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PAS 12 Answer Keys

The document discusses key concepts related to accounting for income taxes under PAS 12 including definitions of temporary differences, taxable profit, tax base, timing differences, deferred tax assets and liabilities. It provides examples of these concepts and asks multiple choice questions to test understanding.

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742 views2 pages

PAS 12 Answer Keys

The document discusses key concepts related to accounting for income taxes under PAS 12 including definitions of temporary differences, taxable profit, tax base, timing differences, deferred tax assets and liabilities. It provides examples of these concepts and asks multiple choice questions to test understanding.

Uploaded by

jhonrievelasco
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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1.

Those that result to future taxable amounts when the carrying amount of the asset or liability is
recovered or settled. – Taxable Temporary Differences
2. Taxable temporary difference multiplied by the _______ results to deferred tax liability. – Tax
Rate
3. This discrepancy typically arises from the fact that revenue or expenses are recorded for tax
reasons at a later date than they are for financial reporting purposes. -Deductible
Temporary Differences
4. Income tax expense in Statement of Comprehensive Income is computed using? - PFRSs
5. Permanent differences usually arise from? – Dividend Income
6. It is computed using tax laws. - Current tax expense
7. Deferred tax liability is recognized for all ________. - Taxable temporary differences
8. Current tax expense in the ________ is computed using Philippine Tax Laws. - Income Tax
Return
9. Those that do not have future tax consequences.- Permanent differences
10. The amounts of income taxes recoverable in future periods.- Deferred Tax Assets
11. The amount that will be deductible for tax purposes against any taxable economic benefits that
will flow to an entity when it recovers the carrying amount of asset. -Tax Base of an Asset

12. Profit or loss for a period, determined in accordance with the rules established by the
taxation authorities, upon which income taxes are payable or recoverable.- Taxable Profit/
Tax Loss
13. Its carrying amount, less any amount that will be deductible for tax purposes in respect of that
liability in future periods.- Tax Base of a Liability
14. It prescribes the accounting for income taxes.- PAS 12
15. These are the excess tax payments over the current tax due. An example to this is prepaid
income tax.- Current Tax Asset
16. The ___________ of an asset or liability is the amount attributed to that asset or liability for tax
purposes.- Tax Base
17. Profit or loss for a period before deducting tax expense.- Accounting Profit
18.Arises when income and expenses are recognized for financial reporting purposes in one period
but are recognized for taxation purposes in another period.- Timing Differences
19. In deductible temporary differences, financial income is greater than taxable income.- FALSE
(less than)
20.Permanent differences arise when income and expenses enter in the computation of either
accounting profit, taxable profit, or temporary differences.- FALSE (either accounting profit
or taxable profit)
21. PAS 12 prohibits the discounting of deferred tax assets and liabilities.- TRUE
22. Timing differences arise when asset and liabilities are recognized for financial reporting purposes
in one period but are recognized for taxation purposes in another period.- FALSE (income and
expenses)
23. Current and deferred taxes are usually recognized in profit or loss.- TRUE
24. Accounting profit is usually computed by deducting the total expenses and tax expense to the
total income.- FALSE (total income less total expenses, excluding tax expenses)
25. Temporary differences are differences between the carrying of an asset or liability in the
statement of financial performance and its tax base.- FALSE (financial position)
26. When taxable temporary differences reverses in the future period, it results to higher tax
payment.- TRUE
27. Tax consequences are accounted for in a different way as the related transactions or events.-
FALSE (same way)
28. Deferred tax liability is not recognized when it arise from the initial recognition of goodwill.-
TRUE

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