Answer: A company's current tax liability is the amount payable in taxes and is based on current taxable income

## Explanation Let's analyze each statement: **Statement A:** "Deferred tax assets occur when the tax base of an asset is lower than its carrying amount" - This is **incorrect**. Deferred tax assets actually occur when: - The tax base of an asset is **higher** than its carrying amount - Or when the tax base of a liability is **lower** than its carrying amount - Deferred tax assets represent future tax benefits that will reduce future tax payments. **Statement B:** "A company's current tax liability is the amount payable in taxes and is based on current taxable income" - This is **correct**. Current tax liability represents: - Taxes payable for the current period - Based on taxable income calculated according to tax laws - Reported on the balance sheet as a current liability **Statement C:** "Deferred tax liabilities occur when regulatory income tax expense is greater than accounting income tax expense" - This is **incorrect**. Deferred tax liabilities occur when: - The tax base of an asset is **lower** than its carrying amount - Or when the tax base of a liability is **higher** than its carrying amount - The statement confuses the relationship between regulatory and accounting income tax expense. **Key Concepts:** - **Current tax liability**: Taxes payable based on current period's taxable income - **Deferred tax assets**: Future tax benefits (tax base > carrying amount for assets, or tax base < carrying amount for liabilities) - **Deferred tax liabilities**: Future tax payments (tax base < carrying amount for assets, or tax base > carrying amount for liabilities) Statement B is the only completely accurate statement among the three options.

Author: LeetQuiz .