DEFERRED TAX LIABILITIES Definition

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DEFERRED TAX LIABILITIES have an effect of increasing future years income tax payments, which indicates that they are accrued income taxes and meet definition of liabilities. Whereas deferred tax assets have an effect of decreasing future income tax payments, which indicates that they are prepaid income taxes and meet definition of assets.

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ORIGINAL ISSUE DISCOUNT is when a long-term debt instrument is issued at a price that is lower than its stated redemption value; the difference is called Original Issue Discount (OID).

CONVERSION COSTS is Direct Labor + Manufacturing Overhead.

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