Which of the Following Types of Evidence Indicate That a Valuation

question 26

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

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Definitions:

Marginal Cost

The swell in total charges associated with crafting an additional unit of a good or service.

Average Variable Cost

The total variable cost divided by the quantity of output produced, representing the variable cost for each unit of output.

Meals

Prepared food items or servings eaten or intended to be eaten at any particular time, such as breakfast, lunch, or dinner.

Marginal Cost

The increment in total financial output required for producing one more unit of a product or service.