Which of the following statements concerning a company's income tax expense is correct?
A) Income tax expense is calculated as pre-tax accounting profit multiplied by the company tax rate.
B) Income tax expense often differs from the amount of tax paid to the ATO (Australian Taxation Office).
C) Income tax expense will only rarely differ from the amount of tax paid to the ATO.
D) Income tax expense will be the same as the amount of tax paid to the ATO.

Question

Quizplus · Accepted Answer

Income tax expense is calculated based on pre-tax accounting profit, but can differ from the amount of tax paid to the ATO due to differences in accounting rules and tax laws. Additionally, a company may have tax credits or carryforward losses that can impact the amount of tax paid.

Which of the Following Statements Concerning a Company's Income Tax