Assume It Is the First Year of Operations

question 115

Multiple Choice

Assume it is the first year of operations. When taxable income exceeds pretax accounting income, accountants record a(n) :

• A)Deferred Tax Asset.
• B)Deferred Tax Liability.
• C)Income Tax Payable.
• D)Prepaid Income Taxes.

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Definitions:

Stagflation

A period of slow economic growth and high unemployment with rising prices.

Aggregate Supply

The total supply of goods and services that firms in an economy plan on selling during a specific time period, at given price levels.

Natural Rate

The long-term unemployment rate around which the labor market is in equilibrium, unaffected by short-term fluctuations.

Unemployment

The condition of being without a job while actively looking for employment and being willing to work.