Question

On a balance sheet, deferred taxes are classified as: 2) A) a current asset. B) a fixed asset. C) stockholders' equity. D) a long-term liability. E) a current liability

Answer 1

The correct option is Option C - as a long term liability.

Explanation:

In the preparation of Balance sheet of an organization, the deferred taxes are classified and shown as a long-term liability. When an amount is not recognized in the statement of income, but the particular amount has been paid, then it is shown as Deferred Tax asset. The deferred tax can either be DTA or it can also be DTL.

Thus, from the given options, the correct option is D option which states as long-term liability.