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Chapter 6 Tax Terms
Karten in diesem Stapel (21)
- 1Accrual method of accountingan overall method of accounting under which revenues are realized in the year the earnings process is complete and expenses are matched against revenues in the year the liability for the expense is incurred
- 2all-events testthe test for determining if an accrued expense is deductible. The test is satisfied if the liability on which the accrued expense is based is fixed, the amount of the liability is determinable with reasonable accuracy, and economic performance with respect to the liability has occurred.
- 3allowance methodthe GAAP method for computing bad debt expense. The expense is based on the estimated losses from current year receivables
- 4annualized incomethe taxable income reported on a short-period return mathematically inflated to reflect 12 months of business operations
- 5cash method of accountingan overall method of accounting under which revenue is accounted for when payment is received and expenses are accounted for when payment is made
- 6constructive receiptthe point at which a taxpayer has unrestricted access to and control of income, even is the income item is not in the taxpayer's actual possession
- 7deferred tax assetthe excess of tax expense per books over tax payable resulting from a temporary difference between book income and taxable income
- 8deferred tax liabilitythe excess of tax expense per books over tax payable resulting from a temporary difference between book income and taxable income
- 9direct write-off methodthe method for determining a bad debt deduction required by tax law. Only receivables that are written off as noncollectable during the year are deductible.
- 10domestic production activities deductiona tax preference deduction for US manufacturers equal to a percentage of net income from a qualified domestic production activity
- 11economic performancethe third requirement of the all-events test
- 12gross incomerealized increases in wealth from whatever source derived. In the business context, gross profit from sales of goods, performance of services, and investments of capital
- 13hybrid method of accountingan overall method of accounting that combines the accrual method for purchases and sales of inventory and the cash method for all other transactions
- 14net operating loss (NOL)an excess of allowable deductions over gross income
- 15personal service corporationClosely held corporation owned by individuals who perform services in the fields of health, law, engineering, architecture, accounting, actuarial science, performing arts, or consulting for the corporation's clientele. Personal service corporations are subject to a flat 35% tax rate.
- 16realizationincome is taken into account when the earnings process with respect to the income is complete and an event or transaction occurs that provides an objective measurement of the income
- 17recognitioninclusion of an item of income or deduction in the computation of taxable income
- 18recurring item exceptionAn exception to the economic performance requirement under which a liability is considered incurred in a taxable year in which it meets the first two requirements of the all-events test and economic performance occurs within 8.5 months after year-end
- 19short-period returna tax return for a taxable year consisting of less than 12 months
- 20tax benefit rulethe recovery of an amount deducted in an earlier year must be included in the gross income in the year of recovery
- 21taxable incomegross income minus allowable deductions for the taxable year
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- Beschreibung
- Terms for chapter six of ACT330 at CSU
- Erstellt von
- Stephany Fox · Dez 2015
- Aktualisiert
- 21 Okt 2016
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- 45
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