a future taxable amount will occur

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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11

On December 31, 2020, statement of financial position, Sowoozoo Corporation reports an
accrued receivable for financial reporting purposes but not for tax purposes. When this asset is
recovered in 2021, a future taxable amount will occur and *
O total income tax expense for 2021 will exceed current tax expense for 2021.
O Sowoozoo will record a decrease in a deferred tax liability in 2021.
O Sowoozoo will record an increase in a deferred tax asset in 2021.
O pretax financial income will exceed taxable income in 2021.
Transcribed Image Text:On December 31, 2020, statement of financial position, Sowoozoo Corporation reports an accrued receivable for financial reporting purposes but not for tax purposes. When this asset is recovered in 2021, a future taxable amount will occur and * O total income tax expense for 2021 will exceed current tax expense for 2021. O Sowoozoo will record a decrease in a deferred tax liability in 2021. O Sowoozoo will record an increase in a deferred tax asset in 2021. O pretax financial income will exceed taxable income in 2021.
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