Accountants who favor interperiod income tax allocation argue that income taxes are an expense...
Question:
Accountants who favor interperiod income tax allocation argue that income taxes are an expense rather than a distribution of earnings. Explain the significance of this argument. Do not explain the definitions of expense or distribution of earnings.
Tax-free earnings
The income earned by an individual but has not had an obligation to pay taxes on the same income is called tax-free earnings. The tax-free earnings are the benefit given to the general public to save the charges to be paid to the government.
Answer and Explanation: 1
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View this answerThe inter period tax allocation is the expense payable by the business as the tax at the end of the accounting year. It is not considered the...
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Interperiod Tax Allocation: Permanent & Temporary Differences
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Chapter 8 / Lesson 4
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Interperiod tax allocation varies based on permanent or temporary differences and often results from differences in generally accepted accounting principles, or GAAP, and tax accounting. Study examples of interperiod tax allocations and identify key differences between GAAP and tax accounting.
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