C is corrent. If a temporary difference results in future taxable amounts, a deferred tax liability must be recorded in the current year because a past event has resulted in a present obligation which will require a probable future sacrifice (the payment of taxes in 5 years). Note that a temporary difference which will result in net deductible amounts in future years would prompt the recording of a deferred tax asset.
A is incorrect. If a temporary difference results in future taxable amounts, a deferred tax liability must be recorded in the current year because a past event has resulted in a present obligation which will require a probable future sacrifice (the payment of taxes in 5 years). Note that a temporary difference which will result in net deductible amounts in future years would prompt the recording of a deferred tax asset.
A is incorrect. If a temporary difference results in future taxable amounts, a deferred tax liability must be recorded in the current year because a past event has resulted in a present obligation which will require a probable future sacrifice (the payment of taxes in 5 years). Note that a temporary difference which will result in net deductible amounts in future years would prompt the recording of a deferred tax asset.
D is incorrect. If a temporary difference results in future taxable amounts, a deferred tax liability must be recorded in the current year because a past event has resulted in a present obligation which will require a probable future sacrifice (the payment of taxes in 5 years). Note that a temporary difference which will result in net deductible amounts in future years would prompt the recording of a deferred tax asset.
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