prima facie tax on accounting profit…

A: The tax is an expense for the company but becomes a liability when payable.

Q: Recognition of tax benefits in the loss year due to a NOL carry back involves: OThe establishment of…

A: Deferred tax asset: When book profits of entity is less than taxable profits it results in deferred…

Q: Which of the following is not a common difference between net business income on the books…

A: * As per Bartleby policy, if question are unrelated then answer first only. As per IRS , business…

Q: Deferred tax asset is the * . amount of income tax paid or payable for a year as determined by…

A: Deferred Tax Assets is the deferred tax consequence attributable to a deductible temporary…

Q: Classify the following items that may cause discrepancy between accounting profit and taxable…

A: Taxable income is that the portion of your gross income wont to calculate what proportion tax you…

Q: hich of the following may not be an effect of VAT on the accounting records of a company?   The…

A: VAT is the value added tax which is applied to all sales of services and imports, as well as to the…

Q: What is the purpose of Schedule M-2 of Form 1120? O To calculate and report taxable income of the…

A: The correct answer for the above mentioned question is given in the following steps for your…

Q: Which statement is incorrect regarding other comprehensive income?

A: Other comprehensive income is the income which the company has not yet earned but yes will be earned…

Q: An entity computed its pre-tax income in its GAAP compliant books at P2,450,000 while its income per…

A: Deferred tax liability is the tax on temporary taxable difference and temporary difference is the…

Q: The following transactions were made by Company X during the current fiscal year. Explain whether or…

A: The Answer :

Q: Prepare BB's statement of profit or loss for the year starting with income from continuing…

A: Income from continuing operations and discontinuing operations are reported separately as different…

Q: If tax laws allow a company to postpone paying taxes on activities reported in the current period’s…

A: Deferred Tax Liability: Deferred Tax Liability can be created upon occurrence of difference…

Q: A temporary difference which would result in a deferred tax liability is a) installment sale…

A: Definition: Deferred tax liability:- It is the liability of tax that a business has yet not paid in…

Q: The results of the discontinued operations are presented separately in the statement of profit or…

A: Solution: Discontinued operations are results of a component of an entity that is either being held…

Q: ys lead to the recognition of a deferred tax assets? Explain your answer with suitable example.…

A: ANSWER 1 Deferred Tax refers to either a positive (Asset) or negative (liability) entry on company…

Q: Which general principle applies to the reporting of income tax expenses under interim income…

A: Interim period income tax is accrues using the tax rate  that would be applicable to expected total…

Q: Expenditures currently deducted in the tax return but not included with expenses in the income…

A: Solution: Expenditures  currently deducted in the tax return but not included with expenses in…

Q: As a general rule, which of the following is to be included in the annual tax return as an income…

A: In annual tax return of any taxpayer, the income which is declared as taxable income is considered…

Q: When certain expenditures result in tax credits that directly reduce taxes, the companywill most…

A: Tax credits directly reduces taxes and these are permanent in nature. Hence, there is no deferred…

Q: Classify the following items that may cause discrepancy between accounting profit and taxable…

A: 1. Collections of rental in excess of rent revenue reported during the period is a Taxable temporary…

Q: Refund of value added taxes in the current year which were errone paid in a prior year is generally…

A: Refund of value added tax is not a income. It is just refund of amount which was erroneously paid.

Q: An entity computed its pre-tax income in its GAAP compliant books at P2,450,000 while its income per…

A: Step 1 Deferred tax liability is the tax on temporary taxable difference and temporary difference is…

Q: Howard Company, which began operations on January 1, 2020, has elected to use the cash basis…

A: The accrual basis accounting records the revenue and expenses as soon as they are actually earned or…

Q: an auditor, you are tasked to audit the income tax liability of Evader Corp. which of the following…

A: the deferred tax is such tax that is payable in the future. entity pay there income tax on the…

Fringe Benefit Tax

Fringe benefits are in addition to the compensation that companies give to their employees. It is an additional benefit above the stated salary. It helps to keep the employees of the firm motivated as sometimes the only salary is not enough to retain the quality employees of the firm. There are different types of fringe benefits. Fringe benefits are given in both private as well as public enterprises.