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Question 1 of 10
1. Question
When does a deferred tax liability arise?
I. In recognizing revenues
II. In depreciating fixed assets
III. In increasing holiday taxes
IV. In valuing inventoriesCorrect
A deferred tax liability arises in recognizing revenues, depreciating fixed assets, and valuing inventories. These are the temporary imbalances between the income and the tax base. This appears between the difference of a taxable income and the pretax financial income of an entity as computed in its financial statements.
Incorrect
A deferred tax liability arises in recognizing revenues, depreciating fixed assets, and valuing inventories. These are the temporary imbalances between the income and the tax base. This appears between the difference of a taxable income and the pretax financial income of an entity as computed in its financial statements.
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Question 2 of 10
2. Question
Which of the following best describes a deferred tax asset?
Correct
An overpayment and advance payment of taxes would result in a deferred tax asset. It is simply the opposite of deferred tax liability. Deferred tax liabilities refer to the taxes owed by an entity, while the deferred tax assets refer to taxes already paid but an excess from the taxes due.
Incorrect
An overpayment and advance payment of taxes would result in a deferred tax asset. It is simply the opposite of deferred tax liability. Deferred tax liabilities refer to the taxes owed by an entity, while the deferred tax assets refer to taxes already paid but an excess from the taxes due.
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Question 3 of 10
3. Question
When does a deferred tax asset arise?
I. If the taxable income is less than the accounting income.
II. If the accounting income is less than the taxable income.
III. If future deductible amounts arise.
IV. If future taxable amounts arise.Correct
If an accounting income is less then the taxable income, it automatically creates a deferred tax asset. If the future deductible amounts arise rather than a taxable amount, it is also a deferred tax asset. All future deductible amounts came to form a deferred tax asset while all future taxable amounts would result in a deferred tax liability.
Incorrect
If an accounting income is less then the taxable income, it automatically creates a deferred tax asset. If the future deductible amounts arise rather than a taxable amount, it is also a deferred tax asset. All future deductible amounts came to form a deferred tax asset while all future taxable amounts would result in a deferred tax liability.
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Question 4 of 10
4. Question
How do a deferred tax asset and deferred tax liability be identified by just looking at the accounting and taxable income?
Correct
The difference of an accounting income and a taxable income would make either a permanent or temporary differences. By knowing the permanent and temporary differences, a deferred tax asset or deferred tax liability would be formed. A taxable income is computed based on the company’s tax rate that appears on a balance sheet.
Incorrect
The difference of an accounting income and a taxable income would make either a permanent or temporary differences. By knowing the permanent and temporary differences, a deferred tax asset or deferred tax liability would be formed. A taxable income is computed based on the company’s tax rate that appears on a balance sheet.
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Question 5 of 10
5. Question
Who may be treated as a customer of a broker-dealer in identifying which statements shall be furnished?
I. A person whom the broker-dealer affected a transaction in a particular month
II. A person whom the broker-dealer holds securities for safekeeping
III. A person whom the broker-dealer carries a free credit balance in a particular month
IV. A person whom the broker-dealer seeks advise in carrying securities or collateralCorrect
A customer of a broker-dealer takes effect on a broker-dealer’s transaction in a particular month. It is the person whom the broker-dealer holds the securities or collateral for safekeeping. It is also the person whom the broker-dealer carries a free credit balance in any particular month prescribed. In furnishing the statements, the particular month shall be disclosed for the proper organization of customer statements.
Incorrect
A customer of a broker-dealer takes effect on a broker-dealer’s transaction in a particular month. It is the person whom the broker-dealer holds the securities or collateral for safekeeping. It is also the person whom the broker-dealer carries a free credit balance in any particular month prescribed. In furnishing the statements, the particular month shall be disclosed for the proper organization of customer statements.
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Question 6 of 10
6. Question
In furnishing the statements of a customer, what month shall be recorded if the balance sheet reporting date ended on September 15, 2020?
Correct
If the reporting period of a balance sheet ended on September 15, 2020, the month to be reported for customer statements shall be on October 15, 2020. Since September 15 is not on a month-end, the day or month to be considered must be thirty (30) days after the balance sheet date. It is a fixed month-period if ever the balance sheet ended on another day rather than a month-end.
Incorrect
If the reporting period of a balance sheet ended on September 15, 2020, the month to be reported for customer statements shall be on October 15, 2020. Since September 15 is not on a month-end, the day or month to be considered must be thirty (30) days after the balance sheet date. It is a fixed month-period if ever the balance sheet ended on another day rather than a month-end.
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Question 7 of 10
7. Question
In furnishing statements of a customer, when must the statements be sent if a balance sheet ended on a month-end?
I. The exact month of the balance sheet date
II. Any month following the balance sheet date in which the statements are mailed
III. 30 days preceding the date in which the statements are mailed.
IV. Any month following the balance sheet date in which the statements are not mailedCorrect
A broker-dealer may choose either the month of the balance sheet date or any month after the balance sheet date in which the statements are mailed in furnishing the statements of the customers. It must follow any time-period prescribed in SEA Rule 17a-5. It is not required to have an agreement with a customer on when the furnished statements are sent to them.
Incorrect
A broker-dealer may choose either the month of the balance sheet date or any month after the balance sheet date in which the statements are mailed in furnishing the statements of the customers. It must follow any time-period prescribed in SEA Rule 17a-5. It is not required to have an agreement with a customer on when the furnished statements are sent to them.
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Question 8 of 10
8. Question
Which of the following statements are incorrect regarding the classification of a customer?
Correct
A customer includes any person whom their securities or collaterals are held by the broker-dealer for safekeeping. This excludes the general, special or limited partner, or director or officer of a broker or dealer. A person who also has a claim on property or funds which is part of the capital of the broker or dealer is not considered to be a customer. The classification of a customer in furnishing customer statements is stated under the SEA Rule 17a-5.
Incorrect
A customer includes any person whom their securities or collaterals are held by the broker-dealer for safekeeping. This excludes the general, special or limited partner, or director or officer of a broker or dealer. A person who also has a claim on property or funds which is part of the capital of the broker or dealer is not considered to be a customer. The classification of a customer in furnishing customer statements is stated under the SEA Rule 17a-5.
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Question 9 of 10
9. Question
What are the kinds of accounting periods in reporting the financial statements?
I. Lunar year
II. Calendar year
III. Fiscal year
IV. Going-concern periodCorrect
The two kinds of periods in accounting in reporting the financial statements are calendar year and fiscal year. A calendar year is an accounting period that starts on the 1st of January and ends on the 31st of December. A fiscal year is an accounting period which may start on any 1st day of the month other than January. Some entity who chooses the fiscal year period is those who started their operation in the middle of the year.
Incorrect
The two kinds of periods in accounting in reporting the financial statements are calendar year and fiscal year. A calendar year is an accounting period that starts on the 1st of January and ends on the 31st of December. A fiscal year is an accounting period which may start on any 1st day of the month other than January. Some entity who chooses the fiscal year period is those who started their operation in the middle of the year.
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Question 10 of 10
10. Question
Which of the following are examples of a fiscal year?
I. For the period of February 1 to January 31 of the following year
II. For the period of October 1 to September 30 of the following year
III. For the period of August 31 to August 31 of the following year
IV. For the period of June 1 to June 1 of the following yearCorrect
For the period of February 1 to January 31 of the following year and the period of October 1 to September 30 of the following year may be considered as a fiscal year. A fiscal period has exactly 12 months starting from any month other than January. It may also be 52 weeks ended on Saturday closest to January 31. It is not always as exact as 365 days. It may be counted as 52 weeks multiplied by 7 days which results in 364 days only.
Incorrect
For the period of February 1 to January 31 of the following year and the period of October 1 to September 30 of the following year may be considered as a fiscal year. A fiscal period has exactly 12 months starting from any month other than January. It may also be 52 weeks ended on Saturday closest to January 31. It is not always as exact as 365 days. It may be counted as 52 weeks multiplied by 7 days which results in 364 days only.