Situations Which Require That Future Income Tax Be Reported Involve

question 145

Multiple Choice

Situations which require that future income tax be reported involve a difference that is called which of the following?

• A) A permanent difference.
• B) A reversing tax inverse difference.
• C) A temporary difference.
• D) A contingent liability.

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Definitions:

Accumulated Depreciation

The total amount of a tangible asset's cost that has been allocated as depreciation expense over its useful life.

Cash Dividends

Payments made by a corporation to its shareholder members, typically in the form of cash, as a distribution of profits.

Accounts Receivable

Money owed to a company by its customers from sales or services rendered on credit.

Income Tax Payable

A liability account on a company's balance sheet representing the taxes owed to the government but not yet paid.