Which Statement Is Correct About the "Taxes Payable Method

question 7

Multiple Choice

Which statement is correct about the "taxes payable method"?

• A)It is the accounting method used under both ASPE and IFRS.
• B)It records an amount for income tax equal to the tax payments required.
• C)It matches income with the associated income tax expense.
• D)It records an amount for income tax equal to the net income before tax.

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Definitions:

Equity Method

An accounting technique used to record investments in other companies, recognizing the investor's share of the investee's net income.

Parent Company

A company that holds enough voting stock in another firm to control management and operations by influencing or electing its board of directors.

Consolidated Financial Statements

Financial reports that combine the accounts of a parent company and its subsidiaries into a single document.

Fair Value Method

An accounting approach used to measure assets and liabilities at estimates of their current value, rather than at historical cost or intrinsic value.