If a Corporation Prepares an Adjusting Entry to Credit the Deferred

question 17

Multiple Choice

If a corporation prepares an adjusting entry to credit the deferred tax asset account, this should represent

• A) additional future income taxes payable.
• B) a transfer to the deferred tax liability account.
• C) the reversal of a deferred tax benefit that originated in a prior year.
• D) the reversal of a deferred tax expense that originated in a prior year.

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Definitions:

Flexibility

The ability of a company or system to adapt to changes or new requirements.

Accounting Information

Financial data and records about an organization's transactions, used for reporting, analysis, and decision-making purposes.

Consistency

In accounting, the principle that requires the same accounting methods to be used from period to period for comparability.

Accounting Principles

The rules and guidelines that companies must follow when reporting financial data.