Expense is recorded financial reporting purpose

Assignment Help Financial Accounting

Reference no: EM134044739

Question

1. A revenue is recorded for tax purposes but not for financial reporting purposes. II. An expense is recorded financial reporting purposes but not for tax purposes.

a. both I and II will give rise to reporting a deferred tax asset on the balance sheet

b. only I give rise to reporting a deferred tax asset on the balance sheet

c. only II will give rise to reporting a deferred tax asset on the balance sheet

d. Neither I or II will give rise to reporting a deferred tax asset on the balance sheet

2. John has $10mil of deferred revenue-subscription on 12/31. John recognizes income for tax purposes when cash is collected. Tax rate is 25%. It's 12/31 Balance sheet should include a:

a. Deferred tax asset $2,500,000

b. Deferred tax asset $7,500,000

c. Deferred tax liability $2,500,000

d. Deferred tax liability $7,500,000

3. 12/31/2019, Paul had a deferred tax asset of $100,000 and believed it was not more likely than not that it could realize any of the deferred tax asset. On 12/31:

a. The net deferred tax asset aount is 100k

b. The valuation allowance - DTA has debit balance of 100k

c. The valuation allowance - DTA has credit balance of 100k

d. The deferred tax asset has a balance of zero

Reference no: EM134044739

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