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Flashcards in 14 Wrong Answers Deck (10):

When trying to calculate the current federal tax liability:

Depreciation deducted for tax purposes in excess of depreciation deducted for book purposes should be...

Subtracted from pretax book income


A deferred tax liability or asset is considered to be related to an asset or liability if...

Reduction of the asset or liability will cause the temporary
Difference to reverse


If the deferred tax liability or asset is not related to any asset or liability, it should be classified based on...

The timing of its expected reversal/utilization date


If a deferred tax liability is related to equipment which is Noncurrent, the deferred tax liability should...

Also be classified as a Noncurrent liability


Costs of guarantees and warranties are not deductible under the IRC until...



Costs of guarantees and warranties are estimated and recorded as...

An expense (loss) and liability in period of sale


The internal revenue code requires the direct write off method for bad debts, therefore bad debts can't be deducted until...

The debt becomes uncollectible and is written off


When no deduction is allowed in the current year this leads to...

A future deductible amount and is a deferred tax asset


How is goodwill treated for tax purposes?

Amortized for tax purposes


Goodwill is amortized for tax purposes and tested for impairment for GAAP purposes, therefore this would result in...

A temporary difference