ACC 311 Final Exam Multiple Choice
Questions With Correct Answers
Already Passed!!1
Income tax expense is based on:
a) pretax income
b) taxable income
c) income from continuing operations
d) operating income CORRECT ANSWERS a) pretax income
Deferred tax expense is the:
a) decrease in a deferred tax liability.
b) increase in a deferred tax liability.
c) amount of income taxes payable for the period.
d) increase in a deferred tax asset. CORRECT ANSWERS b) increase in a deferred tax
liability.
A deferred tax liability represents the:
a) increase in taxes payable in future years as a result of taxable temporary differences.
b) increase in taxes saved in future years as a result of deductible temporary
differences.
c) decrease in taxes saved in future years as a result of deductible temporary
differences.
d) decrease in taxes payable in future years as a result of taxable temporary
differences. CORRECT ANSWERS a) increase in taxes payable in future years as a
result of taxable temporary differences.
A deferred tax valuation allowance account is used to recognize a reduction in:
a) a deferred tax asset only.
b) a deferred tax liability only.
c) income tax expense.
d) both a deferred tax asset and a deferred tax liability. CORRECT ANSWERS a) a
deferred tax asset only.
Tax rates other than the current tax rate may be used to calculate the deferred income
tax amount for financial statement reporting if:
a) it is probable that a future tax rate change will occur.
b) it appears likely that a future tax rate will be greater than the current tax rate.
c) it appears likely that a future tax rate will be less than the current tax rate.
d) the enacted tax rate is expected to apply in future years. CORRECT ANSWERS d)
the enacted tax rate is expected to apply in future years.
, Which of the following statements related to loss carrybacks and carryforwards is
correct?
a) The benefit due to a loss carryforward can be reported in both the loss year and
future years.
b) The benefit due to a loss carryback is reported only in the second year preceding the
loss year.
c) The benefit due to a loss carryforward is reported only in the loss year.
d) The benefit due to a loss carryback can be reported in both the loss year and future
years. CORRECT ANSWERS a) The benefit due to a loss carryforward can be reported
in both the loss year and future years.
A deferred tax liability represents the:
a) increase in taxes payable in future years as a result of taxable temporary differences.
b) decrease in taxes payable in future years as a result of taxable temporary
differences.
c) increase in taxes saved in future years as a result of deductible temporary
differences.
d) decrease in taxes saved in future years as a result of deductible temporary
differences. CORRECT ANSWERS a) increase in taxes payable in future years as a
result of taxable temporary differences.
A deferred tax asset represents the:
a) increase in taxes saved in future years as a result of deductible temporary
differences.
b) decrease in taxes saved in future years as a result of deductible temporary
differences.
c) increase in taxes payable in future years as a result of deductible temporary
differences.
d) decrease in taxes payable in previous years as a result of cumulative temporary
differences. CORRECT ANSWERS a) increase in taxes saved in future years as a
result of deductible temporary differences.
A deferred tax asset represents a:
a) future tax liability.
b) future tax expense.
c) future taxable amount.
d) future tax benefit. CORRECT ANSWERS d) future tax benefit.
A deferred tax valuation allowance account is used to recognize a reduction in:
a) both a deferred tax asset and deferred tax liability.
b) a deferred tax asset only.
c) a deferred tax liability only.
d) income tax expense. CORRECT ANSWERS b) a deferred tax asset only.
Questions With Correct Answers
Already Passed!!1
Income tax expense is based on:
a) pretax income
b) taxable income
c) income from continuing operations
d) operating income CORRECT ANSWERS a) pretax income
Deferred tax expense is the:
a) decrease in a deferred tax liability.
b) increase in a deferred tax liability.
c) amount of income taxes payable for the period.
d) increase in a deferred tax asset. CORRECT ANSWERS b) increase in a deferred tax
liability.
A deferred tax liability represents the:
a) increase in taxes payable in future years as a result of taxable temporary differences.
b) increase in taxes saved in future years as a result of deductible temporary
differences.
c) decrease in taxes saved in future years as a result of deductible temporary
differences.
d) decrease in taxes payable in future years as a result of taxable temporary
differences. CORRECT ANSWERS a) increase in taxes payable in future years as a
result of taxable temporary differences.
A deferred tax valuation allowance account is used to recognize a reduction in:
a) a deferred tax asset only.
b) a deferred tax liability only.
c) income tax expense.
d) both a deferred tax asset and a deferred tax liability. CORRECT ANSWERS a) a
deferred tax asset only.
Tax rates other than the current tax rate may be used to calculate the deferred income
tax amount for financial statement reporting if:
a) it is probable that a future tax rate change will occur.
b) it appears likely that a future tax rate will be greater than the current tax rate.
c) it appears likely that a future tax rate will be less than the current tax rate.
d) the enacted tax rate is expected to apply in future years. CORRECT ANSWERS d)
the enacted tax rate is expected to apply in future years.
, Which of the following statements related to loss carrybacks and carryforwards is
correct?
a) The benefit due to a loss carryforward can be reported in both the loss year and
future years.
b) The benefit due to a loss carryback is reported only in the second year preceding the
loss year.
c) The benefit due to a loss carryforward is reported only in the loss year.
d) The benefit due to a loss carryback can be reported in both the loss year and future
years. CORRECT ANSWERS a) The benefit due to a loss carryforward can be reported
in both the loss year and future years.
A deferred tax liability represents the:
a) increase in taxes payable in future years as a result of taxable temporary differences.
b) decrease in taxes payable in future years as a result of taxable temporary
differences.
c) increase in taxes saved in future years as a result of deductible temporary
differences.
d) decrease in taxes saved in future years as a result of deductible temporary
differences. CORRECT ANSWERS a) increase in taxes payable in future years as a
result of taxable temporary differences.
A deferred tax asset represents the:
a) increase in taxes saved in future years as a result of deductible temporary
differences.
b) decrease in taxes saved in future years as a result of deductible temporary
differences.
c) increase in taxes payable in future years as a result of deductible temporary
differences.
d) decrease in taxes payable in previous years as a result of cumulative temporary
differences. CORRECT ANSWERS a) increase in taxes saved in future years as a
result of deductible temporary differences.
A deferred tax asset represents a:
a) future tax liability.
b) future tax expense.
c) future taxable amount.
d) future tax benefit. CORRECT ANSWERS d) future tax benefit.
A deferred tax valuation allowance account is used to recognize a reduction in:
a) both a deferred tax asset and deferred tax liability.
b) a deferred tax asset only.
c) a deferred tax liability only.
d) income tax expense. CORRECT ANSWERS b) a deferred tax asset only.
