Question

A deferred tax liability represents the: a) increase in taxes payable in future years as a result of taxable temporary differences. b) increase in taxes saved in future years as a result of deductible temporary differences. c) decrease in taxes payable in future years as a result of taxable temporary differences. d) decrease in taxes saved in future years as a result of deductible temporary differences.

Answer 1

Answer: Option (A)

Step-by-step explanation:

Deferred tax liability is referred to as or known as the tax which is due or assessed for current period but still has not been paid. This deferral tends to come from difference in the timing in between when tax is accrued also , when this tax is paid. Deferred tax liability states and save fact the organization will, in future, tend to pay more of the income tax due to the transaction which took place in current period.