(Objectives and Principles for Accounting for Income Taxes) The amount of income taxes due to the government for a period of time is rarely the amount reported on the income statement for that period as income tax expense.

Instructions

(a) Explain the objectives of accounting for income taxes in general purpose financial statements.

(b) Explain the basic principles that are applied in accounting for income taxes at the date of the financial statements to meet the objectives discussed in (a).

(c) List the steps in the annual computation of deferred tax liabilities and assets.