The Recognition of a Deferred Tax Liability That Results from the Use

question 23

Multiple Choice

The recognition of a deferred tax liability that results from the use of straight-line depreciation on financial statements and double-declining balance on tax returns will

• A)increase the current ratio.
• B)increase the debt/equity ratio.
• C)increase the quick ratio.
• D)decrease the debt/asset ratio.

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Definitions:

Significance Level

A threshold for determining whether a statistical result is considered statistically significant, usually denoted by alpha (α).

Statistical Inference

The process of drawing conclusions about population parameters based on data from a sample.

Descriptive Statistics

Statistical methods that summarize and describe the features of a collection of data, including measures of central tendency and variability.

Mean

The arithmetic average of a set of values or quantities, obtained by dividing the sum of all values by the number of values.