Question 17 of 51

Which of the following terms best describes the net amount of an asset or liability used for tax reporting purposes?

Income tax expense reported on the income statement is equal to taxes payable plus which of the following?

A deferred tax liability is most likely created when:

Which of the following items typically results in the creation of a deferred tax asset?

A permanent difference between taxable income and pretax income:

An asset has a carrying value of $100,000 and a tax base of $80,000. The tax rate is 30 percent. This situation creates a:

At year-end, a firm has a warranty liability with a carrying value of $5,000. Warranty expense is not deductible for tax purposes until paid. The tax base of this liability is:

A firm receives $10,000 in advance for services. This amount is taxed immediately but recognized as revenue next year. The tax rate is 25 percent. This creates a:

If a company uses the straight-line depreciation method for financial reporting and an accelerated method for tax reporting, in the early years of the asset's life, this will most likely result in:

For a liability, if the carrying value is greater than the tax base, this typically results in:

When the income tax rate increases, the balance of a deferred tax liability will:

A firm has a deferred tax asset of $10,000 resulting from a tax rate of 25 percent. If the tax rate decreases to 20 percent, the adjustment to the deferred tax asset will result in:

If a company has a deferred tax liability and the tax rate increases, the adjustment to the liability on the balance sheet will be:

Which of the following creates a permanent difference?

The statutory tax rate is 35 percent. A firm has taxable income of $100,000 and tax-exempt municipal bond interest of $10,000. The effective tax rate is closest to:

Under U.S. GAAP, a valuation allowance is required for a deferred tax asset if:

When comparing IFRS and U.S. GAAP regarding income taxes, which of the following is accurate?

Under IFRS, deferred tax assets and liabilities are measured using:

A firm has an asset with a carrying value of $200,000 and a tax base of $150,000. The tax rate is 25 percent. The firm reports a deferred tax liability of:

Taxable income is defined as:

Accounting profit is also known as:

If a firm has taxable losses in excess of its taxable income, it can create a:

Which of the following would be classified as a permanent difference?

If deferred tax liabilities are not expected to reverse in the future, an analyst should typically treat them as:

A firm has a deferred tax liability of $40,000 at the beginning of the year. At the end of the year, the liability is $50,000. Taxes payable for the year are $80,000. Income tax expense is:

Which of the following best describes the tax base of an asset?

Research and development costs expensed on the income statement but capitalized for tax purposes create:

A firm sells an asset for $100,000. The carrying value is $90,000 and the tax base is $80,000. What is the effect on the deferred tax liability related to this asset?

If a firm has a net deferred tax asset position, a decrease in the corporate tax rate will:

For analytical purposes, if a deferred tax liability is expected to increase indefinitely due to growth in capital expenditures, it should be treated as:

A valuation allowance is a contra account that reduces the value of:

Under IFRS, the deferred tax liability resulting from an upward revaluation of fixed assets is recognized in:

Under IFRS, deferred tax assets and liabilities are classified on the balance sheet as:

The statutory tax rate is:

An effective tax rate lower than the statutory tax rate is most likely caused by:

Which of the following is required to be disclosed regarding deferred taxes?

A reduction in the valuation allowance will result in:

If a firm has a deferred tax liability of $50,000 and a deferred tax asset of $20,000, and the tax rate decreases, the impact on equity is:

A firm records $100,000 of warranty expense in its financial statements. Actual warranty payments were $20,000. The tax rate is 40%. The increase in the deferred tax asset is:

Deferred tax liability arising from an investment in a subsidiary is:

A temporary difference results in a deferred tax asset if:

Which of the following creates a temporary difference?

If a firm recognizes a valuation allowance of $500 against a deferred tax asset of $2,000, the net deferred tax asset reported is:

A decrease in the tax rate would result in a decrease in which of the following?

Income tax paid is defined as:

A firm has an effective tax rate of 40% and a statutory rate of 35%. This is most likely due to:

Regarding the classification of cash flows, IFRS allows interest paid to be classified as:

The term 'tax loss carryforward' refers to:

Deferred tax items for a firm reporting under U.S. GAAP are typically:

If a firm uses LIFO for U.S. GAAP financial statements, it must: