ACCA FA · Chapter 12 · Question 3 of 10
A company's income tax liability was $23,000 at the start of the year and $27,000 at the end. The income tax charge in profit or loss for the year was $31,000. How much tax was paid during the year?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) $27,000
Explanation
Tax paid = opening liability + charge for the year - closing liability = $23,000 + $31,000 - $27,000 = $27,000. Deducting the opening liability and adding the closing one gives $35,000, and the charge itself ($31,000) ignores the movement in the liability.
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