Deferred tax accounting adjustments are recorded at what point in time? a. At the end of each month b. At balance date c. As each transaction arises or is incurred d. As the cash flows from each transaction oc

Deferred tax accounting adjustments are recorded at what point in time? a. At the end of each month b. At balance date c. As each transaction arises or is incurred d. As the cash flows from each transaction oc

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 2EA: Consider the following accounts and determine if the account is a current liability, a noncurrent...

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Question

Deferred tax accounting adjustments are recorded at what point in time?

At the end of each month

At balance date

As each transaction arises or is incurred

As the cash flows from each transaction occur

Definition Definition Estimated future tax made while preparing accounts. Deferred tax is estimated based on past and present transactions from financial statements. It is not the actual tax that needs to be paid or is refundable from the revenue authority; it is an accounting entry. It is necessary to account for deferred tax due to difference between accounting profits and taxable profits.

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