Chapter 10

Question 1

Current liabilities (accounts payable) should be recorded at

Answer 1

net settlement value

Question 2

Row should the sale of a gift certificate be recognized?

Answer 2

Credit to deferred revenue

Question 3

The asset-and-liability approach to income taxes accounts for

Answer 3

1. income taxes currently payable or deductible

2. deferred taxes

Question 4

Income tax expense (benefit) is allocated to

Answer 4

1. Continuing operations,
2. Discontinued operations,
3. Other comprehensive income
4. Items debited or credited directly to equity.

Question 5

Define deferred tax asset

Answer 5

Income under GAAP is less than taxable income

Question 6

Define deferred tax liability

Answer 6

Income under GAAP is more than taxable income

Question 7

The following are required disclosures for DTA/DTL

Answer 7

1. Total deferred tax liabilities and total deferred tax assets
2. Total DTA valuation allowance and the net annual change in it
3. Tax effect of each TD or carryforward resulting in a significant deferred tax amount (by public entities only)
4. A nonpublic entity must disclose only the types of significant TDs and carryforwards.
   The significant components of income tax expense related to continuing operations

Question 8

What do you do with checks cut but not sent out at year end?

Answer 8

They need to be added back into accounts payable

Question 9

Callable debts are classified as current or non current liabilities

Answer 9

current