On December 31, 2017, Xyz Inc

Question 27
Multiple Choice

On December 31, 2017, XYZ Inc. has an account payable of $2,000 for operating expenses incurred during the year. These expenses are only tax deductible when paid. XYZ normally pays for its operating expenses one month after they are incurred. Assuming a 20% tax rate, these expenses shall result in: A) a deferred tax liability of $2,000. B) a deferred tax liability of $400. C) a deferred tax asset of $400. D)a deferred tax asset of $2,000.