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A company has a temporary difference due to doubtful accounts (i.e., bad debt expense). For fiscal year 2012, its Income Tax Payable was $10,000 less

A company has a temporary difference due to doubtful accounts (i.e., bad debt expense). For fiscal year 2012, its Income Tax Payable was $10,000 less than its Income Tax Expense.

What happened to deferred taxes in 2012?

Deferred Tax Liabilities decreased by $10,000

Deferred Tax Assets increased by $10,000

Deferred Tax Liabilities increased by $10,000

Deferred Tax Assets decreased by $10,000

There was no effect on Deferred Tax Assets or Deferred Tax Liabilities

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