A company has a temporary difference due to doubtful accounts (i.e., bad debt expense). For fiscal year 2012, its Income Tax Payable was $10,000 less than its Income Tax Expense. What happened to deferred taxes in 2012? Deferred Tax Liabilities increased by $10,000 Deferred Tax Liabilities decreased by $10,000 Deferred Tax Assets increased by $10,000 Deferred Tax Assets decreased by $10,000 There was no effect on Deferred Tax Assets or Deferred Tax Liabilities Why the answer "Deferred Tax Liabilities increased by $10,000" is wrong? What's the difference between "increase deferred tax liability" and "decrease deferred tax asset" or "increase deferred tax asset" and "decrease deferred tax liability"
A company has a temporary difference due to doubtful accounts (i.e., bad debt expense). For fiscal year 2012, its Income Tax Payable was $10,000 less than its Income Tax Expense. What happened to deferred taxes in 2012? Deferred Tax Liabilities increased by $10,000 Deferred Tax Liabilities decreased by $10,000 Deferred Tax Assets increased by $10,000 Deferred Tax Assets decreased by $10,000 There was no effect on Deferred Tax Assets or Deferred Tax Liabilities Why the answer "Deferred Tax Liabilities increased by $10,000" is wrong? What's the difference between "increase deferred tax liability" and "decrease deferred tax asset" or "increase deferred tax asset" and "decrease deferred tax liability"
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
A company has a temporary difference due to doubtful accounts (i.e., bad debt expense). For fiscal year 2012, its Income Tax Payable was $10,000 less than its Income Tax Expense.
What happened to
Deferred Tax Liabilities decreased by $10,000
Deferred Tax Assets decreased by $10,000
There was no effect on Deferred Tax Assets or Deferred Tax Liabilities
Why the answer "Deferred Tax Liabilities increased by $10,000" is wrong?
What's the difference between "increase deferred tax liability" and "decrease deferred tax asset" or "increase deferred tax asset" and "decrease deferred tax liability"
Thanks a lot.
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