A Company's Income Statement Reported Net Income of $40,000 During

question 16

Multiple Choice

A company's income statement reported net income of $40,000 during 2019.The income tax return excluded a revenue item of $3,000 (reported on the income statement) because under the tax laws the $3,000 would not be reported for tax purposes until 2020.Which of the following statements is correct assuming a 21% tax rate?

• A)A $3,000 deferred tax liability is reported as of December 31,2019.
• B)A $3,000 deferred tax asset is reported as of December 31,2019.
• C)A $630 deferred tax liability is reported as of December 31,2019.
• D)A $630 deferred tax asset is reported as of December 31,2019.

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Definitions:

Evaluates

Evaluating involves systematically assessing something to determine its value, effectiveness, or significance based on specific criteria or standards.

Conduct

The manner in which a person behaves, especially in a particular place or situation.

Laissez-faire Leadership

A leadership style characterized by minimal direct supervision, where leaders provide tools and resources but allow employees to solve problems on their own.

Bureaucracy

An organizational structure characterized by standardized procedures, hierarchy of authority, and a clear division of labor, often resulting in an impersonal relationship between workers.