3 B Tax Expense Tax Liability Reconciling Book Income

3 B Tax Expense Tax Liability Reconciling Book Income -...

Info icon This preview shows pages 1–7. Sign up to view the full content.

View Full Document Right Arrow Icon
Liability, & Reconciling Book Income and Taxable Income Chapter 6
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Learning Objectives 1. Understand the differences between financial accounting income and taxable income 2. Understand permanent differences 3. Understand temporary differences 4. Reconcile financial net income to taxable income 5. Calculate tax expense for financial accounting 6. Calculate tax liability for tax 7. Calculate deferred tax (asset or
Image of page 2
Net Income vs. Taxable Income Net Income follows GAAP Taxable Income is determined by IRC & tax law Differences are either permanent or temporary
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Permanent Differences What are these? Included in financial accounting, but not taxable income or vice versa Examples Non deductible expenses Exempt income Non expenditure tax deductions
Image of page 4
Temporary Differences Timing differences when recognized in financial income and taxable income Result in deferred tax assets or liabilities Examples: bad debts, depreciation, warranty liability
Image of page 5

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Deferred Tax
Image of page 6
Image of page 7
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern