
Taxable Income
The amount of adjusted gross income which is liable to be taxed is known as taxable income
Deferred tax is an amount i.e. computed on the basis of tax liability on the income as per income statement and the income as per tax return, that difference is known as deferred tax. Deferred tax amount is deferred to the next financial year.
Deferred tax liability
When the Income Tax Expense account is less than the Income Tax Payable account, this difference is known as Deferred Tax Liability.
Temporary Difference
Temporary difference refers to the difference of one income recognized by the tax rules and accounting rules of a company in different periods. Consequently the difference between the amount of assets and liabilities reported in the financial reports and the amount of assets and liabilities as per the company’s tax records, is known as temporary difference.
To determine: The effect of change and prepare the appropriate

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Chapter 16 Solutions
INTERMEDIATE ACCOUNTING
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