Revenue received in advance, if the carrying amount is more than the tax base, it will be regarded as a deferred tax liability.

Select one

• True
• False

7. XYZ ltd has a taxable temporary difference of R 150 000. The income tax rate is 28%.XYZ ltd statement of financial position would reflect the following

• A. deferred tax liability of R 42 000
• B. deferred tax income of R 42 000
• C. deferred tax asset of R 42 000
• D. deferred tax expenses of R 42 000

8.The company tax rate prior to the budget speech was 28%. On 11 April 2014, The Minister of finance announced the reduction of tax rate to 25% from 1 July 2014. The financial statements for reporting period ending 28 February on 25 July 2014. 25% should be the tax rate applied.

Select one

• True
• False

9. A major distinction between permanent and temporary differences is that temporary differences reverse themselves in subsequent accounting periods, whereas permanent differences do not reverse.

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• True
• False

10. Dividends tax is calculated ta 20% of cash dividends received and it is based on amount levied on dividends received by shareholders.

Select one

• True
• False