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:

Lignin

Material that strengthens cell walls of vascular plants.

Stomata

Small openings on the surfaces of plant leaves and stems that facilitate gas exchange.

Vascular Tissue

Specialized tissue in plants that is responsible for the transport of water and nutrients throughout the plant body.

Ground Tissue

Plant tissue that makes up the bulk of the plant body, involved in photosynthesis, storage, and support, excluding the vascular and dermal tissues.