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26.07.2022 - 16:17

What is true when income for tax purposes is higher than accounting income? (a) Actual income taxes payable will be the same as accounting income tax expense (b) Actual income taxes payable will be higher than accounting income tax expense (c) Actual inco

Question:

What is true when income for tax purposes is higher than accounting income?

(a) Actual income taxes payable will be the same as accounting income tax expense

(b) Actual income taxes payable will be higher than accounting income tax expense

(c) Actual income taxes payable will be lower than accounting income tax expense

(d) Actual income taxes expense is the same as actual income tax payable.

Answers (1)

Mckinley April 7, 2023 в 17:18

The answer is (b) Actual income taxes payable will be higher than accounting income tax expense. This is because when income for tax purposes is higher than accounting income, the company will have to pay taxes on the higher amount. However, the accounting income tax expense was calculated based on the lower accounting income, therefore the actual income taxes payable will be higher than the accounting income tax expense.

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