A Valuation Allowance Is Recorded Against a Deferred Tax Asset

question 85

Multiple Choice

A valuation allowance is recorded against a deferred tax asset when:

• A)It is probable that the deferred tax asset will not be realized in the future.
• B)It is more likely than not that the deferred tax asset will not be realized in the future.
• C)It is highly likely the deferred tax asset will not be realized in the future.
• D)It is only remotely possible that the deferred tax asset will not be realized in the future.

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Definitions:

Verbal Communication

The exchange of information or ideas through spoken words.

Nonverbal Communication

The transfer of information through non-linguistic signs, such as facial expressions, gestures, and body language, as opposed to verbal communication.

Low Context

Communication style in which messages are explicit and specific, not relying heavily on the context or non-verbal cues to convey meaning.

Statutory Law

Legally enacted; deriving authority from law.