When a Change in the Tax Rate Is Enacted into Law

question 31

Multiple Choice

When a change in the tax rate is enacted into law, its effect on existing deferred income tax accounts should be

• A) handled retroactively in accordance with the guidance related to changes in accounting principles.
• B) considered, but it should only be recorded in the accounts if it reduces a deferred tax liability or increases a deferred tax asset.
• C) reported as an adjustment to income tax expense in the period of change.
• D) applied to all temporary or permanent differences that arise prior to the date of the enactment of the tax rate change, but not subsequent to the date of the change.

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Definitions:

Nervous System

The complex network of nerve cells and fibers that transmits nerve impulses between parts of the body, facilitating all bodily functions and responses.

Immune System

The body's defense network designed to guard against infections and other pathogens through a complex system of cells, tissues, and organs.

Mental Health

A state of well-being in which an individual realizes his or her own abilities, can cope with the normal stress of life, can work productively, and is able to make a contribution to his or her community.

Sexual Arousal

A physical and emotional state characterized by increased genital sensitivity and desire for sexual activity.