The tax liability would be greater than tax expense whenever revenues are recognized for tax purposes in a different period than for published reporting purposes.

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Quizplus · Accepted Answer

Tax liability is determined based on taxable income and the tax rates applicable in the jurisdiction for the period in which the income is recognized for tax purposes. Tax expense, on the other hand, is the company's estimate of its tax liability for the year as reported in its financial statements, and it is calculated based on the accounting standards (such as GAAP or IFRS) that the company follows. The difference between tax liability and tax expense can arise due to temporary differences between the accounting and tax treatments of certain items, but the statement that tax liability would be greater than tax expense whenever revenues are recognized for tax purposes in a different period than for published reporting purposes is not inherently true. The relationship between tax liability and tax expense depends on the nature of the temporary differences and whether they result in deferred tax assets or liabilities.

The Tax Liability Would Be Greater Than Tax Expense Whenever