Deferred tax

This topic has 1 reply, 2 voices, and was last updated 5 years ago by Stephen Widberg.

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April 9, 2021 at 3:55 am #616503
Noah098
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sir what is the tax base of a prepaid expenses, assuming tax base is calculated on a cash paid basis. and can you also state the accompanying reason.
April 9, 2021 at 9:53 am #616555
Stephen Widberg
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Prepaid rent 100.

Already allowed for tax.

TD = 100

DT liability (x tax rate)

Think of your T account – if the T account would have a Dr balance, the DT will be a liability (and vice versa)

Again we are not normally asked to explain DT in any detail.
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