The result of interperiod income tax allocation is that

Question

Quizplus · Accepted Answer

Interperiod income tax allocation results in recognizing deferred tax assets or liabilities in the balance sheet. Tax expense on the income statement for the year is equal to the sum of the current year's income tax payable or refundable and the change in the deferred tax asset or liability balances for the year. Therefore, option D is the correct choice. Option A is not correct because interperiod income tax allocation cannot eliminate all fluctuations in tax liability payments. Option B is not correct because deferred taxes on the balance sheet may not always match the tax expense on the income statement due to timing differences. Option C is not correct because it only describes how to compute the tax liability on the balance sheet, but it does not answer the question about the result of interperiod income tax allocation.

The Result of Interperiod Income Tax Allocation Is That