Philippine Conceptual Framework and Accounting Standards Quiz

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Questions and Answers

What is the tax base in accounting?

The total assets of the company
The amount of asset or liability that is taxable (correct)
The total income before taxes
The amount of tax paid in the previous year

What is the purpose of deferred tax income?

To reduce current tax liabilities
To balance out current tax expenses
To account for future tax savings due to temporary differences (correct)
To increase current tax assets

When can deferred tax assets and liabilities be offset according to PAS 12?

When there are temporary differences in tax payments
When there is a legally enforceable right to offset current tax and liability (correct)
When the tax authority allows it without conditions
When the company prefers to offset them for simplicity

What does current tax asset represent in accounting?

<p>Excess tax payments over the current tax due (D)</p> Signup and view all the answers

What is the actual amount payable to the tax office known as?

<p>Current Income Tax (D)</p> Signup and view all the answers

Flashcards

Tax Base

The amount of asset or liability that is subject to taxation.

Deferred Tax Income

A future tax savings due to temporary differences between accounting income and taxable income. It basically means you'll pay less tax in the future because of how you're accounting for things differently right now.

Offsetting Deferred Tax Assets and Liabilities

A legally enforceable right to offset current tax liabilities with current tax assets.

Current Tax Asset

The excess tax payments made over the actual tax due for a period.

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Current Income Tax

The real amount that needs to be paid to the tax authorities.

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Study Notes

Taxation in Accounting

The tax base in accounting refers to the amount of taxable income or profits that are subject to taxation.

Deferred Tax

Deferred tax income is a liability that represents the amount of tax payable in the future, arising from temporary differences between the accounting and tax bases of assets and liabilities.
The purpose of deferred tax income is to match the tax expense with the accounting period in which the related transaction is recognized.

Offset of Deferred Tax Assets and Liabilities

According to PAS 12, deferred tax assets and liabilities can be offset when they relate to the same taxing authority and are expected to be realized or settled simultaneously.

Current Tax Asset

A current tax asset represents the amount of taxes already paid or payable to the tax authorities, and is expected to be recovered from the tax authorities in the same accounting period.

Actual Amount Payable to the Tax Office

The actual amount payable to the tax office is known as the tax payable or tax liability.

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Description

This quiz provides an overview of the conceptual framework and accounting standards, including the Philippine Conceptual Framework and Accounting Standards. It covers topics essential for understanding accounting principles and practices.