Question

I’m tax terms an owners deferred salary becomes

Answer 1

The correct answer is that the owners deferred salary becomes a liability.

The reason that it becomes a liability is because it is a debt that needs to be paid out in the accounting period that it was deferred to. A deferred salary is treated similarly to your accounts payable.

Answer 2

Answer:

Option B, A liability

Explanation:

A deferred salary is a part of the income that was not used earlier due to heavy tax imposition. This salary is taxable when it is used after a certain period of time (usually retirement) to save the taxes.

Such income/revenues comes under the category of deferred-long term liability as tax will be applicable on them in future.

Hence, option B is correct.