Answered: A current year temporary book-lax…

A current year temporary book-lax difference is unfavorable if it causes taxable income to decrease relative to book income. True or False True False

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter3: Taxes On The Financial Statements

Section: Chapter Questions

Problem 8P

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Concept explainers

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.

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A current year temporary book-lax difference is unfavorable if it causes taxable income to decrease relative to book income. True or False True False

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