Tax Accounting Fundamentals and Principles

Tax accounting is primarily concerned with:

• Determining the financial position of a business.

• Calculating the tax liability of a business.

• Measuring the profitability of a business.

• Assessing the overall financial health of a business.

Which of the following best describes tax accounting?

• A system of recording financial transactions for internal use.

• A process of preparing financial statements for external use.

• A method of calculating the tax liability of a business.

• A technique for measuring the profitability of a business.

The primary difference between general accounting and tax accounting lies in:

• The purpose of the information produced.

• The accounting principles used.

• The frequency of reporting.

• The level of detail required.

Which of the following is typically not a concern in general accounting?

• Revenue recognition

• Expense recognition

• Tax deductions

• Inventory valuation

The primary objective of tax accounting is to:

• Maximize profits.

• Minimize tax liability.

• Improve financial performance.

• Enhance cash flow.

Tax accounting is primarily concerned with:

• Financial reporting to shareholders.

• Compliance with tax laws and regulations.

• Internal management decision-making.

• External financial reporting to creditors.

The primary source of tax accounting guidelines in Indonesia is:

• The Indonesian Accounting Standards Board

• The International Financial Reporting Standards

• The Directorate General of Taxes

• The Indonesian Financial Accounting Standards

Which of the following is a key principle of tax accounting in Indonesia?

• Accrual basis

• Cash basis

• Matching principle

• Revenue recognition principle

The principle of adherence to principles in tax accounting requires:

• Using the same accounting methods from year to year.

• Using the most conservative accounting methods.

• Using the most profitable accounting methods.

• Using the methods that result in the lowest tax liability.

The principle of realization in tax accounting requires:

• Recognizing income when it is earned.

• Recognizing income when it is received.

• Recognizing income when it is collected.

• Recognizing income when it is estimated to be earned.