Question

The temporary difference will result in a deferred tax liability when, in the year that the difference originates, pretax financial income is____________

Answer 1

A deferred tax liability occurs when there is a temporary difference between book value and tax value of an asset or liability, and the pretax financial income is higher than the taxable income in the year the difference originates.

Step-by-step explanation:

The question is related to deferred taxes, which is a concept in accounting and finance. When a temporary difference occurs between the book value and tax value of an asset or liability, it creates a deferred tax liability. This liability arises when the pretax financial income of the year the difference originates is higher than the taxable income, resulting in a future tax payment.