Exam 2 Study Guide

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Exam 2 Study Guide


Pages:
3
Type:
Study Guide
School:
Illinois State University
Course:
Acc 232 - Intermediate Accounting II
Intermediate Accounting II Documents

Unformatted text preview:

Ch 19 & 20 Test 8-12 Multiple Choice 1 pension problem  2 years  Worksheet  Journal entry 1 Deferred taxes problem  Compute entry  Income statement  Balance sheet  No tax timing  Permanent differences Chapter 19 Pretax Financial income-financial reporting item; income before taxes; income for financial reporting purposes; income for book purchases; determined according to GAAP; leads to income tax expense Taxable income-income for tax purposes; tax accounting term; amount used to compute income taxes payable; determined according to IRS tax code; leads to income tax payable Difference between income tax expense and income taxes payable is the deferred tax amount. Classified as either deferred tax liability, or a deferred tax asset Temporary difference-difference between the tax basis of an asset or liability and its reported (carrying or book) amount in the financial statements, which will result in taxable amounts or deductible amounts in future years Taxable amounts increase taxable income in future years. Deductible amounts decrease taxable income in future years Deferred tax liability-represents the increase in taxes payable in future years as a result of taxable temporary differences existing at the end of the current year Current tax expense-amount of income taxes payable for the period Deferred tax expense-increase in the deferred tax liability balance from the beginning to the end of the accounting period ACC 232



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