alleryStart learning →If an asset's tax base is lower than its book value, the company recognises a:
ADeferred tax asset
BPermanent difference
CCurrent tax asset
DDeferred tax liability
Answer & Solution
Correct answer: D. Deferred tax liability
A lower tax base means more tax depreciation has been claimed already, leaving tax payable in future.
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The financial statements recognise the tax effect of which transactions?Section 43B allows certain expenses such as taxes, duty, cess and fees on which basis?A difference in depreciation method, such as SLM against WDV, between books and tax is a:Payments to non-residents disallowed under section 40(a)(i) until tax is deducted give a:Income spread over several years in the accounts but fully taxed on receipt creates a:Income credited to the profit and loss statement but taxed only in later years creates a:A bad debts provision is expensed in books but tax relief comes only when it is utilised. Deferred tax liabilities generally arise when tax relief is given: