A deferred tax liability:
A)is only disclosed in the notes to the financial statements.
B)is recorded in a contra-liability account.
C)represents income tax amounts that are deferred to future years because of temporary differences between GAAP rules and IRS rules.
D)is never a current liability.

Question

Quizplus · Accepted Answer

A deferred tax liability represents income tax amounts that are deferred to future years because of temporary differences between GAAP rules and IRS rules. It is recorded on the balance sheet as a current or long-term liability. It is not disclosed only in notes to financial statements, is not recorded in a contra-liability account, and can be a current or long-term liability depending on its due date.

A Deferred Tax Liability