When income tax expense for a period is greater than income tax payable the difference will be reported how and on which financial statement?

Question

Quizplus · Accepted Answer

When income tax expense for a period is greater than income tax payable, it means that the company has recognized a deferred tax liability, which represents taxes that will need to be paid in future periods. The deferred tax liability should be included on the balance sheet as a long-term liability. The Statement of Cash Flows and the Deferred Tax Asset are not appropriate choices in this scenario.

When Income Tax Expense for a Period Is Greater Than