0
Provision for taxation is current liablity
Wiki User
∙ 11y ago
Add your answer:
Earn +20 pts
Is provision for depreciation is current liability?
NO, it is not a liability it is a con-tra account
Is deffered tax liability your current liability?
yes
Is estimated tax payable a current liability?
Yes, as tax is paid normally in next fiscal year so it is current liability and shown under current liability section
Entry for Provision for Income Taxes?
You will need two accounts: Income tax expenses (an expense account, obviously) Provision for income tax (a liability account) You will simply: debit provision for income tax credit income tax expenses When actually paying income tax, you will: debit cash credit provision for income tax
What if income tax provision is higher than deferred income tax?
You may not understand what your asking, in provision and "tax" are 2 different things. Provision is a purely accounting (GAAP) term. it has nothing to do with IRS tax really. It isn't even part of IRS vernacular really. An Income Tax Provision basically has 2 components; Deferred Tax Provision & Current Tax Provision. (Some ancillary accounting lines may have to do with credits and tax effect of state tax deduction for example). The total income tax provision is the combination of the 2. If current tax provision is higher than deferred tax provision, than the deferred tax provision is a tax benefit. A very common thing that happens when tax accounting requires a provision be recorded for income recorded for GAAP before it is income for tax.
Formula for current liability?
Current Liability = sundry creditor+bank overdraft+ expenses payable+provision for tax,divident
Why we treat provison for tax as current liability?
With the process of provision we create the amount and set aside to payment for taxes in future as it is payable in short term future that's why it is called current liability.
Is provision for depreciation is current liability?
NO, it is not a liability it is a con-tra account
How is deferred tax liability different from current tax liability?
Current Tax Liability is that tax amount which is actaully payable in current year.Deffered Tax liability is that amount of tax liability which is created due to difference in net income in income statement and income according to tax authorities.
Is deffered tax liability your current liability?
yes
Is estimated tax payable a current liability?
Yes, as tax is paid normally in next fiscal year so it is current liability and shown under current liability section
Entry for Provision for Income Taxes?
You will need two accounts: Income tax expenses (an expense account, obviously) Provision for income tax (a liability account) You will simply: debit provision for income tax credit income tax expenses When actually paying income tax, you will: debit cash credit provision for income tax
What if income tax provision is higher than deferred income tax?
You may not understand what your asking, in provision and "tax" are 2 different things. Provision is a purely accounting (GAAP) term. it has nothing to do with IRS tax really. It isn't even part of IRS vernacular really. An Income Tax Provision basically has 2 components; Deferred Tax Provision & Current Tax Provision. (Some ancillary accounting lines may have to do with credits and tax effect of state tax deduction for example). The total income tax provision is the combination of the 2. If current tax provision is higher than deferred tax provision, than the deferred tax provision is a tax benefit. A very common thing that happens when tax accounting requires a provision be recorded for income recorded for GAAP before it is income for tax.
What is provision for taxation?
The amount which is kept by the company to pay taxes against its profits is known as provision for taxation. Provision for taxation considered as current liability.
Is income tax a current liability or an expense?
Accrued income tax (Income Tax Payable) is a current liability. When the tax is actually paid it is reported on the income statement as Income Tax Expense.
Is provision for doubtful debt a current liability?
Provision for doubtful debt is current asset which is created as a reduction in accounts receivable balance and which is adjusted at actual bad debt.
Why tax is liability?
If tax is still remains payable while close of books of accounts then it is a liability to be paid to tax authorities that's why shown under liability side of balance sheet as current liability.
