📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!

    ⚡ Month End Offer- Few Hours Left Flat 55% Off On All Courses!! Coode - OCT55 Enroll Now ⚡
    00:00:00 AM Left

    Question

    A company claims depreciation of ₹15 lakhs as per tax

    laws but only ₹10 lakhs as per books. How should this temporary difference be treated?
    A Create Deferred Tax Asset Correct Answer Incorrect Answer
    B Create Deferred Tax Liability Correct Answer Incorrect Answer
    C No deferred tax recognition Correct Answer Incorrect Answer
    D Adjust against reserves Correct Answer Incorrect Answer
    E Show in OCI only Correct Answer Incorrect Answer

    Solution

    Higher tax depreciation → taxable income lower now → higher tax in future → results in Deferred Tax Liability (DTL).

    Practice Next
    More Accounts Questions
    ask-question