Explain the Meaning and Significance of Each of the Following

question 11

Essay

Explain the meaning and significance of each of the following terms in accounting for company income tax:
(i)Tax payable method
(ii)Tax Allocation - the balance sheet approach
(iii)Deferred tax asset
(iv)Deferred tax liability
(v)Tax base
(vi)Permanent difference

Understand the differences between Keynesian and classical economic theories.

Recognize the concept of equilibrium GDP and its relation to full employment according to Keynes and the classicals.

Identify Say's Law and its significance in classical economics.

Explain the Keynesian critique of classical economics, specifically regarding savings, investment, and government intervention.

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Definitions:

Federal Income Taxes

The taxes levied by the IRS on the annual earnings of individuals, corporations, trusts, and other legal entities.

Operating Cycle

The average time period between purchasing or acquiring inventory and receiving cash from sales of the inventory.

Existing Current Assets

Current assets that have been on a company's balance sheet for an extended period and include cash, accounts receivable, inventory, and other short-term assets.

Voluntary Deductions

Optional deductions from an employee's paycheck, such as for health insurance or retirement savings plans.