A Future Tax Asset Indicates That the Company

question 76

Multiple Choice

A future tax asset indicates that the company

• A) had some expenses that were deductible for taxes but are prepaid for accounting purposes.
• B) expects to pay higher taxes in the future
• C) paid their taxes for the current year in advance.
• D) expects a benefit in the form of lower taxes in the future.

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Definitions:

Noncontrolling Interest

An ownership position in which a shareholder owns less than 50% of a company's stock and therefore has no control over decisions.

Consolidated Statement

A financial statement that presents the assets, liabilities, and operating results of a parent company and its subsidiaries as one single entity.

Cash Flows

The total amount of money being transferred into and out of a business, providing insights into its operational efficiency and financial health.

Consolidated Net Income

The total amount of net income earned by a parent company and its subsidiaries, presented as a single figure after eliminating inter-company transactions.