When Tax Rates Are Changed Subsequent to the Creation of a Deferred

question 156

Multiple Choice

When tax rates are changed subsequent to the creation of a deferred tax asset or liability, GAAP requires that:

• A) All deferred tax accounts be adjusted to reflect the new tax rates.
• B) The beginning deferred tax accounts are left unchanged.
• C) Only the current deferred tax accounts are adjusted to reflect the new tax rates.
• D) Only the noncurrent deferred tax accounts are adjusted to reflect the new tax rates.

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Definitions:

Shifted

Refers to the transformation of a graph or equation that results in its movement to a different position on the coordinate plane, without altering its shape.

Coordinates

A set of values that show an exact position. On graphs, it usually refers to a pair of numbers that define a point in two-dimensional space.

Units

Standard quantities used to specify measurements.

Quadrants

The four regions of a Cartesian plane divided by the x-axis and y-axis.