Which of the Following Statements Best Describes the ASC 740

question 115

Multiple Choice

Which of the following statements best describes the ASC 740 process for evaluating a company's uncertain tax positions?

• A)ASC 740 requires a company to complete a two-step analysis every time it evaluates its uncertain tax positions.
• B)ASC 740 requires a company to complete Step 2 (measurement)in its evaluation of its uncertain tax positions only if it is more likely than not that its tax position will be sustained on its merits (recognition).
• C)ASC 740 allows a company to take into account the probability of audit by a tax authority in Step 1 (measurement)in its evaluation of its uncertain tax positions.
• D)ASC 740 allows a company to record a tax benefit from an uncertain tax position only if it is probable the benefit will be sustained on audit by a tax authority.

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Definitions:

Serotonin

A neurotransmitter in the brain involved in the regulation of mood, appetite, and sleep, with a role in depression and anxiety disorders.

Norepinephrine

A neurotransmitter and hormone involved in the body's fight or flight response, regulating heart rate, blood pressure, and blood sugar levels.

Psychodynamic Theory

A psychological framework focusing on unconscious processes and childhood experiences affecting current behavior and feelings.

Unconscious Processes

Mental processes not directly accessible to consciousness but that influence judgments, feelings, or behavior.