In general, the differences between the accounting treatment and the income tax treatment of a particular item is that the accounting treatment is based on:  Reading required:            Learning objective 13.1: discuss the need for an accounting standard on income taxes.Group of answer choicesaccrual accounting and is subject to the requirements of accounting standards.cash flows.the income tax legislation.cash flows adjusted for depreciation charges.

Differences between the carrying amounts of an entity's net assets determined under accounting standards and accrual accounting and the tax bases of those net assets determined under the Income Tax Assessment Act 1997, are known as: Reading required:            Learning objective 13.5: calculate and account for deferred income tax.Group of answer choicestemporary differences.tax losses.permanent differences.the current income tax liability.

What is the taxation treatment for 'Fines and penalties? Reading required:            Learning objective 13.2: discuss differences in accounting treatments and taxation treatments for a range of transactions and events.Group of answer choicesNot deductible.A tax deduction on cash payment.An expense on accrual.An expense when payable.

Which statement best describes the difference between gross income and taxable income?*1 pointGross income includes all deductions, while taxable income is income before any deductionsThey are the same; both represent the total income an individual earns in a yearTaxable income is always higher than gross incomeGross income is the total income earned, while taxable income is gross income minus deductions and exemptions

When accounting for income taxes a temporary difference occurs in which of the followinga.An item is no longer taxable due to change in tax lawsb.An item is included in the calculation of net income, but is neither taxable nor deductiblec.An item is included in taxable income in one year and in taxable income in a different yeard.Accrual method of accounting is used

A taxable temporary difference leads to the payment of: Reading required:            Learning objective 13.5: calculate and account for deferred income tax.Group of answer choicesmore tax in the future and gives rise to a deferred tax asset.less tax in the future and gives rise to a deferred tax liability.more tax in the future and gives rise to a deferred tax liability.less tax in the future and gives rise to a deferred tax asset.