Assuming a 40% statutory tax rate applies to all years involved, which of the following situations will give rise to reporting a deferred tax liability on the balance sheet?

 

                  I.    A revenue is deferred for financial reporting purposes but not for tax purposes.

 

                  II.    A revenue is deferred for tax purposes but not for financial reporting purposes.

 

                III.    An expense is deferred for financial reporting purposes but not for tax purposes.

 

                IV.    An expense is deferred for tax purposes but not for financial reporting purposes.

 

a.  item II only

 

b.  items I and II only

 

c.  items II and III only

 

d.  items I and IV only

Answer rating: 100% (QA)

The detailed answer for the above question is provided below The correct answer is b items I and II only Deferred tax liabilities arise when there are ... View the full answer