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Why is it important to understand that the amount cash paid for taxes is different than the amount of income tax expense?

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Answer: To know the amount of tax the business should pay from reported profit which is different from it's actual tax bill

Step-by-step explanation:

Income tax expense could be described as what is calculated that the company owes in taxes according to accounting rules. They are reported on the income statement.

While Income tax payable is described as the actual amount the company owes in taxes based on the rules of tax code. They appear on the balance sheet of the company accounting documents until the bills are cleared off or paid.

The reason for understanding the difference is to know the amount of tax the business should pay from reported profit which is different from it's actual tax bill

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