1. Deferred income tax liabilities are amounts owed to the government True or False 2. Deferred...

1. Deferred income tax liabilities are amounts owed to the government True or False

2. Deferred taxes appear on a company's balance sheet as a result of inter-period tax True or False

3. "Taxable amounts" include revenues and gains that are included in the tax return BEFORE they are recognized for accounting purposes. True or False

4. Existing sufficient taxable temporary differences, which will result in taxable income, is one piece of evidence to support a more likely than not criteria. True or False

5. Two taxable permanent differences are Political contribution and 2) Golf club dues True or False

Expert Solution

1.Deferred tax liability is not a due which will be payable to government. It arises only because of timing differences. If carrying amount is greater than tax base, temporary difference arises and results in deferred tax liability.

Hence the answer is false.

2. Deferred taxes arises because of tax effect on the timing differences not because of inter period tax.

Hence it is a false statement.

4.An entity should recognise deferred tax assets only when it is probable that taxable profits wil available against which deductible temporary differences can be utilised.Existing sufficient taxable temporary differences which will result in taxable income is an example and is also a evidence to support a more likely than not.

5. No. Political contribution is allowable while calculating taxable profits and even gold club dues are also not classifiable into permanent differences. These are temporary differences.

ekkarill92 answered 2 hours ago

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