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

Question

Quizplus · Accepted Answer

A future tax asset indicates that a company expects a benefit in the form of lower taxes in the future. This can be due to the company having carried forward tax losses or tax credits that can be applied to reduce their future tax liability.

A Future Tax Asset Indicates That the Company