All of the following would result to deferred tax asset, except a. Tax base for a machine is greater than the carrying amount. b. Development costs shave been capitalized and amortized but were deducted in determining taxable income in the period incurred. c. The accumulated depreciation on an asset is greater than accumulated tax depreciation d. Interest expense is accrued but included in taxable income on a cash basis.

All of the following would result to deferred tax asset, except a. Tax base for a machine is greater than the carrying amount. b. Development costs shave been capitalized and amortized but were deducted in determining taxable income in the period incurred. c. The accumulated depreciation on an asset is greater than accumulated tax depreciation d. Interest expense is accrued but included in taxable income on a cash basis.

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter14: Taxes On The Financial Statements

Section: Chapter Questions

Problem 49P

See similar textbooks

Similar questions

The MACRS depreciation system is used for tax purposes, and the straight-line depreciation method is used for financial reporting purposes for some plant assets. For each item below, indicate whether it involves: 1. A temporary difference that will result in future deductible amounts and, therefore, will usually give rise to a deferred income tax asset.2. A temporary difference that will result in future taxable amounts and, therefore, will usually give rise to a deferred income tax liability.3. A permanent difference.
Using the straight-line method of depreciation for reporting purposes and accelerateddepreciation for tax purposes would most likely result in a:A . valuation allowance.B . deferred tax asset.C . temporary diff erence.
2. Which of the following situations will result in a future deductible amount? Carrying amount of the asset > tax base of the asset Tax base of the asset > carrying amount of the asset Carrying amount of the liability < tax base of the liability Financial income > Taxable income
When accounting standards require an asset to be expensed immediately but tax rulesrequire the item to be capitalized and amortized, the company will most likely record:A . a deferred tax asset.B . a deferred tax liability.C . no deferred tax asset or liability.
Which of the following usually results in an increase in a deferred tax asset? A) Accelerated depreciation for tax reporting and straight-line depreciation for financial reporting. B) Prepaid insurance. C) Subscriptions delivered for which customers had paid in advance. D) None of these answer choices are correct.
The tax base of a liability is a. Its carrying amount b. The amount that will be deductible for tax purposes against any taxable economic benefits that will flow to an entity when it recovers the carrying amount of the asset. c. Its carrying amount, less any amount that will be deductible for tax purposes in respect of that liability in future periods
When assessing realizability of deferred tax assets, management must consider positive and negative evidence. All of the following would be considered positive evidence except ________. Group of answer choices taxable income in prior carryback year(s) if carryback is permitted under the tax law future reversals of existing taxable temporary differences an excess of appreciated asset value over the tax basis of the entity's net assets unsettled circumstances that could adversely affect future operations
Will the existence of unused tax losses always lead to the recognition of a deferred tax assets? Explain your answer with suitable example. Provide An excellent explanation of under what condition unused tax losses can create deferred tax assets.
With respect to transaction and translation gains and losses: a. transaction gains and losses are taxable but have no immediate cash flow impact. b. transaction gains and losses have immediate cash flow and tax consequences, translation gains and losses have neither. c. transaction gains and losses have an immediate cash flow impact, but taxation is deferred until the related assets are sold. d. transaction and translation gains are taxable, but only transaction losses are tax deductible.
A temporary difference that would not result in a deferred tax asset but not a permanent difference? a. accrual of commission income. b. excess of financial depreciation over tax depreciation. c. interest revenue on government bonds. d. accrued warranty expense.
If the carrying amount of an asset is higher than the tax base, the difference will result in deferred tax liability. Required: True or False
What is the proper term for depreciation methods used for tax purposes? Provide the acronym and the full name. What was the term for the method used before the current method?