Quiz 16.01 – T/F Reversal of Temporary Differences
Intermediate Accounting
Spiceland, Nelson, and Thomas
10th Edition
Temporary differences originate in a single period and then reverse in future periods.
Temporary differences originate in a single period and then reverse in future periods.
The creation of deferred tax liabilities results from expenditures that are currently deducted in the tax return but not included in the income statement until future years.
Deferred tax assets and liabilities represent the tax impact of temporary differences between the financial carrying value and the tax basis of an asset or liability.
Deferred tax assets are created as a result of collecting rent in advance.
MACRS depreciation commonly results in the creation of deferred tax liabilities in the initial years of an asset’s life.
Deferred tax assets typically arise from future taxable amounts.
True or False: To decide whether to record a valuation allowance for a deferred tax asset, it is essential to assess whether future taxable income will be adequate to realize the tax benefit.
How should the components of income tax expense be disclosed on financial statements?
Valuation allowances have an impact on the calculation of deferred tax liabilities. True or False?
Enacted tax rate changes that are not effective in the current period do not impact deferred tax accounts until the new rates take effect.