Under the asset-liability method,deferred taxes should be presented on the balance sheet
A)As one net debit or credit amount
B)In two amounts: one for the net current amount and one for the net non-current amount
C)In two amounts: one for the net debit amount and one for the net credit amount
D)As reductions of the related asset or liability accounts

Question

Quizplus · Accepted Answer

Deferred taxes should be presented on the balance sheet in two amounts: one for the net current amount and one for the net non-current amount. This is because deferred taxes can arise from temporary differences that will reverse in the current accounting period (current deferred taxes) or in future periods (non-current deferred taxes). Separate presentation of these two amounts provides more meaningful information to stakeholders.

Under the Asset-Liability Method,deferred Taxes Should Be Presented on the Balance