A corporation's effective tax rate as computed in its income tax note is the company's cash tax rate for the year.

Question

Quizplus · Accepted Answer

The effective tax rate as computed in the income tax note may not necessarily be the company's cash tax rate for the year because it takes into account deferred tax expenses and benefits, which reflect the timing differences between when taxes are recognized for financial reporting purposes and when taxes are paid. Therefore, the effective tax rate may be higher or lower than the company's cash tax rate for the year.

A Corporation's Effective Tax Rate as Computed in Its Income