Which statement is CORRECT regarding accounting for income taxes in a financial statement?

Question

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Accounting for income taxes must reflect the differences between financial statement and tax return reporting. The income tax provision includes not only the taxes paid for that reporting period but also the deferred taxes resulting from temporary differences between the financial statement and tax return reporting. This is based on the deferred tax model, which recognizes the future tax consequences of events that have been recognized on the financial statement but have not yet been recognized on the tax return. Therefore, items of income and expense may be treated differently for book and tax purposes, and the resulting deferred tax assets and liabilities must be reflected in the financial statement.

Which Statement Is CORRECT Regarding Accounting for Income Taxes in a Financial