Which of the Following Statements Regarding Tax-Effect Accounting Is Incorrect

question 7

Multiple Choice

Which of the following statements regarding tax-effect accounting is incorrect?

• A) The tax-effect method of accounting for income tax determines that temporary differences may arise, resulting in the recognition of either a liability or an asset.
• B) The tax-effect method for calculating income tax expense is where the taxable income is multiplied by the tax rate.
• C) A tax loss can only be carried forward as a future tax benefit if it is probable that the entity will earn taxable income in the future.
• D) A deferred tax liability will occur where taxable income is less than accounting profit in the current period.

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Definitions:

Telephone Order

An instruction for medication or treatment made via telephone by a licensed healthcare provider, often subject to policies ensuring verification and documentation.

Incisional Pain

Pain that occurs at the site of a surgical incision due to tissue damage and the healing process itself.

VO (Verbal Order)

A directive given orally by a healthcare provider to a member of the care team, often needing documentation and later confirmation in writing.

TO (Telephone Order)

An instruction or prescription given by a healthcare professional over the phone to another healthcare provider.