Which of the following statements is correct with respect to the…

  

Which of the following statements is correct with respect to the…  Which of the following statements is correct with respect to the use of fair value accounting for liabilities under IFRS? Fair value accounting under IFRS is only permitted if the liabilities are actively managed on a fair value basis as part of the company’s documented risk management or investment strategy.U.S. GAAP is more restrictive than IFRS regarding the use of fair value accounting for liabilities.The fair value option is permitted under IFRS only under two specific sets of circumstances.Both IFRS and U.S. GAAP require changes in credit quality to be recorded in operating income. Which of the following is not an accurate statement regarding the retirement of debt? When debt is retired before the maturity date, a gain occurs if the market rate of interest increased subsequent to the issue of the bond.When debt is retired before the maturity date, a loss occurs if the market rate of interest increased subsequent to the issue of the bond.The gain or loss on the extinguishment of debt is categorized on the income statement as part of continuing operations.When debt is retired on the maturity date, the book value is always equal to the market value. Which of the statements is not true when applying both IFRS and U.S. GAAP accounting for long-term debt? Changes in interest rates after the issue date do not alter the carrying value unless fair value accounting is used.The balance sheet carrying value is amortized cost determined using the effective interest rate at the issue date.Fixed-rate bonds are recorded at the amount of the net proceeds.Periodic interest expense is computed using the contractual interest rate. Smith Company reported $350,000 in book income before income tax during 20X1, its first year of operation. The tax depreciation exceeded its book depreciation by $30,000. The tax rate for 20X1 and all future years was 21%. Income tax expense reported in the income statement for the year ending December 31, 20X1 would be: $79,800.$73,500.$67,200.$52,500. 5.)Which of the following would not produce a temporary difference? A revenue item that causes book income to be more (less) than taxable income when it is initially recorded.A revenue included in the determination of book income this year but never included in taxable income.An expense included in the determination of taxable income this year but not included in book income until next year.A revenue included in the determination of book income this year but not included in taxable income until next year. 6.)Which of the following is not a correct statement? While financial reporting choices may differ among firms, all firms will select tax policies that minimize the present value of their tax payments.Companies can artificially inflate earnings by using undisclosed estimate changes (e.g., warranty expense).Materiality guidelines for reporting changes in deferred tax assets and liabilities are specified in GAAP.Increases in deferred tax liability balances may indicate deteriorating earnings quality. 7.)During its first year of operations a company recorded accrued expenses totaling $375,000 for book purposes. For tax purposes, $175,000 of the expenses are deductible during the first year of operations and $200,000 are deductible during the second year of operations. The enacted income tax rate was 21% during the first year of operations and 25% during the second year of operations. The balance sheet at the end of the first year of operations will report a deferred tax: asset of $50,000.liability of $50,000.liability of $42,000.asset of $42,000. 8.)Smith Company reported $350,000 in book income before income tax during 20X1, its first year of operation. The tax depreciation exceeded its book depreciation by $30,000. The tax rate for 20X1 and all future years was 21%. If Smith paid no estimated taxes, what amount of income tax payable should Smith report in its December 31, 20X1, balance sheet? $79,800$73,500$67,200$52,500               Business Accounting ACCT 3321 Share (0)