TRUE-FALSE-Conceptual 1. Taxable income is a tax accounting term and is also referred to as income before taxes. 2. Pretax financial income is the amount used to compute income taxes payable. 3. Deferred tax expense is the increase in the deferred tax liability balance from the beginning to the end of the accounting period. 4. A deferred tax liability represents the increase in taxes payable in future years as a result of taxable temporary differences existing at the end of the current year. 5. Deductible amounts cause taxable income to be greater than pretax financial income in the future as a result of existing temporary differences. A deferred tax asset represents the increase in taxes refundable in future years as a result of deductible temporary differences existing at the end of the current year. 6. A company reduces a deferred tax asset by a valuation allowance if it is probable that it will not realize some portion of the deferred tax asset. 7. Companies should consider both positive and negative evidence to determine whether it needs to record a valuation allowance to reduce a deferred tax asset. 8. A company should add a decrease in a deferred tax tiability to income taxes payable in computing income tax expense. 9. 10. Taxable temporary differences will result in taxable amounts in future years when the related assets are recovered