BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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TRADE ACCOUNTS PAYABLE
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DEFERRED TAX LIABILITY THAT IS EXPECTED TO REVERSE NEXT YEAR
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CURRENT PORTION OF A LONG TERM DEBT
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CASH DIVIDEND PAYABLE
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Detailed explanation-1: -Where are deferred tax liabilities listed on the balance sheet? They are listed on the balance sheet as “non-current liabilities.”
Detailed explanation-2: -Future income taxes are deferred income tax liabilities when taxable income decreases relative to financial income due to temporary differences and then increases when reversing temporary differences. A decrease followed by an increase means more taxes will be owed in the future.
Detailed explanation-3: -Tax liabilities are current liabilities. Current liabilities are short-term debts you must pay within a year. Generally, you incur short-term liabilities from normal business operations. Report tax liabilities with other current debts on your small business balance sheet.
Detailed explanation-4: -What is a Deferred Liability? A deferred liability is an obligation for which settlement is not required until a later period. If the deferral is for more than one year, then the liability is classified on an entity’s balance sheet as a long-term liability.