Hat is the Defferd tax

Question

Accepted Answer

Deferred tax is a temporary difference between the accounting profit and taxable profit, resulting in future tax liabilities or assets.

Deferred tax arises due to differences in the recognition of revenue and expenses for tax and accounting purposes.
It can be a deferred tax asset if taxes paid in advance exceed taxes owed, or a deferred tax liability if taxes owed exceed taxes paid.
Deferred tax is recognized on the balance sheet and impacts the company's financial statements.
Example: If a company recognizes revenue for tax purposes before accounting purposes, it will have a deferred tax liability.
Example: If a company has tax losses that can be carried forward to offset future profits, it will have a deferred tax asset.

Popular interview questions of Accounts Officer