If a Company's Deferred Tax Asset Is Not Reduced by a Valuation

question 151

Multiple Choice

If a company's deferred tax asset is not reduced by a valuation allowance, the company believes it is:

• A) Probable that sufficient taxable income will be generated in future years to realize the full tax benefit.
• B) Probable that sufficient financial income will be generated in future years to realize the full tax benefit.
• C) More likely than not that sufficient taxable income will be generated in future years to realize the full tax benefit.
• D) More likely than not that sufficient financial income will be generated in future years to realize the full tax benefit.

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Definitions:

External Stimulus

An external stimulus is any factor, signal, or condition outside of an organism that can elicit a physiological or psychological response from it.

Controlling Emotion

The process of managing one's feelings to appropriately respond to various situations and to achieve emotional well-being.

Cognitive Attributional

Refers to the process of explaining the causes of behavior and events, focusing on the role of thought processes in such attributions.

Physiological Arousal

Refers to the physical responses of the body to stimuli, including increased heartbeat, sweating, or adrenaline release.