Revenues from installment sales of property reported on financial statements in prior years and currently reported in the tax return create deferred tax assets.

Question

Quizplus · Accepted Answer

Revenues from installment sales of property reported on financial statements in prior years and currently reported in the tax return typically create deferred tax liabilities, not assets, because the revenue is recognized earlier for financial reporting purposes than for tax purposes, leading to a temporary difference that will result in future taxable amounts.

Revenues from Installment Sales of Property Reported on Financial Statements