Tax Accounting – Knowsia

ATP – Feb 2016 – L2 – Q2 – Tax Accounting Principles

Explain tax provisions for cash-basis and accrual-basis accounting under Internal Revenue Act, 2000 (Act 592).

Question

The application of tax accounting principles and taxation rules for determining income has been made flexible by Section 25(1) of the Internal Revenue Act, 2000 (Act 592), as amended which states that “Subject to this Act, for the purposes of ascertaining a person’s income accruing or derived during a basis period, the timing of inclusions and deductions shall be made according to generally accepted accounting principles.”

You are required to explain to a prospective investor the tax provisions regarding cash-basis accounting and accrual-basis accounting in the light of the above-mentioned provision of Act 592.

Answer

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Tags: Accrual Basis, Cash Basis, Income Tax, Tax Accounting, Tax Compliance
Level: Level 2

Topic: Tax Accounting Principles
Series: FEB 2016

AT – Nov 2014 – L3 – SB – Q2b – Corporate Tax Compliance and Reporting

Explain why tax charges differ from applicable rates and why tax payments differ between cash flows and profit statements.

Question

Mr. Ojoowuro, the director of a grocery store, has noticed that the tax charge for his company is N15 million on profits before tax of N105 million, resulting in an effective tax rate of 14.3%. Another company, Irin Plc, has an income tax charge of N30 million on a profit before tax of N90 million, resulting in an effective rate of 33.3%, yet both companies state that the rate of income tax applicable to them is 25%. Mr. Ojoowuro has also noticed that in the statements of cash flows, both companies have paid the same amount of tax of N24 million.

Required:
Advise Mr. Ojoowuro on the possible reasons why the income tax charge in the financial statements as a percentage of the profit before tax may not be the same as the applicable income tax rate and why the tax paid in the statement of cash flows may not be the same as the tax charge in the statement of profit or loss and other comprehensive income.

Answer

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Tags: Cash Flow Statement, Effective Tax Rate, Income Tax Rates, Tax Accounting
Level: Level 3

Topic: Corporate Reporting and Compliance
Series: NOV 2014

FA – May 2012 – L1 – SA – Q38 – Recording Financial Transactions

Identifying the closing balance to be shown in the company’s statement of financial position from the income tax account.

Question

The Income Tax Account of Wazobia Limited showed a balance of N50,000 on 1 January 2011. Tax paid during the year was N45,000 and the estimated tax based on current year’s account is N60,000

What is the amount to be shown in the company’s statement of financial position as the closing balance from the company’s Income Tax Account?

Answer

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Tags: Financial Position, Income Tax, Tax Accounting
Level: Level 1

FA – Nov 2023 – L1 – SB – Q1B – Roles of Accountants in Business and the Economy

Describe various types of accounting and their roles.

Question

Explain the various types of accounting and their respective roles in providing relevant information to different users of financial information.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cost Accounting, Financial Accounting, Management Accounting, Tax Accounting
Level: Level 1

Topic: Roles of Accountants in Business and the Economy
Series: NOV 2023

ATP – Feb 2016 – L2 – Q2 – Tax Accounting Principles

Explain tax provisions for cash-basis and accrual-basis accounting under Internal Revenue Act, 2000 (Act 592).

Question

You are required to explain to a prospective investor the tax provisions regarding cash-basis accounting and accrual-basis accounting in the light of the above-mentioned provision of Act 592.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Accrual Basis, Cash Basis, Income Tax, Tax Accounting, Tax Compliance
Level: Level 2

Topic: Tax Accounting Principles
Series: FEB 2016

AT – Nov 2014 – L3 – SB – Q2b – Corporate Tax Compliance and Reporting

Explain why tax charges differ from applicable rates and why tax payments differ between cash flows and profit statements.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cash Flow Statement, Effective Tax Rate, Income Tax Rates, Tax Accounting
Level: Level 3

Topic: Corporate Reporting and Compliance
Series: NOV 2014

FA – May 2012 – L1 – SA – Q38 – Recording Financial Transactions

Identifying the closing balance to be shown in the company’s statement of financial position from the income tax account.

Question

The Income Tax Account of Wazobia Limited showed a balance of N50,000 on 1 January 2011. Tax paid during the year was N45,000 and the estimated tax based on current year’s account is N60,000

What is the amount to be shown in the company’s statement of financial position as the closing balance from the company’s Income Tax Account?

Answer

Find Related Questions by Tags, levels, etc.

Tags: Financial Position, Income Tax, Tax Accounting
Level: Level 1

FA – Nov 2023 – L1 – SB – Q1B – Roles of Accountants in Business and the Economy

Describe various types of accounting and their roles.

Question

Explain the various types of accounting and their respective roles in providing relevant information to different users of financial information.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cost Accounting, Financial Accounting, Management Accounting, Tax Accounting
Level: Level 1

Topic: Roles of Accountants in Business and the Economy
Series: NOV 2023

Question Tag: Tax Accounting

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ATP – Feb 2016 – L2 – Q2 – Tax Accounting Principles

Explain tax provisions for cash-basis and accrual-basis accounting under Internal Revenue Act, 2000 (Act 592).

AT – Nov 2014 – L3 – SB – Q2b – Corporate Tax Compliance and Reporting

Explain why tax charges differ from applicable rates and why tax payments differ between cash flows and profit statements.

FA – May 2012 – L1 – SA – Q38 – Recording Financial Transactions

Identifying the closing balance to be shown in the company’s statement of financial position from the income tax account.

FA – Nov 2023 – L1 – SB – Q1B – Roles of Accountants in Business and the Economy

Describe various types of accounting and their roles.

ATP – Feb 2016 – L2 – Q2 – Tax Accounting Principles

Explain tax provisions for cash-basis and accrual-basis accounting under Internal Revenue Act, 2000 (Act 592).

AT – Nov 2014 – L3 – SB – Q2b – Corporate Tax Compliance and Reporting

Explain why tax charges differ from applicable rates and why tax payments differ between cash flows and profit statements.

FA – May 2012 – L1 – SA – Q38 – Recording Financial Transactions

Identifying the closing balance to be shown in the company’s statement of financial position from the income tax account.

FA – Nov 2023 – L1 – SB – Q1B – Roles of Accountants in Business and the Economy

Describe various types of accounting and their roles.

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Question Tag: Tax Accounting

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ATP – Feb 2016 – L2 – Q2 – Tax Accounting Principles

Explain tax provisions for cash-basis and accrual-basis accounting under Internal Revenue Act, 2000 (Act 592).

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AT – Nov 2014 – L3 – SB – Q2b – Corporate Tax Compliance and Reporting

Explain why tax charges differ from applicable rates and why tax payments differ between cash flows and profit statements.

You're reporting an error for "AT – Nov 2014 – L3 – SB – Q2b – Corporate Tax Compliance and Reporting"

FA – May 2012 – L1 – SA – Q38 – Recording Financial Transactions

Identifying the closing balance to be shown in the company’s statement of financial position from the income tax account.

You're reporting an error for "FA – May 2012 – L1 – SA – Q38 – Recording Financial Transactions"

FA – Nov 2023 – L1 – SB – Q1B – Roles of Accountants in Business and the Economy

Describe various types of accounting and their roles.

You're reporting an error for "FA – Nov 2023 – L1 – SB – Q1B – Roles of Accountants in Business and the Economy"

ATP – Feb 2016 – L2 – Q2 – Tax Accounting Principles

Explain tax provisions for cash-basis and accrual-basis accounting under Internal Revenue Act, 2000 (Act 592).

You're reporting an error for "ATP – Feb 2016 – L2 – Q2 – Tax Accounting Principles"

AT – Nov 2014 – L3 – SB – Q2b – Corporate Tax Compliance and Reporting

Explain why tax charges differ from applicable rates and why tax payments differ between cash flows and profit statements.

You're reporting an error for "AT – Nov 2014 – L3 – SB – Q2b – Corporate Tax Compliance and Reporting"

FA – May 2012 – L1 – SA – Q38 – Recording Financial Transactions

Identifying the closing balance to be shown in the company’s statement of financial position from the income tax account.

You're reporting an error for "FA – May 2012 – L1 – SA – Q38 – Recording Financial Transactions"

FA – Nov 2023 – L1 – SB – Q1B – Roles of Accountants in Business and the Economy

Describe various types of accounting and their roles.

You're reporting an error for "FA – Nov 2023 – L1 – SB – Q1B – Roles of Accountants in Business and the Economy"

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