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Flashcards in Interperiod Tax Allocation Basics Deck (8)
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1
Q

What is the principle of recognizing income tax expense through the year called?

A

Interperiod Tax Allocation

2
Q

Define “deferred income tax”

A

The amount of income tax expense that is not currently due

3
Q

Define “deferred income tax provision”

A
  1. )The amount of income tax expense that is not currently due;
  2. )Equals the net sum of the change in the deferred tax accounts.
4
Q

Define “taxable income”

A

Income before tax for tax purposes

5
Q

Define “income tax liability”

A

The amount of income tax the firm must pay on taxable income for a year

6
Q

Define “pretax accounting income”

A

Income before income tax for financial accounting purposes determined by applying GAAP

7
Q

Define “income tax expense”

A

The account reported in the income statement that measures the income tax cost for the year’s transactions. It is the net sum of the income tax liability, net change in the deferred tax accounts

8
Q

Define “current income tax provision”

A

The amount of income taxes due for the year (same as income tax liability).

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