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    Multiple choice

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    A temporary difference arises when a revenue item is reported for tax purposes in a period

    After it is reported Before it is reported
    in financial income in financial income

    a. Yes Yes
    b. Yes No
    c. No Yes
    d. No No

    3. A deferred tax liability is classified on the balance sheet as either a current or a noncurrent liability. The current amount of a deferred tax liability should generally be
    a The net deferred tax consequences of temporary differences that will result in net taxable amounts during the next year
    b Totally eliminated from the financial statements if the amount is related to a noncurrent asset.
    c Based on the classification of the related asset or liability for financial reporting purposes.
    d The total of all deferred tax consequences that are not expected to reverse in the operating period or one year, whichever is greater

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    Solution Summary

    The solution explains two multiple choice questions relating to temporary timing difference and deferred tax liability