Chapter 16 Quiz - ACCT 405 - Glenski

Which of the following computations is required related to accounting for income taxes?
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Terms in this set (20)
The deferred tax asset's valuation allowance account is reported on the balance sheet as a(an):Contra assetTax rates occasionally change. When this occurs after the deferred tax accounts have been recorded, Generally Accepted Accounting Principles require that:all deferred tax accounts be adjusted to reflect the new tax ratesUnder current tax law a net operating loss typically may be carried forward up to:indefinitelyAssuming no other deferred tax items exist in a particular year, a net operating loss (NOL) carryforward will be shown in the balance sheet at the end of the NOL year as:A noncurrent deferred tax assetFor reporting purposes, current deferred tax assets and current deferred tax liabilities for the same company and tax jurisdiction are:Combined with noncurrent deferred tax assets and noncurrent deferred tax liabilities in the balance sheet to show a single net noncurrent amount.Tax rates change occasionally. The effect of this:Is reflected in income from continuing operations.Recognizing tax benefits in a loss year due to a net operating loss carryforward requires:Creating a deferred tax assetIf a business has a net operating loss carryover:A deferred tax asset is recorded along with any applicable valuation allowance.Related to the individual components of a company's income tax expense, the financial statement disclosure:Usually is included in the disclosure notes.T/F: A net operating loss (NOL) carryforward creates a deferred tax liability that should be classified as current to the extent that the NOL will be recovered in the following year.False