333 Deferred Taxes
Liabilities
Long Term
Synopsis
Account 333 is established to record reserves for taxes, which are due beyond the next 12 month period.
Debits |
Credits |
|
|
Example 1
Record the year-end audit adjustment for the deferred taxes due of $5,500 to the difference in book and tax depreciation methods. (Note – the books had already been closed for the year)
Journal: General Journal
Entry: |
|
Debit |
Credit |
Account 370 |
Retained Earnings |
$5,500 |
|
Account 333 |
Deferred Taxes |
|
$5,500 |
Comments
Deferred Taxes is established to present the estimated actual taxes to be paid in future years.
Note:
Professional tax and accounting advice should be obtained regarding Differed Taxes.