Accounting for Income Tax

The flashcards cover key concepts from the lecture on accounting for income tax, including definitions, classifications of differences, and specific income tax regulations.

Accounting profit before tax is calculated as __________.

Accounting income less accounting expenses.

Taxable profit is calculated as __________.

Assessable income less allowable deductions.

Permanent differences between accounting profit and taxable profit include __________.

Revenues exempt from tax.

Temporary differences occur when __________.

Some revenues not yet received are not assessable until a future period.

Entertainment expenses are an example of __________ differences.

Permanent differences.

The formula for calculating income tax expense is __________.

Income tax rate multiplied by adjusted accounting profit.

A difference resulting from anticipated bad debts in income tax accounting is recognized as a __________ asset.

Deferred Tax Asset (DTA).

In contrast, when more tax is owed than income tax expense recorded, this results in a __________.

Deferred Tax Liability (DTL).

Tax losses occur when __________ exceed taxable income.

Allowable deductions.

The journal entry to create carry-forward tax losses includes a debit to __________.

Deferred tax asset.

For tax purposes, the deduction for bad debts is based on __________.

The amount written off.

The accounting profit for the year ended 30 June 2020 was __________.

$250,000.

The company's tax rate is __________ percent.

30 percent.

Provision for warranties results in __________ tax deductions when the company pays for warranties.

Allowable.

The carrying amount and tax base of an asset must be compared to identify __________.

Temporary differences.

In cases where the tax basis is less than the carrying amount, it leads to __________ differences.

Taxable temporary differences (TTD).

Goodwill will result in __________ deductions for tax purposes.

No future tax deductions.

Prepaid expenses must be recognized for tax purposes when __________.

Cash is paid.

The amount deductable for tax purposes becomes available when the expense is __________.

Actually paid.

The accounting treatment of income tax is governed by __________.

AASB 112.

Deferred tax assets are recognized only if __________.

There are sufficient taxable temporary differences.

The current tax expense must be disclosed according to __________.

AASB 112/IAS 12.

If the recognition criteria for a deferred tax asset are not met at the end of a period, the __________ must be written off.

Existing balance of the deferred tax asset.

Plant depreciation for accounting purposes is based on __________.

Estimated useful life.

The current period tax liability must be calculated based on __________ adjustments.

Permanent and temporary.