1. PAS 37 / IAS 37 states that a provision does not arise from A. Restructuring B....
Question:
1. PAS 37 / IAS 37 states that a provision does not arise from
A. Restructuring
B. Future operating losses
C. Product warranties
D. Constructive obligation
2. Liabilities arise from either legal or constructive obligation. Which of the following is a source of constructive obligation
A. Contract
B. Law
C. Quasi-contract
D. An established pattern of past practice.
3. Kim Corp. reports an income tax expense of P1,000 and a current tax expense of P800 during the period. The difference between these amounts is best described as
A. Deferred tax expense.
B. Deferred tax income.
C. Deferred tax liability.
D. Deferred tax asset.
4. Lee Corp. computes a current tax expense of P700 using relevant tax laws. If the change in deferred tax assets exceeds the change in deferred tax liabilities during the period by P100, Lee's income tax expense is
A. P800
B. P600
C. P700
D. None of these
5. Which of the following is not correct regarding the recognition of a deferred tax asset or a deferred tax liability?
A. A deferred tax liability will ultimately result to a higher tax payment in a
future period.
B. A deferred tax asset is expected to cause a reduction in the tax payment in a future period.
C. Recognizing deferred tax assets and liabilities results to proper matching of
items in the financial
D. Recognizing a deferred tax asset reduces the tax payment in the current
period, below the amount that would have to be paid if only the tax laws are
used to compute for the tax due.
6. If the economic benefits from an asset will not be taxable when they are recovered, the tax base of the asset is equal to
A. Its carrying amount
B. Zero
C. A or B
D. Neither A nor B
7. Which of the following is correct regarding the presentation of deferred tax assets and deferred tax liabilities in the statement of financial position?
A. Deferred tax assets and deferred tax liabilities are presented as either current
or non-current items depending on their expected reversal dates.
B. Deferred tax assets and deferred tax liabilities are generally offset unless
they qualify for separate presentation.
C. Deferred tax assets and deferred tax liabilities are generally presented
separately unless they qualify for offsetting.
D. Deferred tax assets and deferred tax liabilities are off-balance sheet items,
meaning they are not recognized but disclosed only in the notes
8. If it is probable that recovery or settlement of a carrying amount of an asset or liability will make future tax payments larger than they would be if such recovery or settlement were to have no tax consequences, an entity shall recognize a
A. Deferred tax asset.
B. Deferred tax liability,
C. A or B
D. Neither A nor B
9. Income computed using PFRS's is P100,000 while income computed using tax laws is P80,000. The P20,000 difference is a
A. Taxable temporary difference
B. Deductible temporary difference
C. Permanent difference
D. No difference
10. During the period, deferred tax assets increase by P500 while deferred tax liabilities increase by P600. The net change of P100 is a
A. Deferred tax expense
B. Deferred tax income
C. Deferred tax liability
D. Deferred tax asset
11. If the change in deferred tax asset exceeds the change in deferred tax liability during the period, the net change is referred to as
A. Deferred tax expense.
B. Deferred tax income.
C. Current tax benefit.
D. Deferred tax asset.
12. PAS 37/ IAS 37 states that, contingent liabilities are
A. Recognized and disclosed
B. Always disclosed
C. Disclosed only, if their expected occurrence is probable
D. Not disclosed if their expected occurrence is remote.