CFA Practice Question

CFA Practice Question

Which of the following is correct?
A. The Effective tax rate is Income tax expense divided by Pretax Income.
B. Income tax expense is the actual tax paid to the government within the accounting period.
C. Income Tax Paid does not include refunds or payments for prior years.
Explanation: Income Tax Paid is the actual taxes paid out during a period and includes all income taxes paid during this accounting period (for this period and other periods). Income tax expense includes tax payable and deferred income tax expenses, and is not the actual tax paid to the government during an accounting period.

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