Which of the following is true about intra-period tax allocation?
A) It arises because certain revenue and expense items appear in the income statement either before or after they are included in the tax return.
B) It is required to report the cumulative effect of accounting changes but not for discontinued operations.
C) Its purpose is to allocate income tax expense evenly over a number of accounting periods.
D) Its purpose is to relate the income tax expense to the items which affect the amount of tax.

Question

Quizplus · Accepted Answer

Intra-period tax allocation is used to relate income tax expense to the items that affect the amount of tax. This is done by allocating income tax expense to the relevant revenue and expense items in the income statement. It is not aimed at allocating income tax expense evenly over a number of accounting periods or for reporting the cumulative effect of accounting changes (as required under other accounting standards).

Which of the Following Is True About Intra-Period Tax Allocation