If the income statement depreciation expense exceeds the tax return depreciation expense, then which of the following describes the situation:

1. Current year taxable income is lower than accounting income and the firm has a deferred tax asset
2. Current year taxable income is lower than accounting income and the firm has a deferred tax liability
3. Current year taxable income is higher than accounting income and the firm has a deferred tax liability
4. Current year taxable income is higher than accounting income and the firm has a deferred tax asset
5. Current year taxable income is equal to accounting income and the firm has a deferred tax liability

I know the answer is D, just asking if someone can please include an explanation for how you arrived at that answer