Which of the Following Items Is Not Considered Evidence in Determining

question 46

Multiple Choice

Which of the following items is not considered evidence in determining if a valuation allowance is necessary?

• A) A cumulative book loss over some period of time.
• B) A net operating loss expired unused in the current year.
• C) Management projects future taxable income based on a backlog of signed contracts.
• D) Management can implement a tax strategy to create future taxable income, but it will be detrimental to the future profitability of the company.

---

Definitions:

Expert Systems

Artificial intelligence programs that use expert-level knowledge to solve problems in a specific domain, mimicking the decision-making ability of a human expert.

Automated Sensors

Devices that operate autonomously to collect data or detect specific conditions, often used in industrial and home applications.

Simulation

The attempt to duplicate the features, appearance, and characteristics of a real system, usually via a computerized model.

Failure Rate

The rate at which a designed system or part malfunctions, measured in failures over a specific time period.