💰 CPA Exam Prep

A deferred tax liability arises when:

A Too much tax is paid
B Taxable income is temporarily less than pretax financial income, creating future tax obligations
C There is a permanent difference
D Tax rates decrease

✓ Correct Answer: Option B

DTL: temporary differences where tax deductions now exceed book deductions (e.g., accelerated depreciation), creating taxes payable later.

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