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WorksheetsFININS&INCTAX
Total questions: 24
Worksheet time: 12mins
A financial instrument is any contract that gives rise to
A financial liability
A financial asset
A financial asset of one entity and a financial liability of another entity
A financial asset of one entity and a financial liability or equity instrument of another entity
Which is not classified as a financial instrument?
Convertible bond
Foreign currency contract
Warranty provision
Loan receivable
Which cannot be considered a financial asset?
Cash
A contractual right to receive cash or another financia asset from another entity
A contractual right to exchange financial instruments with another entity under conditions that are potentially unfavorable
An equity instrument of another entity
Which should be classified as financial asset
Patent
Trade accounts receivable
Inventory
Land
A financial liability
Must be classified as noncurrent liability.
Is a contractual obligation to deliver cash or another financial asset to another entity
Is a contractual obligation to exchange financial instrument with another entity under conditions that are potentially favorable to the entity
Is a contractual obligation to deliver cash or any asset to another entity
Financial assets include all of the following, except
Prepaid expenses
Cash in bank
Investment in equity instrument
Notes receivable
Financial liabilities include
Deferred revenue
Warranty liability
Constructive obligation
Loan payable
Financial liabilities include all of the following, except
Trade accounts payable
Notes payable
Bonds payable
Income tax payable
It is any contract that evidences residual interest in the assets of an entity after deducting all of the liabilities
Debt instrument
Equity instrument
Loan receivable
Financial asset with indeterminable fair value
Which is not an equity instrument
Ordinary share capital
Bond payable
Preference share capital
Share option or share warrant
Accounting income is
The income for a period before deducting tax expense
The income for a period determined in accordance with tax law.
The income for a period after deducting tax expense
The income after current tax expense determined in accordance with tax law.
These are differences that will result in future taxable amount in determining taxable income of future periods.
Temporary differences
Taxable temporary differences
Deductible temporary differences
Permanent differences
These are differences that result in future deductible amount in determining taxable income in future periods.
Taxable temporary differences
Deductible temporary differences
Taxable temporary and permanent differences
Deductible temporary and permanent differences
Justification for the method of determining periodic income tax expense is based on the concept of
Objectivity in the calculation of periodic expense.
Matching of periodic expense to periodic revenue.
Recognition of deferred tax asset and liability.
Consistency of tax expense measurement with actual tax planning strategies.
When ten porary difference will result in taxable amount in future years
A deferred tax liability is recognized in the current year.
A deferred tax asset is recognized in the current year
A deferred tax asset may be recognized in the current year if certain conditions are met.
A deferred tax liability may be recognized in the current year if certain conditions are met.
A deferred tax liability shall be recognized for all
Permanent differences
Temporary differences
Taxable temporary differences
Deductible temporary differences
It is the deferred tax consequence attributable to a deductible temporary difference and operating loss carryforward.
Deferred tax liability
Deferred tax asset
Current tax liability
Current tax asset
It is the amount of income tax payable related to taxable income.
Current tax expense
Total income tax expense
Deferred tax expense
Deferred tax benefit
It is the amount of income tax expense based accounting income.
Tax expense reported in the income statement
Current tax expense
Deferred tax expense
Deferred tax benefit
Justification for the method of determining periodic income tax expense is based on the concept
Objectivity in the calculation of periodic expense.
Matching of periodic expense to periodic revenue.
Recognition of deferred tax asset and liability.
Consistency of tax expense measurement with actual tax planning strategies.
A deferred tax liability would result from
Interest revenue on tax-exempt deposit
Doubtful accounts expense
Excess of tax depreciation over accounting depreciation
Subscription received in advance
A deferred tax asset would result from
Tax, penalty or surcharge.
Dividend received on share investment.
Excess tax depreciation over accounting depreciation.
Rent received in advance included in taxable income.
Which is true regarding deferred income taxes?
Deferred taxes of one jurisdiction are offset against another jurisdiction in the netting process.
Deferred tax asset is always netted against deferred tax liability.
Deferred tax asset and liability should be classified as noncurrent.
Deferred tax asset and liability are classified as current and noncurrent based on expiration date.
At the current year-end, an entity had a deferred tax liability that exceeded a deferred tax asset. Which of the following should be reported in the current year-end?
The excess of the deferred tax liability over the deferred tax asset as a noncurrent liability.
The excess of the deferred tax liability over the deferred tax asset as a current liability.
The deferred tax liability as a noncurrent liability.
The deferred tax liability as a current liability.
