Which of the Following Types of Evidence Indicate That a Valuation

question 110

Multiple Choice

Which of the following types of evidence indicate that a valuation allowance is needed to reduce the deferred tax asset?

• A) history of profits
• B) excess of appreciated asset values over basis
• C) existing contracts or sales backlogs, which will generate significant future income
• D) short carryback or carryover periods

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Definitions:

Total Assets

The sum of all assets owned by a company, including cash, inventory, property, and equipment.

Dividend Payout

The portion of net income paid to shareholders as dividends, usually expressed as a percentage.

Full Capacity

The maximum level of output that a business can sustain over a period of time, utilizing all available resources efficiently.

Financial Planning

The process of constructing a financial strategy or plan to meet an individual's or organization's long-term financial goals.