Questions

1.Deferred tax liability represents an increase in taxes payables in future years as a results of taxable temporary differences existing at the end of the current year.

Select one

• True
• False

2.Current tax consequences for a business give rise to.

• A. a non-current liability
• B. a deferred liability
• C. contingent liability for tax payable
• D. current liability for tax payable

3.Which among the following is a progressive tax?

• A. Sales Tax
• Dividend Tax
• C. Income Tax
• Customs duty

4.The deferred tax estimate will change if the tax rate changes and the opening balances will be recalculated. This will results in a.

• A. no changes are made
• B. change in accounting estimate
• C. change in prior period error
• D. change in accounting policy

5.A Ltd has an asset which cost R 40 000 against which deprecation of R20000 has been accumulated. Wear and Tear is R 28000. Company tax is 28%. The tax base of the assets is

• A. R3 600
• B. R 4 000
• C. R 8 000
• D. R12 000