Interperiod tax allocation is the process of spreading the income tax expense across periods benefited.

Question

Quizplus · Accepted Answer

This statement is correct. Interperiod tax allocation is a method used by companies to distribute the tax expense among periods in which the taxable income is earned. The objective of this approach is to ensure that the tax expense is allocated to the appropriate accounting periods, so that the financial statements reflect the accurate amount of tax liability.

Interperiod Tax Allocation Is the Process of Spreading the Income