Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

CFA Events Calendar

View full calendar

Recommended Discussions

See how our partners can help you ace your CFA exams.

Question of the Week - Financial Reporting and Analysis

AdaptPrepAdaptPrep Des Moines, IA, USAPosts: 211 Sr Associate
edited February 2016 in Level 1 Questions

A bookstore earned $200,000 over the past year. At a tax rate of 40%, that bookstore incurs an income tax expense of $80,000. Under which of the following accounting systems would the expense typically be categorized as an operating activity?

PassedTense
Level I:  Adapt Exam Engine + Video Lessons + Study Manual
Level II: Adapt Exam Engine + Video Lessons
Level II: Coming 2016

Free Trial with mock exam!
www.passedtense.com

Question of the Week - Financial Reporting and Analysis 24 votes

IFRS only
16%
paulopitaedaindilMindaugasBlueJay3535 4 votes
U.S. GAAP only
16%
osaloisduyhg99sinivyOLUSEGUN 4 votes
IFRS and U.S. GAAP
66%
SarahAdaptPrepgoogs1484jasdevBeregondmdlynch3jtk08001pabulumsmrl38SwatihakziAlegriasanskriti14arow1967sandeepavannoord 16 votes

Comments

  • AdaptPrepAdaptPrep Des Moines, IA, USAPosts: 211 Sr Associate
    IFRS and U.S. GAAP

    Under both IFRS and U.S. GAAP, income tax expense on operating income is an operating expense. The difference between the two is when the income comes from a financing or an investing activity. In that case, the expense would still be an operating expense under U.S. GAAP but not under IFRS.

    PassedTense
    Level I:  Adapt Exam Engine + Video Lessons + Study Manual
    Level II: Adapt Exam Engine + Video Lessons
    Level II: Coming 2016

    Free Trial with mock exam!
    www.passedtense.com

Sign In or Register to comment.