Which of the Following Statements Best Describes the ASC 740

question 77

Multiple Choice

Which of the following statements best describes the ASC 740 rules related to the disclosure of the components of deferred tax assets and liabilities in the company's income tax note?

• A) A privately-held company should disclose the approximate "tax effect" (dollar amounts) of only those components of its deferred tax assets and liabilities that give rise to a "significant" portion of net deferred tax liabilities and deferred tax assets in a footnote to the financial statements.
• B) A publicly traded company should disclose the approximate "tax effect" (dollar amounts) of only those components of its deferred tax assets and liabilities that give rise to a "significant" portion of net deferred tax liabilities and deferred tax assets in a footnote to the financial statements.
• C) A publicly traded company should disclose the approximate "tax effect" (dollar amounts) of all of the components of its deferred tax assets and liabilities in a footnote to the financial statements.
• D) A privately-held company should disclose the approximate "tax effect" (dollar amounts) of all of the components of its deferred tax assets and liabilities in a footnote to the financial statements.

Prepare and analyze a manufacturing overhead budget, understanding both variable and fixed components.

Compute budgeted cash disbursements for manufacturing overhead based on direct labor-hours and overhead rates.

Understand and apply the concept of budgeting in merchandising and manufacturing firms.

Calculate budgeted sales, cash collections, and cash disbursements.

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Definitions:

Depreciated

A reduction in the value of an asset over time, often due to wear and tear or obsolescence, which is accounted for in financial statements.