Deferred taxes may occur due to the use of
A)different tax schedules
B)different depreciation methods for taxes and financial reporting
C)long-term equipment
D)different cash flow methods

Question

Quizplus · Accepted Answer

Deferred taxes arise when there is a difference between the tax basis and financial reporting basis of assets and liabilities. One common reason for this difference is the use of different depreciation methods for tax and financial reporting purposes. Therefore, choice B is the best choice as it directly relates to the occurrence of deferred taxes. The other choices may not necessarily cause deferred taxes.

Deferred Taxes May Occur Due to the Use of