What are provisions for income taxes concerned with?

Provisions for income taxes are primarily concerned with income taxes on profit earned by a company during a specific accounting period. This involves estimating the amount of tax liability based on the taxable income derived from the financial performance of the business. When a company prepares its financial statements, it must recognize a tax expense that reflects the income earned, and this provision accounts for current taxes owed as well as deferred tax liabilities or assets that might arise due to timing differences between accounting and tax rules.

The other choices relate to different aspects of financial accounting. Gross income generated refers to the total revenue before any deductions. Net revenue after expenses pertains to the profit left after subtracting total expenses from total revenue. The cost of goods sold specifically relates to the direct costs attributable to the production of the goods sold by a company. While these elements are important in the overall determination of profit, they do not directly address the provisioning for income taxes which is focused on the resulting tax obligations from the profits earned.