Deferred tax liabilities are shown as long term liabilities on the balance sheet of a business, and represent obligations to pay income tax at some point in the future arising from temporary timing differences.
A business has an estimated annual income tax expense of 14,000 due of profits for the accounting period. A demand for the amount has not yet been received from the tax authorities, and the expense has not been recorded in the accounting records. An accrued income tax adjusting entry is made in the accounting records.
Accrued salaries are salaries which has been incurred but not yet recorded in the accounting ledgers at the end of the accounting period.
This accrued salaries journal entry example shows how to record an accrued expense for salaries when an employee has carried out work during an accounting period but has not been paid by the end of the accounting period.
Withholding tax refers to process of deducting taxation from an a payment to a person, and paying this over to the government on their behalf. Governments use this method of withholding tax in order to minimize the risk of tax evasion and to reduce the costs of collection.
Accrued expenses are expenses which has been incurred but not yet recorded in the accounting ledgers at the end of the accounting period.
A business has an annual premises rent of 12,000 but an invoice has not been received from the landlord and the rental expense has not been recorded in the accounting records.