Which method reflects the tax effect in the period that tax is payable?

Question

Quizplus · Accepted Answer

The taxes payable method reflects the tax effect in the period that tax is actually payable, meaning when the tax liability is recognized and paid. This method is used to calculate the tax expense and reflects the actual cash outflow for taxes. The accrual method records tax expense when it is incurred, which may not align with when the taxes are actually paid. The deferral method delays recognition of tax expense until a future period. The tax allocation method is not a recognized accounting method for tax purposes.

Which Method Reflects the Tax Effect in the Period That