4. Which of the following differences would result in future taxable amounts? A. revenues or gains that are recognized in financial income but never included in taxable income. B. expenses or losses that are deductible before they are recognized in financial income. C. expenses or losses that are deductible after they are recognized in financial income. D. revenues and gains that are taxable before they are recognized in financial income. 5. The accounting recognition of the benefits for a tax loss carry forward in most situations should be reported as A. an item on the retained eamings statement, not income statement. B. a prior period adjustment in whichever year the benefit is realized. C. a deferred tax asset in the year in which the benefit is realized. D. a reduction of loss in the year of the loss. 6. Because Pinaasa Company uses different methods to depreciate equipment for financial statement and income tax purposes, Pinaasa has temporary differences that will reverse during the next year and add to taxable income. Deferred income taxes that are based on these temporary differences should be classified in Pinaasa's balance sheet as a A. contra account to non-current assets C. non-current liabilities

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

An unused tax loss will arise when:   a. Expenses deductible for tax purposes are less than the taxable income   b. Expenses deductible for tax purposes exceeds the taxable income.   c. Expenses deductible for tax purposes are equal to the taxable income   d. Expenses deductible for tax purposes do not exist.

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)…