Accounting For Income Taxes

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Business Income,Deductions,and Accounting Methods
Property Acquisition and Cost Recovery
Property Dispositions
Entities Overview
Corporate Operations
Accounting for Income Taxes
Corporate Taxation: Nonliquidating Distributions
Corporate Formation,Neorganization,and Liquidation
Forming and Operating Partnerships
Dispositions of Partnership Interests and Partnership Distributions
S Corporations
State and Local Taxes
The Ustaxation of Multinational Transactions
Transfer Taxes and Wealth Planning

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Question 1

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ASC 740 governs how a company accounts for all taxes it incurs.

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Question 2

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ASC 740 is the sole source of rules related to accounting for income taxes.

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Question 3

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Temporary differences create either a deferred tax asset or a deferred tax liability.

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Question 4

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Publicly-traded companies usually file their financial statements before they file their federal income tax returns.

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Question 5

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The Emerging Issues Task Force assists the FASB by providing guidance on the implementation of ASC 740 and other accounting pronouncements.

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Question 6

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ASC 740 applies to accounting for state and local and international income taxes as well as federal income taxes.

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Question 7

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The "current income tax expense or benefit" always represents just the taxes paid or refunded
in the current year.

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Question 8

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The focus of ASC 740 is the income statement.

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Question 9

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Tax-exempt interest from municipal bonds is an example of a permanent book to tax difference.

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Question 10

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The tax effects of permanent differences are always reported solely in a company's computation of its effective tax rate.

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Question 11

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In general,a temporary difference reflects a difference in the financial basis and tax basis of an asset or liability on the balance sheet.

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Question 12

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Temporary differences that are cumulatively "favorable" are defined as taxable temporary differences.

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Question 13

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Brown Corporation reports $100,000 of gain from the sale of land on its income statement.For tax purposes,Brown uses the installment method and reports gain of $10,000.The $90,000 difference in the gain reported is a deductible temporary difference.

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Question 14

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ASC 740 deals with accounting for uncertain tax positions.

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Question 15

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Assume Congress reduces the corporate tax rate from 35 percent to 25 percent effective in 2017.The tax rate change will affect only deferred tax assets and liabilities that arise in 2017 and thereafter.

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Question 16

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A valuation allowance can reduce both a deferred tax asset and a deferred tax liability.

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Question 17

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A corporation evaluates the need for a valuation allowance by comparing both positive and negative evidence that the corporation will realize a deferred tax asset in the future.

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Question 18

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A corporation undertakes a valuation allowance analysis to determine if a deferred tax asset should be recognized on the balance sheet.

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Question 19

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A cumulative financial accounting (book)loss over three years likely would be considered significant negative evidence in a valuation allowance analysis.

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Question 20

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ASC 740 applies a two-step process in determining if an uncertain tax benefit should be recognized.

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Accounting For Income Taxes

ASC 740 governs how a company accounts for all taxes it incurs.

ASC 740 is the sole source of rules related to accounting for income taxes.

Temporary differences create either a deferred tax asset or a deferred tax liability.

Publicly-traded companies usually file their financial statements before they file their federal income tax returns.

The Emerging Issues Task Force assists the FASB by providing guidance on the implementation of ASC 740 and other accounting pronouncements.

ASC 740 applies to accounting for state and local and international income taxes as well as federal income taxes.

The "current income tax expense or benefit" always represents just the taxes paid or refundedin the current year.

The focus of ASC 740 is the income statement.

Tax-exempt interest from municipal bonds is an example of a permanent book to tax difference.

The tax effects of permanent differences are always reported solely in a company's computation of its effective tax rate.

In general,a temporary difference reflects a difference in the financial basis and tax basis of an asset or liability on the balance sheet.

Temporary differences that are cumulatively "favorable" are defined as taxable temporary differences.

Brown Corporation reports $100,000 of gain from the sale of land on its income statement.For tax purposes,Brown uses the installment method and reports gain of $10,000.The $90,000 difference in the gain reported is a deductible temporary difference.

ASC 740 deals with accounting for uncertain tax positions.

Assume Congress reduces the corporate tax rate from 35 percent to 25 percent effective in 2017.The tax rate change will affect only deferred tax assets and liabilities that arise in 2017 and thereafter.

A valuation allowance can reduce both a deferred tax asset and a deferred tax liability.

A corporation evaluates the need for a valuation allowance by comparing both positive and negative evidence that the corporation will realize a deferred tax asset in the future.

A corporation undertakes a valuation allowance analysis to determine if a deferred tax asset should be recognized on the balance sheet.

A cumulative financial accounting (book)loss over three years likely would be considered significant negative evidence in a valuation allowance analysis.

ASC 740 applies a two-step process in determining if an uncertain tax benefit should be recognized.

The "current income tax expense or benefit" always represents just the taxes paid or refunded
in the current year.