In addition to recognizing income tax expense, the accounting necessary to record income taxes requires
A)a credit to income tax payable based on net income times the tax rate.
B)a debit to the income tax expense account for the amount of cash that must be paid for taxes.
C)computations of the amounts to record in the deferred income tax account.
D)all companies to report taxable income on the income statement

Question

Quizplus · Accepted Answer

In addition to recognizing income tax expense, the accounting for income taxes requires computations of the amounts to record in the deferred income tax account, which reflects temporary differences between accounting and tax rules. Option A is incorrect because it only represents a part of the accounting for income taxes. Option B is incorrect because it does not reflect the necessary computations for deferred taxes. Option D is incorrect because companies are required to report taxable income for tax purposes, but not necessarily on the income statement.

In Addition to Recognizing Income Tax Expense, the Accounting Necessary