Which of the Following Statements Concerning the Classification of Deferred

question 32

Multiple Choice

Which of the following statements concerning the classification of deferred tax assets and liabilities is true?

• A)A deferred tax asset is classified as noncurrent only if the company expects the future tax benefit to be received more than 12 months from the balance sheet date.
• B)All deferred tax assets and liabilities are treated as noncurrent.
• C)A deferred tax asset related to a bad debt reserve is classified as current if the related accounts receivable is classified as a current asset.
• D)A deferred tax asset related to inventory capitalization is classified as noncurrent only if the company uses a FIFO accounting method and the inventory to which the deferred tax asset relates will not be treated as sold within 12 months from the balance sheet date.

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Definitions:

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A situation where the level of danger or chance of failure is considered excessively high, potentially leading to undesired outcomes.

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