Which of the Following Statements Is True

question 83

Multiple Choice

Which of the following statements is true?

• A)ASC 740 focuses on the income tax expense or benefit on the income statement.
• B)ASC 740 focuses on the balances in the deferred tax assets and liabilities on the balance sheet.
• C)ASC 740 focuses on the income taxes paid or refunded in the statement of cash flows.
• D)ASC 740 focuses on the computation of a company's effective tax rate in the income tax note to the financial statements.

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Definitions:

Goodwill

An intangible asset that arises when a business is acquired for more than the fair value of its identifiable net assets, reflecting aspects like brand reputation, customer relations, and patents.

Business Combination

A merger or acquisition in which an acquirer purchases the assets or shares of another business.

Future Cash Flows

Future cash flows refer to the projected flows of cash into and out of a company or project, vital for assessing its financial health and potential for growth or sustainability.

Value In Use

The present value of the future cash flows expected to be derived from an asset or cash-generating unit.