Question 18 of 30.Distributablenet income (excluding tax-exempt intO Serves as the upper limit on the amount of the IncoOWill always equal fiduciary accounting income.O Usually includes capital gains and losses.Is calculated on Schedule A (Form 1041).

Distributable Net Income The amount of a trust's income allocated to the beneficiaries is known as…

Answered: Question 18 of 30. Distributable net…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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18. Current Attempt in Progress Taxable income of a corporation differs from pretax financial income because of PermanentDifferences TemporaryDifferences Yes No Yes Yes No No No Yes
3 What is income tax payable? O A company's liability, based on profitability, that is paid in advance to the government O A payment to a company, based on profitability, that is paid in advance from the government A payment to a company, based on profitability, to be paid from the government O A company's liability, based on profitability, to be paid to the government
16. Which of the following is NOT correct? a.Tax credits may be refundable or non-refundable. b. Income from capital related transactions is an example of an exempt income for income tax purposes. c.Tax credits are tax previously paid, or an amount used to reduce tax liability if certain conditions are met. d.Tax Relief is income that is not subject to tax.
Question 11: Which statement about calculating taxable earnings for Social Security tax is accurate? Answer: A. 401(k) contributions are taxable for Social Security tax and are subtracted from gross pay when calculating taxable earnings for that tax. В. O 401(k) contributions are taxable for Social Security tax and are not subtracted from gross pay when calculating taxable earnings for that tax. С. O 401(k) contributions are not taxable for Social Security tax and are subtracted from gross pay when calculating taxable earnings for that tax. D. O 401(k) contributions are not taxable for Social Security tax and are not subtracted from gross pay when calculating taxable earnings for that tax.
Question 8: Collectively, Social Security tax and Medicare tax are referred to as FICA taxes. Answer: A. O True В. O False
The tax law refers to gross income, yet the term gross income is not found on Form 1040. Explain.
Explain four main reasons expenses may not be deductible for incometax/corporation tax purposes. Regards
Ability-to-pay principle supports that tax should be * A. Proportionate in character B. Levied for public purpose C. Levied by the lawmaking body of the state D. Levied on persons and properties within the limits
QUESTION 13 The practice of including the income tax effect of a particular transaction with the transaction itself on the income statement is known as intraperiod tax allocation. True False
20. A temporary difference arises when a revenue item is reported for tax purposes in a period After it is reportedin financial income Before it is reportedin financial income No Yes No No Yes No Yes Yes
1 contiune Listed below are items that are commonly accounted for differently for financial reporting purposes than they are for tax purposes.For each item below, indicate whether it involves: 1. A temporary difference that will result in future deductible amounts and, therefore, will usually give rise to a deferred income tax asset. 2. A temporary difference that will result in future taxable amounts and, therefore, will usually give rise to a deferred income tax liability. 3. A permanent difference. (e) Installment sales of investments are accounted for by the accrual method for financial reporting purposes and the installment method for tax purposes.(f) For some assets, straight-line depreciation is used for both financial reporting purposes and tax purposes, but the assets’ lives are shorter for tax purposes.(g)…
Question 12: State income tax withholding calculations differ from one state to another. Answer: А. True В. False

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Question 18 of 30. Distributable net income (excluding tax-exempt ir Serves as the upper limit on the amount of the In O Will always equal fiduciary accounting income