Deferred Income Tax arises Question 6 1 pts Deferred Income Tax arises O when taxable income...

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Question 6 1 pts Deferred Income Tax arises O when taxable income under IRS rules is higher than taxable income under GAAP. O Deferred Income Tax arises

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Answer 1

Answer #1

Deferred Income Taxes arises when taxable income under IRS rules is lower than taxable income under GAAP

Deferred Income Taxes arises due to temporary differences in taxable and financial income.

Temporary differences include reasons such as higher depreciation under IRS rules, installment sales, advance collection.

The difference in taxable and financial income is multiplied by Tax rate to calculate Deferred Income Taxes.

Option B is correct

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Answer 2

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