Question

which of the following are true when there are multiple temporary differences (select all that apply)? multiple select question. the net of the future taxable and deductible amounts is multiplied by the future tax rate to determine the net deferred tax liabilities or assets. the total of the future deductible amounts is multiplied by the future tax rate to determine the balance of deferred tax assets. the total of the future taxable amounts is multiplied by the future tax rate to determine the balance of deferred tax liabilities.

Answer 1

In accounting for multiple temporary differences, the net of future taxable and deductible amounts is multiplied by the future tax rate to determine deferred tax liabilities or assets, with separate calculations for deferred tax assets and liabilities.

Step-by-step explanation:

When dealing with multiple temporary differences in accounting, several calculations are needed to determine the deferred tax liabilities or assets on a company's balance sheet. The net of the future taxable and deductible amounts is indeed multiplied by the future tax rate to determine the net deferred tax liabilities or assets. Furthermore, the total of the future deductible amounts is multiplied by the future tax rate to calculate the balance of deferred tax assets. Similarly, the total of the future taxable amounts is multiplied by the future tax rate to determine the balance of deferred tax liabilities.

These calculations reflect the timing differences between the recognition of revenue and expenses for accounting purposes and the recognition of taxable income for tax purposes. By adjusting for these differences, a company can provide a clearer financial picture regarding its future tax obligations or benefits.