A liability for deferred income taxes represents:

Question

Quizplus · Accepted Answer

A liability for deferred income taxes represents income taxes on earnings that have already been reported in the income statement, but that will be taxed in future periods. This is because the company may have used different tax accounting methods than those required by the IRS. As a result, the company may have deferred some of the tax liability to future periods, resulting in a liability for deferred income taxes on the balance sheet.

A Liability for Deferred Income Taxes Represents