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Malarky Limited Accrued €30 000 for Employees' Long Service Leave

Question 15

Multiple Choice

Malarky Limited accrued €30 000 for employees' long service leave in the year ended 30 June 2016. This item will not be tax deductible until it is paid in approximately 10 years' time. If the company tax rate is 30%, Malarky Limited must record the following tax effect adjustment at the reporting date:


A) debit Deferred tax asset €9000;
B) debit Deferred tax liability €9000;
C) credit Deferred tax asset €9000;
D) credit Deferred tax liability €9000.

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