Which of the following statements is correct in accordance with AASB 112 Income Taxes?Group of answer choicesCurrent tax expense is the sum of tax expense plus deferred tax expense.All movements in deferred tax assets and liabilities are recognised in the income statement.Deferred tax liabilities are determined from taxable and deductible temporary differences.Tax expense is the sum of current tax expense plus deferred tax expense.
Question
Which of the following statements is correct in accordance with AASB 112 Income Taxes?Group of answer choicesCurrent tax expense is the sum of tax expense plus deferred tax expense.All movements in deferred tax assets and liabilities are recognised in the income statement.Deferred tax liabilities are determined from taxable and deductible temporary differences.Tax expense is the sum of current tax expense plus deferred tax expense.
Solution
The correct statement in accordance with AASB 112 Income Taxes is: "Tax expense is the sum of current tax expense plus deferred tax expense."
Here's the step by step explanation:
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AASB 112 Income Taxes is a standard that provides guidance on the accounting treatment for income taxes.
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The standard defines tax expense as the aggregate amount included in the determination of profit or loss for the period in respect of current tax and deferred tax.
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Current tax is the amount of income taxes payable (recoverable) in respect of the taxable profit (tax loss) for a period.
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Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit.
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Therefore, the tax expense for a period is the sum of the current tax and any deferred tax.
Similar Questions
Which of the following items is NOT required to be disclosed in accordance with AASB 112 Income Taxes?Group of answer choicesan explanation of the relationship between tax expense and each component of other comprehensive income.the amount of any benefit arising from a previously unrecognised tax loss.for each type of temporary difference and in respect of each type of unused tax loss the amount of deferred tax asset or deferred tax liability that has been recognised in the statement of financial position.income tax relating to each component of other comprehensive income.
For the year ended 30 June 2020, Marshall Ltd (Marshall) had an accounting profit of $200 000 and a taxable profit of $170 000. The tax expense of Marshall for the year ended 30 June 2020 was $60 000. At 30 June 2020 it was determined that the company had a deferred tax liability of $27 000. Assume that there was no deferred tax asset at the beginning or end of the period.The tax rate is 30 per cent.Which of the following statements is correct in accordance with AASB 112 Income Taxes?Group of answer choicesThe deferred tax expense for the year ended 30 June 2020 was $27,000.The current tax expense for the year ended 30 June 2020 was $33,000.The deferred tax liability as at 30 June 2019 was $18,000.The deferred tax liability as at 30 June 2019 was $0.
Which of the following expenses appears in a company's income statement but would not appear in a partnership income statement?Group of answer choicesInterest expenseInsurance expenseDepreciation expenseIncome tax expense
The Expenses section of an income statement includes which of the following? Group of answer choicesthe amounts of prepaid utility fees and allowancesoutflows related to the accounting period and expenses that were incurred in the process of producing revenuedepreciation and interest incomeinflows related to the accounting period and expenses that were incurred in the process of producing revenue
Which of the items below would appear in the Income Statement columns of the work sheet?Group of answer choicesEquipmentUnearned FeesPrepaid ExpenseNet Loss
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