38950039
Description
Flashcards by Kalie Carney, updated 8 months ago
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Created by Kalie Carney
8 months ago
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| Question | Answer |
| Book equivalent of taxable income | A company’s pretax income from continuing operations adjusted for permanent differences. |
| Cash tax rate | The tax rate computed by dividing a company’s taxes paid during the year by its pretax income from continuing operations. |
| Current income tax expense (benefit) | The amount of taxes paid or payable (refundable) in the current year. |
| Current tax liability (asset) | The amount of taxes payable (refundable) in the current year. |
| Deductible temporary differences | Book–tax differences that will result in tax deductible amounts in future years when the related deferred tax asset is recovered. |
| Deferred tax asset | The expected future tax benefit attributable to deductible temporary differences and carryforwards. |
| Deferred tax liability | The expected future tax cost attributable to taxable temporary differences. |
| Effective tax rate | The taxpayer’s average rate of taxation on each dollar of total income (taxable and nontaxable income). |
| Enacted tax rate | The statutory tax rate that will apply in the current or a future period. |
| Income tax provision | Refers to the income tax expense or (benefit) reported on a company’s financial statement and is composed of the current income tax expense or (benefit) and the deferred income tax expense or (benefit). These components may also be referred to as the current income tax provision and the deferred tax provision, respectively. |
| Permanent book–tax differences | Items of income or deductions for either book purposes or tax purposes during the year but not both. Permanent differences do not reverse over time, so over the long run, the total amount of income or deduction for the item is different for book and tax purposes. |
| Structural tax rate | The tax rate computed by dividing a company’s income tax provision adjusted for nonrecurring permanent differences by its pretax income from continuing operations. |
| Tax accounting balance sheet | A balance sheet that records a company’s assets and liabilities at their tax bases instead of their financial accounting bases. |
| Tax carryovers | Tax deductions or credits that cannot be used on the current-year tax return and that can be carried forward to reduce taxable income or taxes payable in a future year. |
| Taxable temporary differences | Book–tax differences that will result in taxable amounts in future years when the related deferred tax liability is settled. |
| Temporary book–tax differences | Book–tax differences that reverse over time such that, over the long term, corporations recognize the same amount of income or deductions for the items on their financial statements as they recognize on their tax returns. |
| Uncertain tax position | A tax return position for which a corporation does not have a high degree of certainty as to its tax consequences. |
| Valuation allowance | The portion of a deferred tax asset for which management determines it is more likely than not that a tax benefit will not be realized on a future tax return. |
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