CFA Practice Question
The tax return liability resulting from current period taxable income is the definition of the ______.
A. tax loss carryforward.
B. taxes payable.
C. deferred tax liability.
Explanation: Taxes payable, which is also called current tax expense or benefit, is the current tax expense.
User Contributed Comments 5
| User | Comment |
|---|---|
| danlan | Is tax payable the current tax expense? I chose C. |
| wollogo | 'Tax expense' is the tax expense in the income statement. 'tax payable' is the amount you pay on the tax return. 'Tax payable liability' can also be a current liability because the cash payment of income taxes is due but not yet paid. This is just like any other accounts payable with the IRD being the creditor. |
| malawyer | good one! |
| dlukas | Boy did I read into that question too much. |
| takor | I think the key words here are 'current period'. The other options are all tied to periods either past or in the future. |