Current Tax Consequences of Business Operations Are Recognised As

question 19

Multiple Choice

Current tax consequences of business operations are recognised as:

• A) a current liability for income tax payable.
• B) a non-current liability for taxes payable.
• C) a contingent liability for taxes payable.
• D) a deferred liability for income tax payable.

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Definitions:

Perpetual Inventory System

A perpetual inventory system is a method of accounting for inventory that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

Gross Method

An accounting approach to recording purchases at their full invoice amount without deducting any cash discounts offered.

Merchandise Return

The process of a customer returning previously purchased goods to the seller, often due to defects or unsatisfaction, which may result in a refund or replacement.

Gross Method

An accounting method for recording purchases at the total invoice cost without deducting any cash discounts at the time of purchase.