Question :
61. Sky King Airlines discloses the funded status of pension plans : 1230342
61. Sky King Airlines discloses the funded status of pension plans and the health and life insurance plans for two recent years. Both the pension plan and other benefit plans are underfunded. The underfunded amounts for these plans appear in
A. current assets and noncurrent assets on the balance sheet.
B. current liabilities and noncurrent liabilities on the balance sheet.
C. shareholders’ equity on the balance sheet.
D. revenue on the income statement.
E. expenses on the income statement.
62. Sky King Airlines discloses the funded status of pension plans and the health and life insurance plans for two recent years. Both the pension plan and other benefit plans are underfunded. The amounts that Sky King includes in _____, _____, represent unamortized prior service costs and net actuarial losses.
A. Other Comprehensive Income; a revenue account
B. Accumulated Other Comprehensive Income; a shareholders’ equity account
C. Other Comprehensive Income; an asset account
D. Accumulated Other Comprehensive Income; a liability account
E. Other Comprehensive Income; a shareholders’ equity account
63. Income tax expense affects assessments of profitability as much as any other expense. A common ratio for analyzing the effect of income taxes on profitability is the _____ rate, equal to income tax expense divided by financial reporting income before income taxes:
A. marginal tax
B. effective tax
C. tax burden
D. statutory
E. average
64. What equals the income tax expense divided by financial reporting income before income taxes:
A. marginal tax rate
B. effective tax rate
C. tax burden rate
D. statutory rate
E. average tax rate
65. Permanent differences between pretax book income and taxable income arises from
A. tax-exempt interest revenue, only.
B. certain fines, only.
C. depreciation on long-lived assets, only.
D. bad debt expense, only.
E. tax-exempt interest revenue and certain fines.
66. Temporary differences between pretax book income and taxable income arises from
A. tax-exempt interest revenue, only.
B. certain fines, only.
C. depreciation on long-lived assets, only.
D. bad debt expense, only.
E. depreciation on long-lived assets and bad debt expense.
67. Firms compute income tax payable for a period using _____ as the base.
A. book income
B. total income
C. permanent income
D. taxable income
E. gross income
68. Taxable income excludes _____ and uses the accounting methods that the _____ either require or permit firms to use for tax reporting.
A. temporary differences; income tax law and regulations
B. permanent differences; income tax law and regulations
C. temporary differences; U.S. GAAP or IFRS
D. permanent differences; U.S. GAAP or IFRS
E. temporary and permanent differences; U.S. GAAP or IFRS
69. Which of the following is/are true regarding U.S. GAAP and IFRS requirements for income tax accounting for financial reporting purposes?
A. A permanent difference never affects income tax expense for any period.
B. A temporary difference that implies a future tax deduction gives rise to a deferred tax asset.
C. A temporary difference that implies a future increase in income tax payable gives rise to a deferred tax liability.
D. The accountant computes income tax expense using pretax amounts for financial reporting.
E. all of the above
70. Which of the following is/are not true regarding U.S. GAAP and IFRS requirements for income tax accounting for financial reporting purposes?
A. Income taxes expense equals income taxes currently payable.
B. A temporary difference that implies a future tax deduction gives rise to a deferred tax asset.
C. A temporary difference that implies a future increase in income tax payable gives rise to a deferred tax liability.
D. The accountant computes income tax expense using pretax amounts for financial reporting.
E. A permanent difference never affects income tax expense for any period.
