Onyx Company's Income Statement Shows Net Income Before Income Tax

question 46

Multiple Choice

Onyx Company's income statement shows net income before income tax of $38,000. The company's tax return shows taxable income of $34,000. Company's tax rate is 40%. Which of the following entries would be used to record tax expense and tax payable?

• A) Debit Income tax expense $15,200 and credit Cash $15,200.
• B) Debit Deferred tax liability $13,600 and credit Income tax payable $13,600.
• C) Debit Income tax expense $15,200, credit Deferred tax liability $1,600 and credit Income tax payable $13,600.
• D) Debit Deferred tax liability $1,600, debit Income tax expense $13,600 and credit Income tax payable $15,200.

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Definitions:

Disjunction

An operation in logic that results in true if one or more of the inputs are true.

Tautology

A statement in logic that is true in every possible interpretation or a redundant statement that doesn't provide additional information.

Antecedent

the clause or phrase in a conditional statement that represents the condition, often preceding the consequent which is the outcome.

Self-Contradiction

A statement or proposition that contradicts itself, implying both a statement and its denial at the same time.