Differentiate a Deferred Tax Asset from a Deferred Tax Liability

question 20

Essay

Differentiate a deferred tax asset from a deferred tax liability.

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Definitions:

Trial Balance

A bookkeeping report that lists the balances in each of an organization's general ledger accounts, used to verify that total debits equal total credits in the accounting ledgers.

Ledger Accounts

Individual financial accounts within the general ledger that record all transactions affecting that account, providing detailed financial information.

Dividends

Payments made by a corporation to its shareholder members, usually as a distribution of profits.

Income Statement

A financial statement that shows a company's revenues, expenses, and profits or losses over a specific period of time.