Which of the Following Is Not an Argument That an Advocate

question 41

Multiple Choice

Which of the following is not an argument that an advocate of nonallocation of deferred taxes might use to support his/her position?

• A) Income taxes result only from taxable income.
• B) Income taxes are an expense of doing business and should be treated the same as other expenses of doing business under accrual accounting.
• C) Income taxes are not levied on individual items of income or expense.
• D) The current provision for income taxes is a better predictor of future cash flows than is income tax expense that includes deferred taxes.

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Definitions:

Loan

A sum of money borrowed that is expected to be paid back with interest.

Compounded Annually

Interest on an investment is calculated once a year and added to the principle, increasing the amount the interest is calculated on the following year.

Scholarships

Financial aid awards given to students to support their education, typically based on academic achievement, talent, or other criteria.

Compounded Quarterly

The calculation of interest on both the initial principal and accumulated interest over three-month intervals.