Stockton Corporation Has Made an Accounting Entry to Record Deferred

question 34

Multiple Choice

Stockton Corporation has made an accounting entry to record deferred taxes as a liability resulting from temporary differences between accounting income and taxable income.Which of the following statements is true?

• A)Deferred tax will be decreased.
• B)Stockholders' equity will be increased.
• C)Stockholders' equity will be decreased.
• D)Assets will be decreased.

---

Definitions:

Perpetual Inventory System

An accounting system that continuously records the quantities and values of inventory on hand and sold, updating records in real-time.

Discount

A reduction from the usual cost of something, often provided to incentivize purchases or payments.

Merchandise Purchased

Goods acquired for resale by a company during an accounting period, intended to be sold to customers in the ordinary course of business.

Perpetual Inventory System

A perpetual inventory system continuously updates inventory records, including purchases and sales, ensuring real-time tracking of inventory levels.