Practice Session 1 2012 Income Tax Quiz

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Name: _____________________________ SID: ______________

THE UNIVERSITY OF NEW SOUTH WALES SCHOOL OF ACCOUNTING ACCT 5942: CORPORATE ACCOUNTING & REGULATION INCOME TAX QUIZ, SESSION 1 2012

Time allowed: Number of Questions:
       

Thirty minutes (no reading time) 15

INSTRUCTIONS 1. Before starting the examination complete your personal details requested on the Answer Sheet and on this Examination Booklet. 2. You must record all your answers to the multiple-choice on the computerized Answer Sheet during the thirty minute quiz time. Students will not be given credit for responses recorded on the Examination Booklet. 3. The exam is comprised of 15 multiple choice questions. Each question is of equal mark and there is no negative marking. Choose the one best answer to each question. 4. At the end of the examination your Answer Sheet and this Examination Booklet will be collected by the examiners and you are to remain seated until you are permitted to leave the room.

Question 1  Taxable income is: a. Net profit before tax b. Net cash c. Assessable incomes less deductions allowed d. Net profit before tax adjusted for the following: (1) revenues that are not assessable in the period; and (2) expenses that are not deductible in the period e. Both C and D are correct Question 2  A deductible temporary difference is expected to lead to the payment of: a. more tax in the future and gives rise to a deferred tax asset b. less tax in the future and gives rise to a deferred tax asset c. more tax in the future and gives rise to a deferred tax liability d. less tax in the future and gives rise to a deferred tax liability. e. less tax in the current year and more tax in the future.   Question 3  Under AASB rates that: a. b. c. d. e.  

112 Incomes Taxes, deferred tax assets and liabilities are measured at the tax applied at the beginning of the reporting period at the end of the reporting period at the rates that prevail at the reporting date are expected to apply when the asset or liability is settled. None of the above (i.e., all are incorrect)

Question 4  Which of the following is true: Calculation of deferred tax asset Calculation of deferred tax liability Deductible temporary differences multiplied by the tax rate Assessable temporary differences multiplied by the tax rate. Deductible temporary differences multiplied by the tax rate Assessable temporary differences multiplied by the tax rate. Deductible temporary differences divided by the tax rate 1

a.

Assessable temporary differences multiplied by the tax rate. Deductible temporary differences multiplied by the tax rate Deductible temporary differences multiplied by the tax rate Assessable temporary differences multiplied by the tax rate. Assessable temporary differences divided by the tax rate.

b.

c.

d.

e.

Question 5  A reduction in the statutory tax rate would most likely benefit the company’s: a. Statement of Comprehensive Income and Statement of Financial Position b. Statement of Comprehensive Income but not the Statement of Financial Position c. Statement of Financial Position but not the Statement of Comprehensive Income d. Cash Flow Statement but not the Statement of Comprehensive Income e. Cash Flow Statement but not the Statement of Financial Position     Question 6  When preparing the statement of taxable income or current tax worksheet net profit before tax is adjusted as follows: Item Adjustment

A B C D E

Impairment loss on goodwill Fines expense Research costs 125% deduction Dividends paid Revaluation increment on land

Add back Deduct Add back additional 25% Add back Deduct

Question 7  The following information was extracted from the financial records of Pamakari Limited: Equipment purchased on 1 July 20X2 for $100 000 (accounting depreciation 10% straight line / tax depreciation 20% straight line). If the company tax rate is 30%, the deferred tax item that will be recorded by Pamakari Limited at 30 June 20X3 is: a....
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