Which of the Following Statements Best Describes the ASC 740

question 55

Multiple Choice

Which of the following statements best describes the ASC 740 process for evaluating a company's uncertain tax positions?

• A) ASC 740 requires a company to complete a two-step analysis every time it evaluates its uncertain tax positions.
• B) ASC 740 requires a company to complete step 2 (measurement) in its evaluation of its uncertain tax positions only if it is more-likely-than-not that that its tax position will be sustained on its merits (recognition).
• C) ASC 740 allows a company to take into account the probability of audit by a tax authority in step 1 (measurement) in its evaluation of its uncertain tax positions.
• D) ASC 740 allows a company to record a tax benefit from an uncertain tax position only if it is probable the benefit will be sustained on audit by a tax authority.

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Definitions:

Specific Functions

Distinct roles or activities that are characteristic of a particular process, organ, or system within a living organism.

Cell Division

Cell division is the process by which a parent cell divides into two or more daughter cells, essential for growth, repair, and reproduction in living organisms.

Photosynthesis

The process by which green plants, algae, and certain bacteria transform light energy into chemical energy, producing oxygen as a byproduct.

Leaves

The green, photosynthetic organs of plants and trees, primarily responsible for the absorption of light energy and carbon dioxide to produce oxygen and glucose through photosynthesis.