What Is The Entry For Deferred Tax Liability According To As22?
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Explanation: According to AS 22 accounting standard if accounting income is greater than taxable income then it will result in Deferred tax liability. Deferred tax liability commonly arises when in depreciating fixed assets, recognizing revenues and valuing inventories.
The book entries of deferred tax liability is very simple. We have to create Deferred tax liability account by debiting or crediting Profit and loss account respectively. The deferred tax is created as at normal tax rate.
Profit and loss account Dr
To Deferred tax liability acccount Cr
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