In Determining Whether to Adjust a Deferred Tax Asset, a Company

question 36

Multiple Choice

In determining whether to adjust a deferred tax asset, a company should

• A)consider all positive and negative information in determining the need for an adjustment.
• B)consider only the positive information in determining the need for an adjustment.
• C)take an aggressive approach in its tax planning.
• D)pass a recognition threshold, after assuming that it will be audited by taxing authorities.

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Definitions:

Pressure

The force exerted per unit area by gases, liquids, or solids on the walls of their container or on objects in contact with them.

Confining Pressure

The pressure applied equally in all directions at any given point within the earth’s crust, often affecting rock properties.

Compression

is the application of force that presses matter together, reducing its volume or causing deformation.

Tension

A force that pulls materials apart, causing stress or strain in geological contexts, such as the stretching of the Earth's crust.