Omega Limited has shown a provision for employee benefits balance of $6,000 under current liabilities in their balance sheet. The tax rate is 30%. The deferred tax item to be recognised by Omega Limited is: Select one: a. Deferred tax liability of $6,00

Omega Limited has shown a provision for employee benefits balance of $6,000 under current liabilities in their balance sheet. The tax rate is 30%. The deferred tax item to be recognised by Omega Limited is: Select one: a. Deferred tax liability of $6,00

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter18: Accounting For Income Taxes

Section: Chapter Questions

Problem 11RE: Barth James Inc. has the following deferred tax assets and liabilities: 12,000 noncurrent deferred...

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Question

Select one:

a. Deferred tax liability of $6,000.

b. Deferred tax asset of $1,800.

c. Deferred tax liability of $1,800.

d. Deferred tax asset of $6,000.

Definition Definition Estimated future tax made while preparing accounts. Deferred tax is estimated based on past and present transactions from financial statements. It is not the actual tax that needs to be paid or is refundable from the revenue authority; it is an accounting entry. It is necessary to account for deferred tax due to difference between accounting profits and taxable profits.

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