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CHAPTER 19 ACCOUNTING FOR INCOME TAXES IFRS questions are available at the end of this chapter. TRUE-FALSE —Conceptual Answer No. Description F 1. Taxable income. F 2. Use of pretax financial income. T 3. Taxable amounts. T 4. Deferred tax liability. F 5. Deductible amounts. T 6. Deferred tax asset. F 7. Need for valuation allowance account. T 8. Positive and negative evidence. F 9. Computation of income tax expense. T 10. Taxable temporary differences. F 11. Taxable temporary difference examples. T 12. Permanent differences. T 13. Applying tax rates to temporary differences. F 14. Change in tax rates. F 15. Accounting for a loss carryback. T 16. Tax effect of a loss carryforward. T 17. Possible source of taxable income. T 18. Classification of deferred tax assets and liabilities. F 19. Classification of deferred tax accounts. F 20. Method used for accounting for income taxes. MULTIPLE CHOICE —Conceptual Answer No. Description b 21. Differences between taxable and accounting income. c 22. Differences between taxable and accounting income. b 23. Determination of deferred tax expense. a 24. Differences arising from depreciation methods. a P 25. Temporary difference and a revenue item. b S 26. Effect of future taxable amount. c P 27. Causes of a deferred tax liability. d S 28. Distinction between temporary and permanent differences. b S 29. Identification of deductible temporary difference. c S 30. Identification of taxable temporary difference. d S 31. Identification of future taxable amounts. c 32. Identify a permanent difference. d 33. Identification of permanent differences. d 34. Identification of temporary differences. d 35. Difference due to the equity method of investment accounting. b 36. Difference due to unrealized loss on marketable securities. a 37. Identification of deductible temporary differences.
Test Bank for Intermediate Accounting, Fourteenth Edition d 38. Identification of temporary difference. 19 - 2
Accounting for Income Taxes MULTIPLE CHOICE —Conceptual (cont.) Answer No. Description c S 39. Accounting for change in tax rate. c 40. Appropriate tax rate for deferred tax amounts. b 41. Recognition of tax benefit of a loss carryforward. a 42. Recognition of valuation account for deferred tax asset. d 43. Definition of uncertain tax positions. c 44. Recognition of tax benefit with uncertain tax position. d 45. Reasons for disclosure of deferred income tax information. c 46. Classification of deferred income tax on the balance sheet. b 47. Classification of deferred income tax on the balance sheet. d 48. Basis for classification as current or noncurrent. d 49. Income statement presentation of a tax benefit from NOL carryforward. c S 50. Classification of a deferred tax liability. c 51. Procedures for computing deferred income taxes. P These questions also appear in the Problem-Solving Survival Guide.
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