Asked by Saarthak Sharma on May 20, 2024
Verified
The allocation of the tax cost (benefit) across various components of book income within a given period is called
A) interperiod tax allocation.
B) intraperiod tax allocation.
C) current income tax allocation.
D) constructive receipt allocation.
Interperiod Tax Allocation
The process of distributing income tax expenses or benefits over different accounting periods to match taxes with the revenues they relate to.
Intraperiod Tax Allocation
The apportionment of income taxes within a financial reporting period to different components of net income and other comprehensive income.
- Learn about the mechanism of interperiod tax allocation and its repercussions on associating revenues with expenses.
Verified Answer
EK
Emily KimbroughMay 21, 2024
Final Answer :
B
Explanation :
The allocation of income tax expense (or benefit) across various components of book income within a given period is referred to as intraperiod tax allocation. This is done to properly match the tax expense with the related book income for the period. Interperiod tax allocation, on the other hand, involves the allocation of taxes across different accounting periods. Current income tax allocation and constructive receipt allocation are not relevant to the allocation of tax costs within a given period.
Learning Objectives
- Learn about the mechanism of interperiod tax allocation and its repercussions on associating revenues with expenses.