When income tax expense differs from income taxes currently payable on taxable income companies recognize deferred tax
Question:
When income tax expense differs from income taxes currently payable on taxable income companies recognize deferred tax assets and deferred tax liabilities. Which of the following statements is true? (Select one or more)
a. Deferred tax liabilities arise when book income exceeds taxable income. An example would be interest on the municipal bond investment.
b. Deferred tax assets arise when taxable income exceeds book income. An example would be estimated warranty expense.
c. Deferred tax liabilities arise when book income exceeds taxable income. An example would be recognized more depreciation expense for tax purposes than for book purposes.
d. Deferred tax liabilities arise when book income exceeds taxable income. An example would be accounts receivable using the direct charge-off method for uncollectible accounts for tax purposes exceeds accounts receivable (net) using the allowance method for financial reporting.
Income Tax Fundamentals 2015
ISBN: 9781305177772
33rd Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven Gill