Exam 14: Income Taxes and Financial Accounting

Comprehensive tax allocation is an example of:

Deferred taxes were viewed as liabilities under APB Opinion No. 11.

Which of the following statements was not made in ARB 43?

International Accounting Standards use deferred tax assets and liabilities for recognizing temporary differences.

The main problem with partial allocation is the question of timeliness.

Unused tax credits may generate deferred tax assets.

Under which of the following methods is income tax expense equal to the income tax liability?

Which of the following statements does not apply to intrastatement tax allocation?

When is tax allocation necessary?

Intraperiod and intrastatement allocation both refer to showing income statement items such as extraordinary items and changes in accounting principle net of the tax effect.

The income tax law of 1913 established accounting income as a basis for taxation.

Under comprehensive allocation, the tax liability is equal to the income expense for the period.

Explain how comprehensive allocation differs from partial allocation.

Which of the following is not a true statement regarding comprehensive income tax allocation?

In partial tax allocation, resulting credits are interpreted as liabilities that mature beyond a year.

Timing differences are now referred to as temporary differences.

Tax allocation is made necessary by the permanent differences in financial statement income and tax income.

Which of the following cases would cause the tax liability to be greater than tax expense?

From an economic standpoint, it appears reasonable that deferred tax liabilities should be shown at their present value.

The tax liability would be greater than tax expense whenever revenues are recognized for tax purposes in a different period than for published reporting purposes.