单选题

In the current year, a company increased its deferred tax asset by $500,000. During the year, the company most likely:

A、 became entitled to a $500,000 tax refund.
B、 reported a lower accounting profit than taxable income.
C、 had permanent differences between accounting profit and taxable income.

【正确答案】 B

【答案解析】

B is correct. Deferred tax assets represent taxes that have been paid (because of the higher taxable income) but have not yet been recognized on the income statement (because of the lower accounting profit).