0
Want this question answered?
Be notified when an answer is posted
Add your answer:
Earn +20 pts
Is provision for tax is a current liability?
Provision for taxation is current liablity
Why is corporation tax a current liability?
That is because most if not all country's tax collectors will want the tax within the next financial period. The definition between current and non current is the time when they fall due with current being within the year and non current after a year.
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
Is provision for tax is a current liability?
Provision for taxation is current liablity
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.
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.
Why is corporation tax a current liability?
That is because most if not all country's tax collectors will want the tax within the next financial period. The definition between current and non current is the time when they fall due with current being within the year and non current after a year.
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.
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.
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.
What does provision of income tax mean?
Estimation of the taxes for the current year
