A deferred tax liability represents a potential future tax benefit associated with income reported in the current-year
GAAP financial statements.

Question

Quizplus · Accepted Answer

A deferred tax liability represents taxes that are accrued but not yet paid, typically arising from temporary differences between the accounting and tax treatments of income and expenses, indicating a future tax payment obligation, not a benefit.

A Deferred Tax Liability Represents a Potential Future Tax Benefit