Question :
71. The basis for both U.S. GAAP and IFRS requirements for : 1230343
71. The basis for both U.S. GAAP and IFRS requirements for income tax accounting for financial reporting purposes focuses on which of the following financial reporting objectives?
A. recognizing the amount of taxes payable in the current year, only.
B. recognizing deferred tax assets and deferred tax liabilities for the future income tax consequences of temporary differences, only.
C. recognizing the amount of taxes payable in the current year, and recognizing deferred tax assets and deferred tax liabilities for the future income tax consequences of temporary differences.
D. recognizing deferred tax assets and deferred tax liabilities for the future income tax consequences of permanent differences, only.
E. recognizing the amount of taxes payable in the current year, and recognizing deferred tax assets and deferred tax liabilities for the future income tax consequences of permanent differences.
72. Using U.S. GAAP and IFRS requirements for income tax accounting for financial reporting purposes, permanent differences
A. reverse, affect cash outflows for income taxes, and therefore affect income tax expense.
B. reverse, affect cash outflows for income taxes, and therefore never affect income tax expense for any period.
C. reverse, never affect cash outflows for income taxes, and therefore never affect income tax expense for any period.
D. never reverse, affect cash outflows for income taxes, and therefore never affect income tax expense for any period.
E. never reverse, never affect cash outflows for income taxes, and therefore never affect income tax expense for any period.
73. Using U.S. GAAP and IFRS requirements for income tax accounting for financial reporting purposes, the accountant computes income tax expense using
A. pretax amounts for financial reporting.
B. the amounts on income tax returns.
C. the cash outflows for income taxes.
D. permanent differences.
E. temporary and permanent differences.
74. The temporary difference associated with accelerated depreciation for tax purposes and straight-line depreciation for financial reporting purposes means that a firm will pay _____ income taxes in the early years of the asset’s life, but this temporary difference will reverse over the entire asset life, resulting in _____ taxes in later years.
A. higher; higher
B. lower; higher
C. higher; lower
D. lower; lower
E. average; average
75. U.S. GAAP and IFRS require complex procedures in accounting for income taxes. Complexities in the accounting for income taxes include(s)
A. income tax rates change over time, so the deferred tax liability need not represent the amount of taxes that the firm must pay later.
B. some temporary differences create deferred tax assets.
C. some temporary differences create deferred tax liabilities.
D. firms recognize deferred tax assets only to the extent that they expect to generate sufficient taxable income to realize the assets in the form of tax savings in the future.
E. all of the above
76. U.S. GAAP and IFRS require complex procedures in accounting for income taxes. A deferred tax asset arises when
A. a firm recognizes an expense earlier for financial reporting than for tax reporting.
B. a firm recognizes an expense earlier for tax reporting than for financial reporting.
C. a firm recognizes a revenue earlier for financial reporting than for tax reporting.
D. a firm recognizes a revenue earlier for tax reporting than for financial reporting.
E. none of the above
77. U.S. GAAP and IFRS require complex procedures in accounting for income taxes. For example, firms provide for estimated uncollectible accounts when they recognize sales on account but delay the tax deduction until later, when firms judge that particular customers’ accounts are uncollectible. In this example, a
A. deferred tax asset arises.
B. deferred tax liability arises.
C. firm recognizes a revenue earlier for financial reporting than for tax reporting.
D. firm recognizes a revenue earlier for tax reporting than for financial reporting.
E. firm recognizes an expense earlier for tax reporting than for financial reporting.
78. U.S. GAAP and IFRS require complex procedures in accounting for income taxes. For example, firms provide for estimated warranty cost in the year they sell warranted products but delay the tax deduction until later, when firms make actual expenditures for warranty repairs. In this example, a
A. deferred tax asset arises.
B. deferred tax liability arises.
C. firm recognizes a revenue earlier for financial reporting than for tax reporting.
D. firm recognizes a revenue earlier for tax reporting than for financial reporting.
E. firm recognizes an expense earlier for tax reporting than for financial reporting.
79. U.S. GAAP and IFRS require that some temporary differences create deferred tax assets. The temporary differences include the
A. provision for estimated uncollectible accounts when they recognize sales on account, only.
B. provision for estimated warranty cost in the year the warranted products are sold, only
C. recognition of tax-exempt interest income, only.
D. payment of municipal penalties and fines, only.
E. provision for estimated uncollectible accounts when they recognize sales on account, and the provision for estimated warranty cost in the year the warranted products are sold.
80. Firms recognize deferred tax assets only to the extent that they expect to generate sufficient taxable income to realize the assets in the form of tax savings in the future. U.S. GAAP requires use of a deferred _____ to reduce the balance in the _____ account to the amount the firm expects to realize in tax savings in the future.
A. tax asset valuation allowance; Deferred Tax Asset
B. tax expense; Deferred Tax Asset
C. tax asset valuation allowance; Deferred Tax Liability
D. tax expense; Deferred Tax Liability
E. tax expense; Deferred Tax Revenue
