A future tax asset indicates that the company
A) had some expenses that were deductible for taxes but are prepaid for accounting purposes.
B) expects to pay higher taxes in the future
C) paid their taxes for the current year in advance.
D) expects a benefit in the form of lower taxes in the future.

Question

Quizplus · Accepted Answer

A future tax asset arises when a company expects to reduce its future tax liabilities, often due to overpaid taxes or tax losses that can be carried forward to offset future taxable income.

A Future Tax Asset Indicates That the Company