Assume it is the first year of operations. When taxable income exceeds pretax accounting income, accountants record a(n):
A)Deferred Tax Asset.
B)Deferred Tax Liability.
C)Income Tax Payable.
D)Prepaid Income Taxes.

Question

Quizplus · Accepted Answer

When taxable income exceeds pretax accounting income, accountants record a deferred tax asset because the company has paid more taxes than it owes.

Assume It Is the First Year of Operations