Chapter 19, Problem 11Q

To determine

Deferred tax asset: The deferred tax asset is the excess, overpaid, or paid in advance expenses. This may increase or decrease according to the prevailing business conditions. If the deferred tax asset decreases, taxable income increases and vice versa.

Deferred tax liability: The deferred tax liability is the excess, over received, or received in advance income. This may increase or decrease according to the prevailing business conditions. If the deferred tax asset decreases, taxable income decreases and vice versa.

To decide on: The treatment of the deferred tax assets and deferred tax liabilities in the balance sheet.