Which of the Following Results in a Deferred Tax Asset

question 78

Multiple Choice

Which of the following results in a deferred tax asset?

• A) Revenue or gains are recognized earlier for book purposes than for tax purposes.
• B) Operating loss or tax credit carryforwards exist.
• C) Tax basis of an asset is less than its book.
• D) Expenses are deductible earlier for tax purposes than for book purposes.

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Definitions:

Volume Variance

The difference between the budgeted and actual volume of production, affecting fixed costs per unit and overall profitability.

Budgeted Overhead Costs

Estimated costs related to the indirect costs of production or operations planned for a specific period.

Standard Hours Allowed

The number of hours that should have been worked for the actual level of output.

Overhead Costs Applied

Refers to indirect costs allocated to a cost object (like a project, product, or department) using a predetermined rate.